Reaction to the Budget

The benefit increases announced in Budget 2021 are welcome as much- needed practical support that will make a difference in many of New Zealand’s most vulnerable households, said the Wellington Archdiocese Ecology, Justice and Peace (EJD) Commission.

But the changes also have a symbolic importance beyond their monetary value. “Thirty years ago, benefits were slashed in Ruth Richardson’s 1991 ‘Mother of all budgets’,” said Wellington archdiocese EJP advisor Lisa Beech.

“The benefit cuts, introduced the following year, in 1992, were among the most significant contributors to the child poverty that has been a shameful feature of New Zealand’s social landscape in recent decades. The stigmatisation of beneficiaries, which accompanied the benefit cuts, was often as damaging as the financial losses,” she said.

Ms Beech said that the Wellington EJP Commission had argued for significant benefit increases in submissions to the Budget Policy Statement process in 2020 and 2021.

“Changes to base benefit rates are more significant than one-off supplementary programmes. As we have seen in the Archdiocesan Benefit Impacts held in the Hutt Valley, Kāpiti and Horowhenua, too many beneficiaries must seek additional assistance because base rates are simply too low to cover essentials. That takes a lot of additional support, advocacy and community time,” she said.

With rapidly rising housing costs affecting low-income households, Ms Beech acknowledged that there will be ongoing debate about whether the benefit increases will be enough to move families out of poverty.

“However, the symbolic importance in the first substantial shift in base benefit rates in 30 years is more important. For the first time in decades, the well-being of beneficiaries has been given priority in the Government’s Budget. This is an important step in restoring the mana and dignity of many of our poorest citizens, who are our brothers and sisters.”

Auckland diocese’s Justice and Peace Commission also commended the Government’s 2021 Budget efforts to improve the welfare of some of the nation’s most vulnerable families.

The other key component to addressing child and family poverty is the provision of more public housing and affordable private housing, the Auckland commission noted in a statement.

The commission welcomed the already-announced allocation of funding for Kainga Ora to buy land for public housing, but stressed that the waiting list continues to outstrip the amount of public housing available.

Loraine Elliott, Auckland diocese vicar for social impact and communication, said that she would have liked to see a greater sense of urgency about this in the Budget, in order to house the 22,000 families still on the waiting list.

Referring to climate change issues, the commission said it was pleased that Budget 2021 set aside funding to respond to the Climate Change Commission’s final recommendations.

“We welcome the Government’s commitment for the public sector to become carbon-neutral by 2025, but would like to see investment in reducing greenhouse gas emissions by 50 per cent across the whole economy by 2030,” the commission statement added.

Caritas Aotearoa New Zealand welcomed the increase in benefits, but said the Budget was not genuinely transformative. More needs to be done to reduce poverty, said Caritas director Julianne Hickey. One way could have been through the Working for Families tax credits to help the working poor, she said.

Infrastructure spending moves were welcomed by Caritas, but more could have been done concerning housing and public transport to correct past underinvestment.

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