New Zealanders are battling rising living costs at a time 11.1% of the working age population is receiving a main benefit, and hundreds-of-thousands of people are receiving government grants to help pay for food and housing.
According to Ministry of Social Development data released on Thursday, 348,339 people were receiving a main benefit as at the end of March.
That’s 17,595 people fewer than a year earlier, but still 61,890 more than as at March 2019, when 9.5% of the working age population was receiving a main benefit.
The most common type of main benefit is Jobseeker Support. This is available to people actively looking for or preparing for work, including people with part-time work, as well as those who can’t look for work at the moment due to health conditions, injury or disability.
As at the end of March, 177,642 people were on Jobseeker Support. Of these people, 100,854 were “work ready”. That’s equivalent to 3.2% of the working age population.
This aligns with the unemployment rate (calculated differently, via a survey), which came in at 3.2% in the December 2021 quarter. The underutilisation rate was also low in December 2021 at 9.2%.
While the number of “work ready” people on Jobseeker Support fell from last year, there were still 29,668 more “work ready” people requiring support in March 2022 compared to in March 2019, pre-Covid.
So, despite New Zealand having a “tight” labour market, which is helping push up wages and prices more generally, there are around 100,000 people looking for and/or able to work.
Ministry of Social Development data also shows large numbers of people are continuing to receive grants to help them cover food and housing costs.
The Ministry distributed 363,888 food grants in January, February and March this year - 4188 more than the same period last year, and 151,017 more than the same period in 2019.
The number of emergency housing grants distributed in the March quarter increased by 906, compared to the March 2021 quarter, to 35,220. In the March 2019 quarter, around half that number were distributed.
While the increase reflects a lift in hardship, it also reflects an increase in government support to some extent.
For example, the Government in November 2021 temporarily broadened the criteria for hardship support so more people could qualify. Until June, single people earning under $800 a week, or couples earning under $1600 a week may be eligible for assistance.
The closed border also freed up motel rooms, which increased the stock of emergency housing available.
Nonetheless, a large portion of New Zealanders are still requiring government support to get by at a time the cost of living is expected to remain high, and the unemployment rate is expected to rise.
65 Comments
Yes let's cull everyone getting a handout. It's only 40 percent of households who receive more tax credits and benefits than tax they pay, and they won't be doing it tough, let alone their children. Just creaming it in from the 3% of households who pay in 24% of the tax take. God. Those top 3% are so hard done by, can you imagine the lackluster lifestyles they live because they're expected to line to pockets of the poor. Jesus. Why can't we just live in a equal society where we all pay a nice equal share. Why should the rich pay more really... Wouldn't society be so much better for increasing that wealth gap. Obvious /s
Pssst the top 3% of taxpayers will almost certainly not be the top 3% of households in terms of wealth. That's a longstanding point of confusion with a tax system that aggressively taxes middle-income wage earners as if they're on $150K by way of hoarding inflationary receipts - and that's by design.
What you need to think about is the untaxed revenue from things like gains on property, which flowed through to people in chunks bigger than 99% of salaried incomes, and without a cent of tax flowing through on them. That's how you really build wealth in NZ, apparently.
Even if the top tax payers are the richest people it doesn't really matter. Since the rich are getting indirectly subsidized by taxes. If you have an employee and the get a topup for food, health care. roading to live an ok life then you are using that in order employ them at a lower wage than they need to live at an acceptable level. If the government pays for your doctor it doesn't go to you it goes to the doctor, if they pay for a rent subsidy it goes to your landlord not you. If they pay for food it goes to the supermarket.
The whole idea you not paying your way because the tax take from you is less than you pay is just silly. If you work 40 hours a week no matter what your wage is you are contributing more than you are taking. This is probably more true than if you are simply own something and collect economic rent and pay tax on it, no matter how much you earn.
Please note I am not against landlords, I am one, although I don't speculate in property for moral reasons. There are few people would pass up the opportunity to make easy money if they have the chance.
I reckon we fix the glaringly stupid bits of Kiwisaver first before we go yeeting non-means-tested Super, like taxing it annually instead of on withdrawal like a sane super scheme would. Plus you don't really to go giving too much of an 'up yours' for people who have saved for their retirement just so those who didn't bother can have an easy ride. I wonder if some sort of state annuity option with tax-free interest distribution could be offered to those who actually did the right thing.
Means tested super would require an army of accountants to chase and would come at the delight of the legal and accounting professions who would have a new revenue stream.
It would only be applied at any degree to that easily targeted group - those on paye. Those with Companies, Trusts, overseas income and so forth would walk away.
I believe Mr Muldoon worked this one out and gave up.
TOPS UBI however would sort it. This is where the young should be voting.
But don't forget that people-breeding has been a legitimate life-style choice for years. Breeding to multiple fathers has been a career choice. The mothers don't even have to name the fathers so the state can be reimbursed by maintenance payments because the state now realizes that the mothers will be bashed or even killed by the fathers in retribution and the judges will then pat the fathers on the head. What trash our society has to put up with......
