Economist warns costs of 'mean-spirited' benefit changes will outweigh the gains
Economist Shamubeel Eaqub has criticized a new New Zealand policy that removes unemployment benefits for 18-19-year-olds with high-earning parents. He argues the policy is 'mean-spirited' and will lead to long-term negative social and economic outcomes.
Why it matters
The debate highlights the tension between government efforts to reduce welfare dependency and concerns regarding the long-term social costs of austerity measures.
An economist is warning a welfare change that would see thousands of youth lose access to unemployment benefits, would bring significant long-term impacts.
From November 2026, the government will end Jobseeker payments to 18-19-year-olds whose parents earn more than $67,225, after the bill passed into law under urgency on Friday.
In October last year, it was estimated that about 4300 young people would become ineligible for support as a result.
Economist Shamubeel Eaqub told Midday Report the costs far outweigh the benefits and any savings would be a transfer from the poor to the crown.
"We know that these are young people who are currently really struggling. So to even qualify for benefit, there are huge amounts of threshold."
He said the benefit system already had "significant hurdles" and the policy was "mean-spirited".
Eaqub explained while there may be benefits in the short term, there were negative long-term consequences.
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