Poverty is a political choice, why are Labour choosing it?

Written By: - Date published: 1:30 pm, August 1st, 2022 - 54 comments
Categories: benefits, greens, labour, poverty - Tags: ,

Labour announced earlier in the year that it would give a $350 cash transfer to all New Zealanders earning less than $70,000 (gross).

Except beneficiaries.

(eligibility for CoL payment is those that don’t get Winter Energy Payment, which excludes nearly all beneficiaries including those that get Superannuation).

This is yet again Labour keeping beneficiaries in their place.

Donations to Auckland Action Against Poverty (one of the main beneficiary support and activist groups in NZ) can be made here.

Greens’ press release from May, where they called on Labour to change the criteria before the legislation was passed,

“The $350 Cost of Living Payment should be available to those who need it the most. Labour can do that today by including people on the benefit as well as under 18’s on Youth Payment and in work,” says Ricardo Menéndez March, Green Spokesperson for Social Welfare.

“Excluding people from the Cost of Living Payment because they already receive government support means more families will be unable to make ends meet through the winter. It is punitive and unfair.

“In 2020, the Government doubled the Winter Energy Payment to provide extra support. Now, they’re saying that people who get this payment shouldn’t have any top up – despite rising costs of living, and despite slow progress on child poverty targets.”

“Poverty is a political choice. No one should be struggling to pay the power bills or feed their kids in this country. People on the lowest incomes need a government that is committed to liveable incomes for everyone – and with more Green MPs we can make it happen,” says Ricardo Menéndez March.

Winter Energy Payment is $20/wk for single people with no kids, and $31 for couples and families, for five months. That’s an approximate total of $400 and $620 per year compared to the $350 CoL payment.

Is the WEP meant to be a substitute for the CoL payment? Really? Because I thought it was a cunning way of Labour lifting benefit rates without the political cost of lifting benefit rates. And doing that in winter because of the increased cost of living in winter that happens because it’s cold. The reason for lifting benefit rates is because beneficiaries live in poverty and can’t afford their power bills.

The CoL payment is because of the increases in the costs of transport, food and other inflation affected costs. Which affect beneficiaries as well. It’s not like beneficiaries magically can stretch the WEP to cover the latest increases in the cost of living.

How to understand this? Labour have a long history of treating beneficiaries as second class citizens. The Clarke government removed the hardship grant Special Benefit, and created Working for Families assistance that excluded beneficiaries. The Ardern government excluded beneficiaries from the early pandemic financial support. They’re about to introduce a two tier benefit system where by some workers will get a larger payment if they lose their jobs.

Ardern’s government has increase base benefit rates, and increased the abatement rate for beneficiaries with earnings. Yes, yes, I know they’ve done other things as well, but the point here is that the combination of all the things Labour does still fails far too many people, and that comes from Labour’s values. 

However Labour refuse to acknowledge and address that many beneficiaries get much less in their bank due to the complex way that supplementary benefits are calculated. This means that some of the most poverty-striken people get less than those with more leeway.

It also means that people who cannot supplement their benefit with part time work (think disabled people and solo mums with young kids), are ignored.

The only way I can make sense of this is two interacting political positions:

  1. work is overwhelmingly the best and only way to reduce poverty, so the focus is on waged people and job creation
  2. Labour can’t save everyone, so they focus on the pragmatics of stopping people dropping into the underclass, and pulling those up from the underclass that they can

There’s nothing about ending poverty in that position.

Nothing tells me more about Labour’s values than the fact that they won’t raise benefits in real terms for people who cannot work. If someone is so disabled that they cannot even earn part time, they are consigned to livelong poverty. WINZ will systematically strip them of any savings or assets, and they will then subsist on $315 or $359/wk ($16,380 or $18,668/yr), and whatever extras they can scavenge out of WINZ.

In other words, Labour are knowingly and intentionally keeping people in poverty who have no other way out. That’s a choice. There are a lot of ways to solve the problem of the poverty of people who cannot work, and Labour won’t do them.

For some of the things that would work, see:

Welfare Expert Advisory Group Report

Green Party Income Support policies

Te Pāti Māori Income Support policies

54 comments on “Poverty is a political choice, why are Labour choosing it? ”

  1. Mac1 1

    Weka, I have just returned from the annual general meeting of Grey Power. Grey Power advocates for a fair superannuation. There was no mention at that meeting of poverty or Super being too low.

