Kick in guts for recesson victims

Written By: - Date published: 9:59 am, March 3rd, 2010 - 10 comments
Categories: benefits, class war, gst, superannuation, tax - Tags:

The recession has forced tens of thousands of people out of work. There are now 276,000 jobless Kiwis. The lucky ones (only a third of the officially unemployed) can get the unemployment benefit. Now, the Government is letting inflation eat into their meager benefit payments.

Benefit payments are meant to be adjusted for inflation. This year December to December inflation was 1.96% and that’s the adjustment to benefits but there are all kinds of clawbacks the Nats haven’t adjusted.

An couple who lost their jobs in the recession with two kids sees their joint unemployment benefit of rise by $6.22 a week to $323.52 to precisely cover inflation but the family tax credits haven’t been inflation adjusted and remain at $146.27 – that means $3 lost spending power. Their accommodation supplement is cut by $1 to $174 and not inflation-adjusted either, so that’s another $4.5 of lost spending power. Then, if they’re lucky enough to be in a state house the rent will go up by $1.5 because it’s set to income. Basically, the family has lost $9 a week in spending power. Chump change for many of our righties but nothing to be sneezed at when you’ve got $643.79 to house and support four people.

The boot is going into the elderly too. Superannuation is meant to be 66% of the net average wage or greater but while the net average wage went up 4.14% last year (mostly a one-off effect due to the tax cuts, not pay rises) super is going up only 2.31%. Remember, John Key is promising his coming tax money-go-round will increase super by boosting the after-tax average wage. Well, we’re seeing here that National has failed to pass on that benefit to retired people.

Meanwhile, the government is getting ready to increase the GST the working poor and beneficiaries pay. Another kick for the elderly and those down on their luck through no fault of their own.

And what will they do with the money? Reward tax cheats and give Paul Reynolds, the failed CEO of Telecom who is paid $7 million a year, a $1000 a day tax cut.

Yeah, that seems fair.

10 comments on “Kick in guts for recesson victims”

  1. Captain Rehab 1

    It’s class war with a smiley nice front man.

  2. SPC 2

    And the thing is, the idea that the CPI actually represents the costs those on fixed incomes face is probably wrong most of the time.

    We know that some costs are rising locally an internationally – energy and food – these costs are on necessities rather than discretionary spending (which the global market is lowering), so the actual costs faced by those on fixed incomes is rising faster than their CPI increase compensation.

  3. Bill 3

    Just an observation.

    Bill English and the rest of them get their money from the taxes that you, I and they pay and as a beneficiary, so does mine.

    But if I ripped off the money pool for far less than the thousands that English and others have, I’d be in court on charges of fraud and facing jail time. Even if I’d inexplicably been capable of paying the money back.

    Then there are these ministers with their credit cards and their literal free lunches.

    Yet, if I cut the lawns for the old lady next door and she throws me a twenty for the trouble, what happens?

    I declare it to WINZ and lose $20 from my TAS payment ( thankyou Labour for the biggest cut in benefits since the early 90s) as well as theoretically causing a whole heap of awkward shit with regards IRD, my earnings and the old lady next door who was probably in some technical sense an employer.

    Okay, so I don’t declare it and everybody is happy, right? Even the moral crusaders of the right and centre because the period before I have to approach WINZ for the next food grant is extended slightly. Right?

  4. SPC 4

    I think we can look to the 1990’s for National’s form.

    They allowed tax credits to families to fall in real value (also the minimum wage).

    They left benefits alone, to be increased by the CPI – but only after first making large cuts.

    On Super they changed the way increases were assessed – so that the level reduced below 65% of the net average wage.

    It is quite pertinent to note that some of the money to compensate people for the GST increase will not come from the GST revenue but will come from reduced support for accommodation supplements, and a real decline in tax credits for families.

    What National will do is increase WFF tax credits in line with the GST rise to come, but neglect to cover inflation for the prior 12 months before, or the 12 months ahead after the GST increase.

  5. roger nome 5

    Why god why?

    • Macro 5.1

      Because we had a bunch of stupid idiots who didn’t know when they were well off, who listened to another bunch of stupid idiots (mostly of squarkback radio, msm, etc, and voted for a “change”.

      • Bill 5.1.1


        god reads ‘the standard’…so is the liberal word the word!? forgive this trembling and penitent former atheist and slammer of liberal sentiments O Macro One!

  6. Macro 6

    Bill – It doesn’t take god to answer roger!
    Countries get the govt’s they deserve. and NZ has gotten the govt it deserves.

    • Bill 6.1

      Nah. See, now I just think your covering your arse. Roger was very specific about who his question was aimed at and you have let your proverbial cat out of …………..why the lightning!? Why?!!

  7. Ed 7

    It would be good to see a chart of various statistics at relevant dates, showing each of the component bits that were covered in the article. Have National reduced from the 66% again so that they can give a bigger increase at the time of increasing GST to make people think they are being ‘compensated’? Quite how they will ‘compensate’ the retired who earn a little extra from bank deposits is unclear . . .

    It does get hard to find previous relevant posts on The Standard – perhaps there is a need for a separate website that shows both the graphs and their source data

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