Budget 2011: Maori Party concerned about KiwiSaver changes

Maori Party MP and whip Te Ururoa Flavell. Photo / Andrew Warner

The Maori Party says it can accept some cuts to Working for Families in the Budget but has concerns about how changes to KiwiSaver will impact on low income Maori.

The Party's whip Te Ururoa Flavell said it was important to address New Zealand's savings record and the proposed changes could have a backlash.

He said a higher level for workers' contributions could prove unaffordable for low income earners already struggling with higher costs.

However, the party was fairly comfortable with changes to Working for Families for those on higher income, as long as those on lower incomes received more.

He said some Maori had alternative "Iwi Saver" schemes to use if they could not afford high contributions, and the Maori Party supported such initiatives. They included Ngai Tahu's savings scheme in which members' contributions were met dollar for dollar up to a maximum of $200 a year.

This Budget is an important one for the Maori Party as it faces an election in which it has to try to ward off a challenge from the Mana Party, founded by its former MP, Hone Harawira.

Mr Harawira has criticised the Maori Party for staying in coalition with National, saying it put it in the position of voting for the previous Budget which lifted GST.

Mr Flavell said the Maori Party had to vote for the Budget under its agreement but that would not stop it speaking out against changes it disagreed with.

"While we can't win everything we can have some influence."

He said the Maori Party would object to any steps that stung people who were already struggling, such as the elderly, the very young and those unemployed because of the recession.

"One argument is that everyone is suffering. That might be true but the hope is that whatever intiaitives come through from the Budget are not going to impact again on those at the lower end of the scale."

He said the GST increase last year and increased costs since then had made things harder for poorer families, despite the government compensation for the GST increase by cutting taxes and lifting benefits.

"It seems that may not necessarily be the case, because the evidence suggests - anecdotal or otherwise - that people are certainly suffering more in the curernt economic climate."

He said the Maori Party was aware that the economy had worsened since then because of the earthquake and bail outs, such as South Canterbury Finance.

He hoped the Budget would consolidate gains made in previous years such as Whanau Ora. In 2010 the new system of delivering social services was given $135 million over four years to implement. However, chosen providers were expected to use existing funding from government contracts rather than get extra funds.

Twenty-five providers had been chosen and there was potential to roll that out further.

"The approach so far does suggest there is more bangs in the buck in that regard and a change in approach has certainly been celebrated by Maori providers."

The government had already said it would increase funding in education and health and Mr Flavell expected that would have some spin offs for Maori, including new intiatives for te reo after a recent taskforce suggested current funding could be better used.

Labour MP Kelvin Davis said the main priority for Maori in the Budget would be whether it created jobs, including training opportunities.

He said small Maori communities were weakening because the lack of jobs meant people had to leave.