Tugging away at the web of injustice

Tugging away at the strands of the web of injustice that holds people in poverty and re-weaving the kete of social connection to create lives of dignity, purpose and hope. That is the daily work of social transformation that The Salvation Army seeks to be part of. How does the Budget 2021 help bring transformation for the people and communities we work with? 

The Government Budget on 20th May sees some more of those threads of injustice re-woven, including increasing core welfare benefits for the second year in a row, along with a significant set of initiatives focused on Māori housing and associated infrastructure.

When more than half of those needing social housing and more than a third of those receiving welfare support are Māori, the changes provide direct help to those in need and especially Māori, who are disproportionately affected. 

But “this is not going to be a game-changer” said SPPU Director Ian Hutson in response to the Budget. The small increase of $20 per week in core benefits comes on 1st July and remaining increases will not be paid out for nearly a year in April 2022. This is at a time when the 360,000 people currently needing welfare support is more than 50,000 higher than before Covid and the Minister of Social Development forecasts the number will further increase to 384,000 in March 2022.  

Symbolic Milestone

By March 2022 benefit rates will have reached or surpassed the levels recommended by the Welfare Expert Advisory Group (WEAG) two years ago. This is a symbolic milestone, but those WEAG recommendations were based on living costs from mid-2018. Living costs for beneficiaries have increased by 6.6% since then (StatsNZ Household Living Cost Index) and can be expected to increase by a further 2% by March 2022. Rents in lower income areas have increased substantially over that time.  The lower decile rent for a 3-bedroom house in Manurewa has increase by 17% since June 2018 (Tenancy Services Market Rent). As a result, the deficit between an adequate income to meet living costs and actual income provided by welfare benefits, identified by the WEAG work nearly three years ago, remains high, in excess of $100 per week.  

Prime Minister Jacinda Ardern has said that the next steps are work on reviewing Working for Families (WFF) and the Accommodation Supplement (AS), which provide other essential elements to income support for low income households. Reform of these areas were further key recommendations from the WEAG report. Entitlements and thresholds for support from those two programmes have not been adjusted for inflation or housing cost increases for several years, meaning with every passing year they become less effective in reducing poverty and hardship. The Salvation Army will be actively engaging with any work on these reviews, building on work previously done (e.g. Beyond Renting report 2018).  

The WEAG group also recommended developing a minimum income standard measure to help guide policy decisions about benefit levels. This should also be progressed urgently. The median equivalised household disposable income after housing costs in June 2020 was $31,717 per year or $610 per week (StatsNZ). Currently the single Jobseeker unemployment benefit it is $259 per week (42% of the AHC median income). The Budget increase means it will reach $315 per week in April 2022, 52% of the current AHC median.  

The problem for anyone on a welfare benefit is not just the core benefit rate but the complex set of additional income supports. It is vital that the reviews of WFF and AS are given priority for urgent change because they address the housing costs and costs of supporting children. For example, the maximum AS rate in Porirua is $220 per week, yet in our State of the Nation 2021 report we reported how the lower quartile rent in Cannons Creek Porirua has increased by 50% since 2015 to $440 per week in December 2020, which suggests that the $220 AS limit is far too low and out of step with real housing costs.   

Pasifika-light? 

Pasifika households are also heavily affected by high housing costs, low benefit levels and high child poverty rates. The Budget initiatives directed specifically towards Pasifika communities focused on increased employment training for 7,500 more places in the Tupu Aotearoa programme, as well as boosting support language teaching and education. But missing from the announcements was any specific funding initiatives for Pacific-led community housing projects or other targeted housing support.   

Pasifika children suffer poverty rates well above those of other children in this country. The Budget Child Poverty Report forecasts falling child poverty for the next two years, but the inequity in poverty rates is not expected to be reduced for Pasifika children. This is in contrast with tamariki Māori, whose poverty rate is expected to reach parity with the rate for all children by mid-2023. It looks like more needs to be done to overcome the depth of poverty experienced by Pasifika families in our communities. 

Family and sexual violence funding package is a key part of the Budget announcements and includes asking for public feedback on the plans for “community-led, whānau-centred” responses to respond to violence, heal harms and strengthen the protective factors that help avoid harm. Is this enough to be a ‘game-changer’ for families and whānau? 

Other encouraging changes in the crime and justice area included with additional funding to speed up the Family Court processes and support children caught up this, increases in legal aid funding, and funding for more Te Pae Oranga iwi community panels to resolve low-levels offending by young people.  

Addictions and mental health – not this year 

Addiction and mental health treatment services received little attention or direct new funding initiatives in this Budget. The huge programme of health reform the government has announced will undoubtedly impact the way such services are funding and organised, but no further insights can be drawn from Budget night, other than to note that overall health funding per person is actually budgeted to decrease in future years, from 2024 onwards. How will people in our communities find the help they need and how will our country rebuild a health system, that is being taken to its limits in responding to the Covid19 pandemic, to meet the growing need for mental health support and other future health needs out of a budget that is planned to decrease?  

Budgeted government spending for future years looks inadequate to meet the extensive investments needed to make the changes needed in health, education, welfare systems to respond to the huge social challenges of an ageing population, continuing high inequality, and climate change. There is still room for government to go further to support and fund the transformation needed to secure the better future we hope for out of this disrupted present.  

“That, and better will do” said The Salvation Army founder William Booth is reported to have said. We can be thankful for the progress made, for all who have worked hard to see this happen. But the kete is still being worked on, we will need to keep tugging at the cords that bind people in hardship. 

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By Paul Barber, Senior Social Policy Analyst