Kiwi families feeling Covid-19 crunch - Salvation Army report

Many Kiwi families will emerge from the Covid-19 crisis to face unprecedented hardship, the Salvation Army says, prompting a call for a transformative 2020 Budget. Photo / Richard Robinson

Many Kiwi families will emerge from the Covid-19 crisis to face unprecedented hardship, the Salvation Army says, prompting a call for a transformative 2020 Budget.

The charity has today released its third "dashboard" report laying bare how the pandemic has heaped more pressure on the country's most vulnerable, from food shortages to increased debt.

And the situation was "particularly concerning" for Māori, said the Army's social policy and parliamentary unit director, Lt. Col. Ian Hutson.

Data in the report showed how nationwide demand for food parcels had peaked during lockdown to levels three times that before the pandemic.

The number of Ministry of Social Development (MSD) Special Needs Grants for food paid out each week also appeared to have peaked around the middle of last month.

The report found the 59,300 grants paid out in the week to April 24 was still two and half times higher than the weekly average of around 23,000 during January and February.

That meant around 166,000 additional food hardship grants were paid out in the five weeks of the Level 4 lockdown, on top of an already high need for food.

KiwiSaver hardship withdrawals were expected to spike in July, especially with the Government's wage subsidy ending soon – something that was also predicted to lead to a surge in loan inquiries.

Economic forecasters had warned unemployment rates could surge to 10 per cent by the end of the year, which would "massively affect" financial hardship levels for Kiwis, the report found.

The number of people already registered as work-ready jobseekers had continued to grow, rising by nearly 34,000 to 115,898 in the five weeks to April 24 – a 41 per cent increase.

If the growth of around 7000 per week continued, that number will have doubled by mid-June, about the time that the 12-week period ended, which the wage subsidy scheme payments were meant to cover.

The wage subsidy was being paid to just under 1.7 million workers and costing around $10.5 billion by April 24.

Yet the report noted that increasing unemployment was not affecting all communities at the same level.

Unemployment levels in Northland, home to a high proportion of Māori, had increased from 8.9 per cent in January to 10.6 per cent by late April.

The Queenstown Lakes District – which had an unemployment rate of just over 1 per cent in December last year, among the lowest in the country – was also experiencing an economic shock with the tourism crunch.

Since the pandemic emergency response began, there have been 5422 individual welfare requests, and just under a third are from people who have no employment, with others struggling with reduced hours and incomes.

The report also noted how Covid-19 would make the housing crisis even worse for many families – especially Maori.

It singled out a whānau forced to live in a cowshed and old van just outside a Northland town; a Dunedin whānau isolated in a motel for six weeks and now unable to move until a social house is available; and a whānau paying $475 in rent, living on a wage subsidy of $580.

One of the few positives in the report was Health Promotion Agency data indicating that many people had been drinking and gambling less throughout the lockdown.

But the overall picture pointed to the need for a "refreshed" economy and social environment for New Zealand over the next 18 months, Hutson said.

The Army had pinpointed five areas it wanted to see prioritised; food security, an income guarantee for workers, stronger and more strategic credit and debt regulations in line with those brought in in the UK, millions of dollars for alcohol and other drug services, and a historic, multi-billion dollar allocation for housing.

"New Zealand must have a new sustainable economy that includes all New Zealanders having greater wellbeing," Hutson said.

"The 2020 Budget needs to make Government financing available for this task."