NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / New Zealand

Budget 2021: Benefit boost of $50 would have doubled children out of poverty, Government opted for $20

Michael  Neilson
By Michael Neilson
Senior political reporter, NZ Herald·NZ Herald·
4 Aug, 2021 10:18 PM4 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

Minister for Child Poverty Reduction, Prime Minister Jacinda Ardern, sought advice on immediately lifting benefits by $50 a week. Photo / Mark Mitchell

Minister for Child Poverty Reduction, Prime Minister Jacinda Ardern, sought advice on immediately lifting benefits by $50 a week. Photo / Mark Mitchell

The Government considered immediately lifting benefits by $50, which would have more than doubled the number of children pulled out of impoverished households.

This would have also doubled the immediate cost of the benefit increase, pushing it above $1 billion.

Ultimately the Government opted to spread the benefit increase over two Budgets, lifting core benefits by $20 from July 1 this year and topping them up next year to lift all benefits by $32 to $55 overall.

The initial boost was estimated to cost just under $500 million, and total package $3.3b over four years, lifting up to 33,000 children out of poverty.

Advice provided by Treasury to the Government ahead of Budget 2021 considered a request from Minister for Child Poverty Reduction, Prime Minister Jacinda Ardern, on implementing a $50 a week benefit increase from July 1, or across two stages.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

This would have cost $4.04b over four years.

One paper, provided to ministers in March, said an increase of $50 per week would "help significantly with objectives to improve income adequacy, improve child wellbeing and reduce child poverty".

"It would support more ambitious targets for the second round of the three-year child poverty targets and ensure greater progress towards the 10-year targets.

Advertisement
Advertise with NZME.

"A $50 per week increase to main benefits would roughly double the reductions in child poverty on the before-housing-cost primary measure relative to a $25 per week increase."

A $50 a week increase would immediately have lifted 20,000 children out of poverty, compared to 9000 at $25 before housing costs, officials estimated.

A staggered increased would see 18,000 out of poverty by 2023.

However, there were "key trade-offs" with other spending priorities, particularly around incentives to study and work, officials said.

Discover more

Opinion

Teuila Fuatai: Pacific story of abuse in NZ

27 Jul 05:00 PM
Opinion

John Roughan: Ruth Richardson deserves acclaim

28 May 05:00 PM
New Zealand|politics

'Keeping an open mind': PM on border re-opening

21 May 05:00 PM
New Zealand|politics

Break all health election promises bar one - Treasury

05 Aug 01:13 AM

If benefits were increased by $50 per week, they would generally be around $25 per
week higher than equivalent rates of student support.

"This would have significant implications for the benefit and student interface and would likely reduce the financial incentives to study."

There was also a risk it could reduce the incentive to work, if there were not corresponding increases to in-work incomes.

"There are already relatively weak financial incentives to work fulltime for some people, such as sole parents and secondary earners in couples with children on low wages/earning the minimum wage.

"These benefit increases will weaken these incentives further. On the other hand, there continues to be relatively strong financial incentives to work for single Jobseeker Support recipients even with a $50 increase to main benefits."

Any of these negative impacts could be mitigated through increased support for working families, student support and/or minimum wage settings, officials said.

Advertisement
Advertise with NZME.

Another Treasury report in March said although a $50 increase would make a "significant difference for particularly vulnerable groups" the Government needed to also focus on paid employment.

"Our advice is therefore to progress, at most, a $25 per person increase to main benefits this Budget," officials said.

This approach would allow for "fiscal space" to use a range of levers to address objectives, including social insurance and health reforms, they said.

Ultimately the Government decided to lift student support (allowances and loans) by $25 a week on April 1, 2022.

Ardern said on Thursday the Government had followed advice of the Welfare Expert Advisory Group from 2019 in making its final decision.

She denied not choosing the $50 increase as being due to costs, and said rather the experts had advised not a flat increase but varied taking into account fairness and cost of living.

Advertisement
Advertise with NZME.
Save

    Share this article

Latest from New Zealand

WellingtonUpdated

Watch: New Cook Strait ferry sails into Wellington, greeted with a 'tug spray'

02 Jul 09:06 PM
New Zealand

Heavy rain warnings: BoP acts like 'scoop' for wild weather

02 Jul 09:03 PM
New Zealand

'Game-changer': Western BoP a step closer to Govt deal unlocking housing, jobs

02 Jul 09:00 PM

There’s more to Hawai‘i than beaches and buffets – here’s how to see it differently

sponsored
Advertisement
Advertise with NZME.

Latest from New Zealand

Watch: New Cook Strait ferry sails into Wellington, greeted with a 'tug spray'

Watch: New Cook Strait ferry sails into Wellington, greeted with a 'tug spray'

02 Jul 09:06 PM

Chocolate fish and coffee was on offer for those watching the arrival.

Heavy rain warnings: BoP acts like 'scoop' for wild weather

Heavy rain warnings: BoP acts like 'scoop' for wild weather

02 Jul 09:03 PM
'Game-changer': Western BoP a step closer to Govt deal unlocking housing, jobs

'Game-changer': Western BoP a step closer to Govt deal unlocking housing, jobs

02 Jul 09:00 PM
Notorious former Christchurch sex industry kingpin dies

Notorious former Christchurch sex industry kingpin dies

02 Jul 08:40 PM
From early mornings to easy living
sponsored

From early mornings to easy living

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP