Budget Day is now seven weeks away and lobby groups are hammering on the Finance Minister’s door for the relief they believe they need, deserve, and which is their right.
The Save the Children lobby group issued a press statement this week saying:
“The grim reality is many families are continuing to try to make do without life’s essentials such as healthy food, warm homes or access to health care”.
Advocacy and Research Director Jacqui Southey says while the child rights organisation is supportive of the lift in core benefits that will come into force later this week these “small lifts” will not cover the steep rise in the current cost of living.
“Economic modelling on adequate benefit levels released by the Fairer Futures Coalition clearly shows that even with the new increase, benefit levels fall well short of covering the basic cost of living.
“It is essential that every New Zealander can attain their right to a decent standard of living and incomes levels are critical to achieving this. “Families on the lowest incomes are so stretched they do not have the luxury of cost cutting to make ends meet”.
But Finance Minister Grant Robertson, who delivered what he labelled a well-being budget last year, may not find it so easy this year. Already inflation has reached levels not experienced in decades and the ANZ Bank’s economists have warned it could reach 7.4% in the second quarter.
That could swallow any value from an increase in benefits just as it might be reaching those to whom it is directed.
The government’s own measures are not helping to ease cost pressures, although it did claim the credit for the (temporary) reduction in fuel costs. The boost in the minimum wage, for example, is no help to many of those businesses struggling to survive in the wake of the Covid pandemic.
Now the government is introducing what it calls “a major step towards a fairer system for New Zealand workers”. It has introduced its Fair Pay Agreements Bill to Parliament, fulfilling (it says) its pre-election commitment “to lift incomes and improve working conditions of everyday kiwis” .
Workplace Relations and Safety Minister Michael Wood says people are at the heart of the Government’s economic recovery plan.
“We know when we invest in New Zealanders, they have greater opportunities to prosper, provide for their families, and contribute to our nation’s success.”
Wonderful, you say.
But don’t be surprised if it feeds another inflationary cycle, just when the current one may be easing.
And just as new fair pay agreements come into effect, so their value is eroded by the impact of inflation.
It’s a grim cycle that New Zealanders had to live with way back in the 1970s and 1980s.