Long queues for food parcels outside Māngere Budgeting Service last month. Demand for food parcels rose 300 per cent under lockdown. Photo / Supplied
Long queues for food parcels outside Māngere Budgeting Service last month. Demand for food parcels rose 300 per cent under lockdown. Photo / Supplied
More than 1000 New Zealanders a day went on a benefit last month as the impact of Covid-19 hit.
And demand for food grants rose dramatically, by more than 200 per cent, according to just-released data.
The latest Ministry of Social Development (MSD) figures indicate a huge acceleration in joblessnumbers in April, when the number of positive Covid-19 cases peaked and the alert level 4 lockdown was in place.
In all, there were 346,121 people receiving a main benefit, a 13 per cent increase since the outbreak was confirmed in this country in late February. Many of them are lining up at Work and Income for the first time.
Finance Minister Grant Robertson said this afternoon that New Zealand was faring better than the United States, where 10 per cent of the population had filed jobless claims - compared to 0.8 per cent in New Zealand.
In Australia, which had a similar wage subsidy scheme to New Zealand, 1 million people were out of work, he said.
But he warned that jobless numbers would keep rising.
"We will do everything we can to keep New Zealanders in work but the reality of a one-in-100-year economic shock is that we will see an increase in unemployment."
Asked for his message to those who had lost their jobs, he said: "Losing your job causes an enormous amount of distress and we absolutely understand and feel that.
"We do have support in place for people when that happens. But our goal as a Government is to keep as many people in work as we can."
National Party leader Simon Bridges said the latest jobless numbers was "incredibly sobering reading".
"This is simply the people who have applied for the unemployment benefit and doesn't include those who aren't eligible because they're in relationships or are living off savings."
Young people appear to have been the worst affected. The growth in 18-24 year-olds getting a Jobseeker benefit rose by 42 per cent since February, compared to 21 per cent for the rest of the population.
ANZ chief economist Sharon Zollner said it was typical in a recession for younger and older workers to lose their jobs at higher rates than others.
"Younger workers are less likely to have specialist skills that employers are unable to replace down the track, so they're more easily let go," she said.
"And older workers are more likely to take voluntary redundancy, but you wouldn't want to play that too much as mortgages are now so high lots of over-65s still have one."
She said industries likely to be affected, such as retail and hospitality, were those with young people. While some businesses were delaying lay-offs by using the wage subsidy or trying to make it through to level 2, others, like tourism, had seen the writing on the wall.
"Typically in a recession you see firms hold on while they wait to see what's happened. But with tourism it's clear that there's no international market for a while, so they are making those decisions earlier."
The number of special needs grants issued by MSD rose from 114,898 in February to 291,818 in April.
That was mostly driven by demand for food grants, which jumped by 208 per cent since February.
Activist Sue Bradford, the former Green MP, said the food grant numbers showed just how tight budgets were for many people.
"You've got rising number of people dependent on the wage subsidy of $585 a week, and if your rent is $500 then even if you get an accommodation supplement, it's pretty clear those numbers don't add up."
She said for those on Jobseeker - around $250 a week - were pushed even further to their limits.
"It's revealing what we've known, that those benefits just aren't high enough."
The Government lifted core benefit rates by $25 a week on April 1. It also doubled the Winter Energy Payment and made it easier to get the $72 in-work tax credit.
The latest benefit numbers were likely to have been far higher without the Government's wage subsidy scheme, which encourages employers to keep staff on.
In all, the scheme has paid out more than $10 billion to workplaces employing 1.7 million people.