    If what you are saying is correct, then we all missed it. We would need to know since that is GP's prime function as an advocacy group.

    I also know that I and my two brothers all receive Super, and we all get by, them in their rentals, private and council provided, and me in my own house. I have private savings- they do not, yet they live good lives on their super and supplements.

    The only person I have heard complain about the size of Super was a retired Judge earlier this year, who couldn't afford to live on Super……..

    • weka 1.1

      fair point, I should have been more specific about the Super bit.

      Strange that Grey Power aren't talking about elder poverty though. Does this reflect their membership?

      Single, living alone Super is $463/wk or $24,073/yr. More than SLP, but not hard to see how that is poverty for people with large accommodation costs and no other income or investments.

      • Mac1 1.1.1

        Does this reflect our membership? I don't know, We don't have a register of income and assets. People pay $25 to join as a single member of our association. For that they get the right to GP Electricity which is cheaper than most if not all, and in our case a discount book of 75 businesses offering discounts. Neither of my brothers is a member AFAIK.

        One brother pays $230 pw private rent with a supplementary grant, the other pays $150 for a council flat. They get by. One brother manages little luxuries like a coffee in town, the other is still a smoker. Yet they get by. Similarly, for my sister-in-law. They all manage well.

    • Craig H 1.2

      There were some remits on the subject at the Labour Party regional conference I attended, but they were complicated additional payments rather than the obvious solution of just increasing the rates of the existing payments, whether that's Super itself, WEP or accommodation supplement. That was pointed out by other speakers as was the issue that targeted additional money is a super surtax by another name, so the specific remits weren't supported, but the broader point of checking various existing rates for adequacy and increasing if necessary was definitely supported.

      • Mac1 1.2.1

        One question is whether we need an across the board payment for Super to be higher, or whether the basic Super meets the needs of any or most, but some will require more be it for health and medical needs, housing, transport etc. which will be met by special, targeted, needs-identified payments.

        My reference to the retired judge was targeted at the perceived needs of people used to different standards of living.

        What do we see as being poverty, what are straitened means, what is a decent standard of living; what is the standard?

        • Craig H

          Personally I think NZ should tax higher and provide more universal services free or at a much lower rate. If people particularly want to "go private", they still can. That said, we already have targeted payments or options for most of those things in your list, so if fully-funded services for all is not palatable, ensuring all of those targeted mechanisms are adequate and fully-funded for the targeted population is the next option.

          Housing has mechanisms of state/social housing and payments (accomodation supplement).

          Public transport is moving towards free (hurry up already!) and is already free most of the time for Gold Card holders. Work on options in smaller towns is needed though.

          Access for reduced mobility has existing schemes.

          Health and medical needs should just be fully-funded, but increasing things like targeted subsidies for community services card holders and the disability allowance is also necessary.

          Generally though, poverty would be a lot more tolerable if taxes were higher and all basic needs were automatically taken care of whether that's through provision of services and housing, or something like GMI/UBI.

  2. Cricklewood 2

    Wait, surely that's wrong? Beneficiaries are affected most by cost living increases.

    I never realized they were excluded it's a real wtf moment… made even more galling we’re giving it to people offshore for efficiency reasons… Kindness my arse.

    • weka 2.1

      it's shocking eh. So weird of Labour to do this.

      • roy cartland 2.1.1

        Just as weird is that anyone to whom $350 makes a meaningful difference…. needs way more than $350! I can't figure out the target for this. Voters (if so, who)? Universal-ites? General pop?

        As for targeting; why don't they take the Natz' advice and target tax cuts… to everyone but the (very) rich; then apply taxes to the (v) rich to pay for it. There's more of us than them, right?

        • Cricklewood

          Its tax reform we sorely need, at least 20k tax free threshold possibly even higher, then an adjustment of the brackets to make it tax neutral at say 100k paid for by increases above that.

          • Rosalene Bradbury

            FIFTY K tax free then 50% tax thereafter. Business and Income. No ifs of buts. Simple.

        • Mac1

          $350 is 160 kg of potatoes, 120 loaves of good bread, 35 litres of olive oil, 120 kg of carrots, 100 kg rice, 120 bottles of delivered milk, 300 packets of Japanese noodles; it's a heater run for more than 1000 hours at 1 kw per hour. It is significant.

          It's 600 vegetable seedlings, 50 kg of seed potatoes, 100 packets of seeds, 25 kg of cheese, 3 dozen bottles of wine………….

          It’s 108 pairs of socks, 18 winter warmth undergarments, 3 new woolly jackets, a second hand bike, a new guitar, 25 seats at the movies, 30 weeks at the gym, 75 cups of barista coffee…..

          • DB Brown

            Don't know where you're shopping but vege seedlings are barely worth buying in Auckland and I just got rorted for a pack of tomato seeds $7. They also had bags of shit, 5 kg, $20.

            $350 could buy 87.5 kg of pure clean green NZ sheep shit.

            That is what I weigh. I could buy my weight in shit.

            Or I could never set foot in a garden store again.

            • Mac1

              Mitre 10, The Warehouse, and two local stores basically sell 6 seedlings for $3 odd. I can also buy a trailer load of horse manure and sawdust for $5, self shovelled, from the local race course. At the moment I am eating leeks, broccoli and cauliflower from these sources along with all sorts of lettuce greens. Broad beans and peas on the way, along with garlic, parsnips and beetroot and a trial of potatoes in drums hopefully supplying 30 kg in November.

              $350 would buy 5000 kms of electricity for the Leaf.

              $350 could also buy two trendy hamburgers, be the discount (!) on two bottles of champagne or be two nights in a motel. I don’t know how far it would go on a holiday in Queenstown skiing.

              • DB Brown

                Yes for those who have a vehicle, and the skills/knowledge. For the unwary newcomer however…

                That price is an affront to me. When I think of those struggling to feed their family, maybe entering a garden store for the first time and hoping to save money.

                Gardening is a lost art. Selling bullshit is a booming business.

                • Mac1

                  Again, things can be cheaper. I met a friend yesterday at Mitre Ten as I bought six plants for $2.79. Seed packets began at $4. He was buying 40 kg bags of some growing medium for $8 each. I can buy plants from my supermarket- not many but some. I can access the garden shops by bus if I have to. Carrying a few plants is not difficult.

                  Remember the point of this discussion is not a rorting price for bags of dung but whether $350 is an insignificant amount or not.

  3. Descendant Of Smith 3

    You missed the ones who subsist on nothing but their partners income. We've built a society that relies on two incomes to survive and completely left this group behind.

    Still when the experts write a report that starts by positing this:

    “Today, we address the most inequitable of the changes made 30 years ago”. It is, according to Robertson, “the righting of a wrong”. But is it correct to claim that the 2021 Budget undoes the 1991 benefit cuts?

    And then erroneously concludes that it does more than posited:

    "So does the 2021 budget directly undo the 1991 benefit cuts? Not exactly. By 2020 benefits had already been returned to similar levels in terms of purchasing power to what they were before the cuts in 1991. The 2021 budget closed what small gap remained and then added some more. "

    Is completely blind to the fact that of course benefit increases matched inflation because one of the changes made was to link benefit rates to inflation i.e. it did what is was designed to actually do – but that it was the cut that occurred in decoupling benefit rates (but not NZS) from the average wage that did the long term damage to benefit rates.

    Grant Roberston did not right the wrongs. To do that he would need to both increase benefit rates back to match NZS, and as WEAG noted get rid of the youth rate from 18-24 and in my view pay compensation to those who have been forced to live off the pittance they have been given.

    If highly qualified academics can't get this right what hope the average person.

    Stephen Hickson is the Director of the Business Taught Masters programme and teaches Economics at the University of Canterbury.


    • Ad 3.1

      Totally agree on the Youth Rate disparity. That's a basic Human Rights wrong.

      While very few employers use it, any employer who still does it these days is cutting their own throat.

      • Descendant Of Smith 3.1.1

        I'm referring to the youth rate for benefits. Was traditionally for under 18 year old's and got extended to 24 as part of Ruth's budget.

        Young people got a triple cut:
        1. $20-00 per week
        2. Reduced to youth rate
        3. Decoupled from average wage increases.

        • Ad

          These are for youth who are not living at home, and not students, and not working?

          • Descendant Of Smith

            No everyone from 20-24 got reduced the the youth rate that previously was only for 18-20. It was just another cut on top of the $20-00 per week for young people that has persisted.

            The living at home and away from home difference came much later. I think when student loans were introduced.

            • Ad

              Sorry I misunderstood the reference to Ruth.

              Anyone who lived through the suffering which she caused has my respect.

  4. Ad 4

    Government support has lifted incomes for Beneficiaries by 40 percent over and above inflation since 2018. The data is all in here.

    FINAL publication version.pdf (beehive.govt.nz)

    Also, usefully, 113,000 people have come off being a beneficiary and into work in the last 12 months.

    The full Wellbeing Indicators report that tracks changes to GINI coefficient and other whole-of-population poverty and inequality measures will be out in a couple of months. That's the Treasury one with the full range of legislated indicators from this government to measure progress.

    • Descendant Of Smith 4.1

      No one is saying they haven't improved things recently but that isn't the same thing as fixing what was done in 1991. WEAG and I both agree on that.

      Using 2018 as the starting point is both selective and disingenuous.

      “Today, we address the most inequitable of the changes made 30 years ago”.

      That is a blatant lie by Grant Roberston. The $20-00 cut was in the end the least of the cuts. One day I'll do the maths and work out the total sum. It is certainly much more than $20-00 per week.

      You can't make a silk purse out of a sow's ear.

      • Ad 4.1.1

        Wouldn't bother about what politicians say if it can be avoided. Even Robertson.

        For the standard response to what the Government has done since 2018 when they started government:

        1. $5.5 billion Families Package increased Family Tax credit, Accommodation Supplement changes, Winter Energy Payment, and Best Start Payment
        2. Indexation of main benefits to average wage growth for the first time in New Zealand’s history
        3. Increased weekly benefit rates three years in a row. Most recently, Budget 21 lifted rates by between $32 and $55 per adult by April 2022, in line with a key recommendation from the Welfare Expert Advisory Group (WEAG)
        4. The largest increase in abatement levels in over two decades\
        5. Further Working for Families increase in April 2022, for Family Tax Credit and Best Start payment rates, and increase the incomes of 346,000 families by an average of $20 a week.
        6. Lifts to the minimum wage by a third, from 2017 $15.75 to $21.20 from 1 April 2022
        7. Permanently increased benefits by $25 per week, doubled the Winter Energy Payment for 2020, and broadened eligibility for the In-Work Tax
        8. Further increase to incomes of 346,000 families by an average of $20 a week from April 2022.
        9. Introduced measures to stop predatory lending that often impact low income families
        10. Expanded school-based health services and making doctors’ visits free for children under 14
        11. Reduced education costs, by removal of NCEA fees, and increased funding so parents of Decile 1-7 schools don’t have to pay school donations
        12. Improved the quality of housing and conditions for renters by implementing the Healthy Homes Guarantee Act 2017 and through changes to the Residential Tenancies Act 1986
        13. Expanded free healthy lunches in schools. 45 million lunches have been served to 211,304 learners in 921 schools and kura
        14. Rolled out free period products for all student across New Zealand. 1,996 schools and kura have provided 343,472 learners with access to products.
        1. Public transport half price and petrol and diesel price increase softened, for about a year.

        I hear plenty of stories about Food Bank demand exploding. Plenty of stats coming out about people homeless in cars also remaining huge. Plenty of need through Salvation Army etc.

        I'd just like to see a bit more clarity about whether poverty really is getting worse despite all the extra help from this government.

        • Descendant Of Smith
          1. Indexation of main benefits to average wage growth for the first time in New Zealand’s history

            That is the lie. Prior to 1991 both benefits and NZS were the same and prior to this, and well prior to Muldoon, both were set and linked to the average wage.

            There was difference in entitlement but no difference in rate.

          • Ad

            I haven't seen the bit of beneficiary history you are referring to – and certainly no expert in the history of Muldoonist benefits.

            In April this year Max Rashbrooke did some useful analysis on how far the latest benefit rises got for beneficiaries, when benchmarked not against wages but against inflation.

            Poorest hit harder by inflation with benefit hikes now linked to average wage | Stuff.co.nz

            Government reacted with further welfare help packages, including the petrol and public transport ones.

            • Descendant Of Smith

              Rashbrook makes this point:

              “The move to index benefits to wages was extremely well-intentioned because, one of the really striking things that has happened to benefits, really since 1991 … is that they have gradually fallen further and further behind the average wage,” Rashbrooke said."

              The problem in simply changing it (back) from now is that it doesn't resolve the inequity that developed from 1991 until now when it was changed.

              While it might be a little complex in theory (average wage vs inflation rate) it is quite simple to understand in practice.

              Benefits and NZS used to be the same rate. The difference in rate is how far they have fallen behind. The minimum correction should be to make the rates the same again.

              I'd argue some compensation should also be paid or at least clear some of the debt incurred over that time.

              • Chris

                When are you saying benefit rates ceased to be the same as NZS? Around 1991? Doesn’t ring a bell, that’s all.

                • Descendant Of Smith

                  Did some more research. I did think it only really diverged from Ruth's 1991 changes.

                  Seems it first diverged in 1977 when New Zealand Superannuation was introduced. Was still linked to average wage movements at that point however e.g. single rate of unemployment was 33.8% of average wage in 1977.

                  In my defence I'd previously looked at 1976 and a couple of years earlier than that as evidence. Should have looked at more years in between.

                  Governments really started to muck around with all this through the 80's onwards.

                  Was reminded to looking at this stuff that married benefits used to all be paid to the husband with the wife often trying to feed family on the family benefit payments alone.

                  And there was this doozy as well.

                  "The Commission may, in its discretion, refuse to grant any benefit or terminate any benefit or reduce any benefit on moral grounds" which used to happen as well from talking to older people way back when.


                  Unemployment rate 20 years and over $13.75
                  NZS Unmarried person $13.75


                  Unemployment rate 20 years and over $28.75
                  NZS Unmarried person $28.75


                  Unemployment rate 20 years and over $36.22
                  NZS Unmarried person $36.22


                  Unemployment rate 20 years and over $38.40
                  NZS Unmarried person $46.10


                  Unemployment rate 20 years and over $44.28
                  NZS Unmarried person $53.28


                  Unemployment rate 20 years and over $48.77
                  NZS Unmarried person $67.52


                  Unemployment rate 20 years and over $143.57
                  NZS (GRI) Unmarried person $172.86


                  Unemployment rate 25 years and over $136.57
                  NZS (National Super) Unmarried person $227.07


                  Unemployment rate 25 years and over $134.69
                  NZS (National Super) Unmarried person $234.14


                  Unemployment rate 25 years and over $147.89
                  NZS (National Super) Unmarried person $212.69

                  Guaranteed Retirement Income

                  "Standard rates are at present somewhat above those for income-tested benefits. The most significant short-term change, begun in 1989, is that rates will be adjusted annually in line with the lesser of the annual movement in the Consumers Price Index or average after-tax wages, until they are aligned with other benefit rates. Until 1989 the after-tax rate of national superannuation for a couple equalled 80 percent of average after-tax wages. This change will also help make the scheme more affordable in the long-term."

                  GRI rates were frozen until 1993.

                  "The current GRI scheme provides $172 a week for a single person and $288 a week for a married couple, these levels have been frozen until 1 April 1993 when increases will be tied to the Consumer Price Index."

                  So little unfair to Ruth she clearly linked both benefit rates and NZS to CPI. Haven't found yet when NZS was relinked to average wage.

                  Taxation e.g. gross and net rates also make these things a little confusing.

                  So in conclusion when benefit rates and NZS

                  33.8% of average wage today ($1289.00 per week) would be $435.62 per week. The over 25 benefit rate is currently $274.37 well below this even allowing for some PAYE to bring up to the gross rate.

                  The equivalent single living alone NZS rate is $538.24 (G) $462.94 (N). Over the 33.8% of average wage.

  5. alwyn 5

    Why stop at 1991? Surely we should go for the whole hog and demand a return to the Rob Muldoon instigated Superannuation system 0f the mid 1970's. Anything less than that is cheating us.

    Under Rob's rule super was set at 80% of the average wage and a single person got 60% of the married couple rate. It was payable from the age of 60. Why demand anything less than what National Party Prime Minister Rob gave us? At a guess that would mean a couple would get about $50k / year and a single person about $30 k. It would be paid from the age of 60. I haven't bothered to check it accurately because it isn't going to happen.

  6. BAW 6

    You do realize that the Labour party is called the Labour party. Not the welfare party.

    Some of those workers might get annoyed having their hard earned cash being paid out to those on welfare.

    • Descendant Of Smith 6.1

      You do realise the Labour Party set up the Welfare System. Of course you do – you are just trolling.

      “The cornerstone of the first Labour government’s welfare programme, the Social Security Act overhauled the pension system and extended benefits for families, invalids and the unemployed.

