3000 reasons to move to Christchurch?

Insights Newsletter
9 May, 2014

Earlier this week, the Ministry of Social Development announced a new policy to support the Canterbury rebuild and reduce unemployment. The policy, dubbed ‘3k to Christchurch’ is a one-off incentive of $3,000 to beneficiaries outside of Christchurch to relocate and work in the city.
But an incentive by any other name does not smell as sweet.
If the purpose is to assist in relocation costs, then such a scheme already exists. Work and Income currently offer a ‘transition to work’ grant, so why not simply extend the monetary limit for those relocating to Christchurch? The difference in name is more than mere semantics.  
A transition-to-work grant sends the message that the government is assisting beneficiaries in gaining meaningful employment.
But incentives, by their very nature, are offered in cases where the recipient would be less willing to perform the task otherwise.
An ‘incentive’ sends the message that the government must motivate and reward beneficiaries to work, rather than that beneficiaries on a job-seeking benefit have an obligation to gain employment.
On the other hand, if the intention is to encourage beneficiaries to move where the jobs are, why not offer incentives to move out of areas of high unemployment? A more apt policy could be ‘3k out of areas where job prospects are few and far between’. But then why is the government paying people in the first place, to do what is in their best interests?
And why focus on beneficiaries outside of Christchurch? If the objective is lowering unemployment, it makes more sense to ensure all beneficiaries in Canterbury who are fit and able to work are fulfilling their job-seeking obligations. This is far less expensive than shipping people across the country, and putting more pressure on the already strained housing and infrastructure.
The reason why Christchurch has been targeted is because of the high degree of un-met labour demand in the area. Perhaps it is more accurate to call the policy a subsidy to cover the employer’s recruitment costs.
But there are already a number of businesses in Christchurch who offer competitive remuneration and assist with relocation costs to attract applicants from all over New Zealand. This is not a novel concept.
The Australian mining sector welcomes labour from across the country and overseas, even though the jobs are far from attractive, not being located in thriving metropolises. Why? Because employers in the sector have offered their own incentives. And few would say the mining sector has suffered financially because of this.
It seems that the government is trying to kill two birds with one stone – unemployment and labour shortages – by throwing money at the problem and hoping for the best, rather than focussing on careful targeting and clear objectives. 

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