If you put 1,000 people into crap housing without enough money to live with dignity or take part in society, then you make sure there is only 1 job for every 10 of them looking - and that's sporadic shifts in a warehouse or call centre two buses away - and, then you surround them with people driving around in expensive BMWs towing boats, and then you expose them to loony tune commentators in the media calling them 'trash;.... what do you bloody expect?
Don't worry, you don't have to have reckons on it - there is plenty of cause and effect evidence. What you get is a large proportion of those 1,000 people getting depressed, living under stress, making crap decisions they regret, feeling crap about life, taking risks, self-medicating with drugs and alcohol, and hurting each other and those around them. You can point to the 'one that made it and now owns a Pak n Save' as a shining example to everyone else - but that is like pointing at the 500-1 horse that came in first on the nose, and saying that all 500-1 horses should win.
Dear me.
Overlooking again that the state sponsored breeding programme is a career choice.
You don't have 8 kids by accident. You have them for the $ incentives and the ability to get every little bit of assistance going - screaming down the local winz office and prime time tv if you don't get what you are 'entitled' to. Which for many of these breeding units is nothing.
I don't need help. I didn't go out and breed multiple kids and then expect tax payers to play daddy.
2 x Units in emergency housing $3k per week. Add another $1,000 + in benefits. That's the cost of one breeding unit per peek with multiple kids.
Yep....$200k ish per anum we pay per breeder and offspring.
I don't believe that people that are unemployed deserve to live in dignity, and there is no amount of money you can pay them that will make it happen. Dignity is what you get when you work for a living.
What we do need to give people is to give them a reasonable opportunity and motivation to get a job. To me this includes free education including higher education, removing police checks for even the most menial of jobs. Free health care, enough food, and reasonable housing. The ability to keep more of your income once you start working.
However society should still judge them for not having a job, that is part of the motivation part.
People farming has also been a legitimate lifestyle choice for the last 30 years. With government subsidies to boot. Also when your stock becomes uneconomic to farm. You don't have to knock them on the head. You can just send them off to the government farms to be looked after.
A few afternoon drinkers on this evening then?
Govt 'handouts' are of course either:
- A subsidy for employers who would not otherwise be able to pay their staff enough for them to survive in NZ, or
- A payment to job seekers for their help with fighting inflation - remembering that we apparently need at least 100,000 people unemployed to prevent wage inflation
On the point of unliveably low wages, our problem is not scarcity - total wages in the country are more than enough for all people working to live comfortable lives. The challenge is how those wages are distributed.
For example, we could raise the same amount of income tax (just over $40bn) with the folllowing tax bands:
$0 - $48k: 0%
$48k - $75k: 20%
$75k - $200k: 40%
$200,000: 66%
I am not advocating these change by the way - a land tax would be far preferable. I am just trying to illustrate that a more progressive tax system would mean far less people needing Govt support. The issue of course is that middle class swing voters have got used to decent wages and cheap prices that are enabled by subsidised domestic wages and sweatshop labour overseas. For example, if shop staff were paid a true living wage - enough to rent more than a pokey room in a mouldy shack with seven other retail slaves - the stuff we bought in shops would be more expensive, and middle-class NZ would have to accept a real terms drop in disposable income (or bide their time so they could vote in an ACT / National wellbeing demolition derby)
I understand the need for assistance to the most genuine cases, which will make up the 100,000 you have suggested to combat wage inflation.
in broader terms people on benefits (without a justifiable reason, with large families) and in prisons cost us more through healthcare and social housing, rehabilitation, which adds to existing pressure on the middle income earners through high rents, overworked healthcare system, increased taxes etc., and cannot be sustainable in the longer run. This cannot be fixed with immediate policies as welfare is ingrained in our economic setup
Land tax is absolutely a good start but you will have complications around implementing them throughout the country especially where Māori interests are vested and will increase operational costs for the government
As for the goods we buy in shops, there is no other option than to rely on cheap overseas labour.
There is a logical flow of sorts there - but I would suggest the place to start is with the 100,000+ unemployed people and the other 200,000 who are working but can't get enough hours. Our hugely expensive prison, criminal justice system, and healthcare system is full of people that have been (or whose parents have been) in this cohort. The direction of causality here is absolutely known... if you grow up in a stressed household with no money, your chances of offending, having relationship breakdowns, being homeless, going to jail, needing mental health support etc is massively higher.
So, how about we reject the very notion that we need an underclass in the first place? Maybe a cheaper option would be to guarantee anyone that wants work a job that pays a liveable income. And if the jobs aren't there, just create them. It is not like there aren't loads of jobs that communities need doing - fencing off streams, maintaining trails, trapping possums, doing shopping for older people, teaching kids music, etc etc.
Agreed, I used to walk through an alley way to the train station each day. Path covered in lichen, overgrown trees dropping fruits, fences that need repairing and a bit of love.
I've always wondered why we cannot provide incentives for jobseekers to put their hands up, do some work and earn some money. Provide a van/bus that can pick them up/drop them home if needed, highly likely they'll all live within the same suburbs anyway. It doesn't need to be a profit making exercise, but can be rewarding for those who just need an opportunity. Even if it's just an honest days work for some beer money for the weekend *shrug*.
The problem with such schemes is that individuals lacking the skills/experience/ability to obtain and keep a job like repairing fences or pruning trees aren't going to deliver very good bang for buck. Potentially a net loss by the time you also pay for the infrastructure to organise and transport them.
Yes, the job guarantee does not replace professionals or public service, it supplements them. Basically community groups identify suitable projects and activities, and people looking for work get assigned to them based on their skills. If people have particular skills (eg journalism) they might get special projects like recording local history. There is nothing new in any of this - Roosevelt new deal was similar and India have run a huge rural job guarantee scheme for the last couple of years.
Sure, nothing new, but there's a reason why they're not sustainable. You're wanting to use people that aren't even up to the standard of being temporary labour hire job type workers, creating a system that finds and administers tasks for them to do around the community, tracks they're being done safely and effectively, and pay them to do it. If you got 10 cents value in the dollar, it'd be impressive.
We used to have that. They were called the Ministry of Works and the Railways, but neo liberalism did for them.
Sadly, neo liberalism has infected the minds of a lot of people in this country, where they think it is OK for people to own 50 houses, rather than people being able to house themselves. Unfortunately, housing investment in this country is a zero sum game. For someone to win someone has to lose.
Talking of an underclass, the place of Maori at the bottom is an indictment on all of us in the majority whether we like to admit it or not. We should do more to fix the issues, but are unfortunately a great number of NZers are too racist to countenance it. Just look at the way co-governance makes people froth at the mouth without knowing any of the detail. Its just easier to say they have the same opportunities as the rest of us and ignore the problems.
I know you're not advocating the changes, but sheesh we hear enough about how the upper earners shoulder so much of the tax burden, despite anyone with a basic grasp of 5th form maths knows that the amount of tax you pay is directly proportionate to the amount you are paid, not how hard you work.
Imagine the noise if those brackets came into play.
Nothing says "stop treating housing as an investment" like "We're going to tax everything you own as if it's an investment".
Unsure what sort of economic return my hoon car is meant to be generating me. Does this mean I get to offset that against what it's cost me? Do I get to claim a portion on my mortgage interested thanks to the space it's taking up in my garage? After all, if it's supposedly generating me income then I should be able to claim holding costs.
This is how you end up with tax codes as long as your arm.
lol
Well, if you think about it I am suggesting to forget the idea of income at all.
You just pay for what you have, not what you make.
That would be the most just and easy tax ever.
That would very strongly discourage toxic behaviours like landbanking / ghost houses,billion dollars account that you never plan to use, etc...
The developing economic situation here is looking like some massive 'train wreck' about to happen. If I thought this government had any answers then I wouldn't be quite so worried but results are definitely not their strong point. Most of New Zealand will be scratching their heads by the end of this year and asking themselves what actually was the meaning of those so-called "Well-being Budgets".
fyi
I have deleted a vast array of toxic comments (which will have included some that were sensible, sorry).
That conversation was dispiriting - that there are some who think so banally. Some of you have been banned for taking the thread into the sewer. Please don't ask to be reinstated.
If you want to post trash, please do it on Facebook or YouTube. Don't do it here.
grrrrr ....
Look at the absolute rocket under the Emergency Housing since 2019. Yet the number of payments has been fairly flat.
Weirdly since the pandemic has struck and borders have closed, its been a fantastic time to own a motel. Name your price rates that the government will pay you on a long term basis.
We have an extended family member who is in their mid 30s and has never worked a full day in their life. Able bodied, intelligent as a kid but from a violent home (Father was a hitter). They are now a P addict with their mother raising their kid for them. Wider family have tried to help but made no progress. There is little to no professional support available. If this can happen in our family it can happen in any family. There is a percentage of the working age population who cannot or will not work unless there is some wrap around care and support for very complex needs.
Sorry to hear about the family member.
There's all manner of help available, the two biggest hurdles you can't solve with money are:
- the addicts desire to change (and willingness to stick at it)
- the addicts relationships with other addicts
Sadly the family members situation is fairly common now in NZ. We broke our society to the point where addiction and mental health issues are rife, and expect to be able to solve it like it's rudimentary.
Your comments are sadly very true. Breaking away from those that supply and enable is almost impossible in small town NZ, no matter how hard the family tries to help. People in this situation do need state support. Just telling them to buck up and get a job won’t work. They also often have kids who need care, this falls to older family members who may have limited funds themselves. There will always be some people for whom benefits are a way of life due to the mental and financial hole they are in.
my many south african fiends tell me they do not have these issues in their country. its because they cannot afford to pay these people, We may well become the same, if we do not reconcile the cost of these payment to our ability to afford the payments. I do not understand how we have employers begging for truck drivers.... my partner got her truck license in 3 days.... oh yes they drug test test drivers.....
We welcome your comments below. If you are not already registered, please register to comment.
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.