      Labour won the 1935 election on a platform that every New Zealander had a right to a reasonable standard of living. The community was responsible for ensuring that people were not overwhelmed by circumstances against which they could not protect themselves. Labour’s ultimate response to the Depression was the Social Security Act.”

      Besides it the well-off not paying tax to fund it that workers should be annoyed at – you have mis-directed their anger. There but for the grace of god – or the whims of a capitalist go any of them.


    • Ad 6.2

      Agreed New Zealanders generally very much resent beneficiaries … until at 65 they become one. At which point they are not beneficiaries but nationbuilding heroes of course.

      As Labour member I am quite happy to see my tax go to beneficiaries. They need all the help that salary earners can give.

      • Sabine 6.2.1

        See i like to dispute that.

        Firstly all benefits generally are paid by all, and accessible to all. Thus they are a pre-paid service.

        All people who pay taxes in NZ pay into the different boxes of government, healthcare, acc, super, unemployemnt etc. To make this easier i think it was all bundled into 'income' taxes but again, these services are pre-paid.

        I think were resentment comes from is by allowing people to stay on a benefit for longer then some may think they should stay on, whilst we subject others to government sponsored harrasment by forcing them to prove over and over that they are still blind, dying of cancer, quadripledic or a single parent for that matter.

        The reason we should all be happy to pay taxes into these systems is that we all benefit from it. You might want to feel all social and generous, in fact however you are the first to benefit from this system should ill health or unemployment come knocking at your door.

        And recipients of Super are retired people, not beneficiaries. Maybe that is something that needs to gain some traction within the Labour Left.

        Retired people – most of whom have worked all their lifes, paid taxes, some of these taxes are now refudend via their super.

        Unemployed – who have worked long enough to actually qualify for Unemployment money. They too prepaid that service via the taxes they paid.

        Benefits for people who are permanently unable to work – this would be a 'beneficiary' but keep in mind that what ever pennies they receive these pennies are taxed, they pay GST on each and every transaction and thus are Entitled to this benefit.

        Single Parent Benefit – see above, not ble to work for child care reason, pay taxes on their pennies, pay GST on their pennies ……

        Every single 'benefit' is earned by way of paying taxes and people are thus entitled to this benefit.

        And frankly i have yet to meet one person in NZ that 'very much ' recents beneficiaries. They don't like the system, they don't understand how benefits are allocated.

        A small story. One day i take my then husband to Winz. I had a job, but sadly one income was not enough to make ends meet, and my hubby a self employed person att did not have a great income. So we go there, papers in hand and explain the situation to a lady at Winz. She is like – nah, can't do anything, you make enough money and besides could you get a second job – btw, she was talking about me. My hubby the artist at this stage was still ignored by her. Eventually she asks about him and goes….oh youse n artist, me too….lol. You know how i got that Accom? I stood up, looked at her and told her that she could take him home and keep him, feed him, house him, wash his clothes, and so on and so forth. I stood there and repeated three times I divorce you , I divorce you, I divorce you. Looked at her and told her that he was hers and left.

        Standing outside, shaking like a leaf, in tears. He comes out not even 10 min later with the Accom benefit in his name. He is still on that benefit 15 years later, long after i moved out.

        Go figure.

        We don't resent beneficiaries, we resent Winz, its Drones, Carmel Sepuloni/Paula Bennet which are the same pair of shoes just on a different person, and the randomness in which benefits are distributed, in the manner people are treated and how some seemingly can abuse the system whilst others get told to get a second job.

        • Belladonna

          I, too, have horror stories of WINZ, when I was a solo-Mum.

          The petty abuse of power by the staff was appalling.

          Not to mention the fact that they were, frequently, ignorant about the policies they were supposed to be implementing, and the resources which they were supposed to be offering to beneficiaries.

    • Chris 6.3

      Yes, that's why unions are so fucked up.

  7. Descendant Of Smith 7

    It's obvious why 1991 – Grant Roberston was directly referring to correcting those cuts. But you know that.

    Currently a couple on NZS get $42,500 per year.
    A single person $27,000.

    A couple on benefit gets $31,408
    A 20-24 year old on benefit gets $16,100.

    These are gross rates and you then need to consider on top of that NZS benefited from tax cuts while those on benefit did not. Benefits simply have the net rate remain the same when tax cuts are given and less PAYE paid to IRD i.e. the gross amount is reduced.

