This week's Budget is a chance for the Labour Government to take the crisis of poverty and inequality seriously. They can do this by delivering something serious or even transformational for those suffering at the bottom of the heap in New Zealand. In particular, a big increase in core benefit
rates would be the most effective way they could tackle the worsening problem.
Of course, Prime Minister Jacinda Ardern has already faced campaigns to increase benefits, and firmly said "no" to these as recently as December – you can see my roundup of this issue then: The Left's challenge to Labour's inaction on poverty and inequality.
However, pressure to deliver to those most in need is now just too great for the Government to ignore, and rumours are building that a benefit increase will be announced. Last week, Finance Minister Grant Robertson even signalled the Budget will include measures to deal with inequality and poverty, and Ardern came up with the term "The Compassionate Budget" for what is coming.
Business journalist Liam Dann forecast in the Herald yesterday some big spending to put more money in the pockets of the poorest: "There will undoubtedly be some big, new spending packages in this Budget. They will likely target child poverty and those suffering most from inequity" – see: Budget 2021: Why Grant Robertson won't match big spending Aussies (paywalled). And Dann outlines how pumping money to the poor will tick both moral and economic boxes.
Arguments for a big 'benefit boost'
If the Government ever needed permission to boost benefits, it received this in a landmark survey released in February showing overwhelming public support for increased income support for the poor – see Harry Lock's Survey finds 69% want income support for those in need increased.
The question was asked whether "the Government should increase the amount of income support paid to those on low incomes and not in paid work". Across all demographics, incomes, and voting alignments, the result was clearly in favour of government action. Even Act Party supporters tended towards an increase in income support.
Responding to the poll, the ActionStation advocacy group said this about benefit increases: "The time for excuses is up. This poll shows the government has a clear social licence and mandate, on top of its moral obligation, to lift inadequate welfare payments to 'liveable' levels, and it needs to be done now, in this Budget round."
Plenty of high-profile voices have also been urging Labour to do the right thing. For example, recently political journalist Andrea Vance highlighted that while Ardern had come to office on a promise to reduce inequality, she hasn't done so yet – see: The social welfare net is threadbare – can Grant Robertson mend it?. In this, Vance suggests giving beneficiaries a proper payment increase as well as modernising the whole welfare system.
Similarly, writing in February, Branko Marcetic argued that lifting benefits is the "bare minimum" that the Government should be doing to work on fulfilling its promises. But he admits a benefit rise would have a downside for the Government: "Doing this will certainly mean Robertson may have, at first, less impressive debt numbers to show off to business leaders at lunches and breakfasts held in luxury hotels" – see: NZ's economic "bounce-back" is a myth – but lifting benefits would bring it closer to reality.
Welfare researcher Louise Humpage has more recently argued that benefit increases and other positive welfare reforms are desperately needed, because what few initiatives the Government has already taken have only had a negligible impact – see: If New Zealand can radically reform its health system, why not do the same for welfare?
Humpage also points out that the Government's own Welfare Expert Advisory Group made a number of recommendations for reform, which the Government is largely ignoring: "It made 42 key recommendations but only a handful have been addressed. Almost two years on, we are still waiting for real action."
Latest "grim" poverty statistics out
More evidence of the "grim" situation came out on Thursday, with the release of the Government's first Annual Report for the Child and Youth Wellbeing Strategy and another report on Child Poverty Indicators. The most significant finding from these reports was that 20 per cent of children live in households where food runs out either sometimes or often. For details, see Rebecca Moore's Advocacy groups slam 'racist', ''discriminatory' system after Government releases child poverty report.
The article reports the response of Child Poverty Action Group's Janet McAllister, who says "We should be angry about this" and she admonishes the Labour Government for only taking "small steps to address these big issues", saying although there are indications of slight improvements in poverty levels, "It's not okay to be a little bit better than four years ago." She concludes that "The Government has power to change this terrible situation we've been in for far too long."
Guardian journalist Tess McClure labelled the stats as representing "slow or non-existent progress" on dealing with child poverty – see: Ardern faces calls to boost child poverty spending in budget amid glacial progress. She reports Children's Commissioner Andrew Becroft's statement in response, that there was "an inarguable need to increase benefits", calling "for more spending for children in the upcoming budget".