    That in effect has been a further cut.

    Neither the NZS amounts are that far away from your figures. NZS remained linked to the average wage since 1991. Both benefits and NZS were the same prior to that budget.

    Couples get 72.5% of the average wage, Single people get 65% or 60% depending on whether living alone or with someone else. Pretty much what Muldoon proposed.
    "It isn't going to happen" is pretty much what actually happened.

    (I don't think it was ever set at 80% for a couple in the end – it was just what was proposed but I could be wrong on that.) Muldoon's legacy continues for some.

  8. SPC 8

    It's to help low income workers pre the next MW increase/any wage increases/increases in the WFF tax credits to cope with rising costs.

    • weka 8.1

      Do you consider $60,000 – $70,000 to be low income?

    • Descendant Of Smith 8.2

      Not all low income families have children.

      A couple earning $48,000 on one income would have no benefit entitlement and would be living off $24,000 gross each which is less than NZS but would be taxed more than a couple on NZS because it is earned by one person.

      • SPC 8.2.1

        Sure, but they usually bump the AS along with the WFF tax credits.

        They have held off increases to both for fear of the money going into landlord pockets (they would prefer to wait for a market correction).

  9. Sabine 9

    Because the Labour Party needs poor people to vote of them. Without people in abject poverty for ever who would vote for these guys? Seriously.

    All those that want to congratulate Labour for increasing the main benefits, all that means is that the same person who made 5 bucks more on their main benefit will lose at the very least 5 bucks on a fringe benefit, resulting in feel good news to the suits in parliament at least for one news cycle, but nothing material for the beneficiary.

    Never mind all the people that don't get anything, despite having paid taxes and losing a job, because their partner makes 0.50 more then the threshold. Do we actually know how many are denied the right to unemployment money / other benefits because of their relationship status? Do we care?

    But Labour gave this 350$ to workers cause frankly they are losing workers. One after the other, trickle trickle trickle and soon enough there are not enough voters. Doh!. And this 350 $ would be about the same amount – anually – the empty suits from N would offer in tax cuts to the lower income class.

    Please keep in mind that these 350$ will be subject to income tax, in the same sense as the aid package this February – 4400 for businesses + one fulltime worker was immediately subject to GST on the full amount, then income tax on the 400 for he full time worker, and then income tax on what ever was left over from that glorified 4400.

    They give with a balled fist and take with two open hands. If anyone hopes for L to change spots they need a new pet.

  10. pat 10

    It is inevitable that in the throes of a labour shortage incentives to add labour will increase….even from a party that has disowned its roots.

  11. gsays 11

    When I read the title to this post, the answer that came to my mind was that it is in Labour's DNA.

    Not the Labour party that John A Lee knew that increased pensions, built social housing, made us proud of a social safety net and a welfare state.

    The modern one that ushered in Rogernomics and despite the harm it has done over the decades, done nothing to undo it.

    I was heartened to see links to The Greens and Te Pati Maori, Two non neo-liberal options come election time.

  12. Christopher Randal 12

    I cannot vote Greens, but my Labour vote can go to Te Pati Maori….

  13. Belladonna 13

    Mmmm. I heard Ardern justifying this on NatRad as being the equivalent of the winter energy payment, which beneficiaries are already getting.

    And thought it was a bit of clever dancing around the issue. The winter energy payment is meant to be for 'winter' power-bills, fuel, etc. (which increase every winter) *not* for the sharp rise in the cost of living in 2022 – which we are all experiencing.

    I don't think that beneficiaries are 'magically' exempt from the general increase in prices (though they may not be able to afford fruit and veg – so be immune to the sharp rise there /sarc/)

    General prices for everything (except public transport) have gone up significantly this year – which is *why* the Govt is 'giving' the $350 cash-in-bank-account. Those costs fall on beneficiaries to the same (or greater) extent as on the rest of the population earning under 70K.

    Excluding them seems to me to either be a sop to the bene-bashers – or a way of limiting the cost (by excluding both OAP and beneficiaries).

    I've yet to hear a good justification from Labour.

    • SPC 13.1

      There are two

      1 the real increase in benefits made in April 2022

      2. there will be compensation for CPI increases in April 2023 (not all wage earners will get the same).

  14. Mike the Lefty 14

    There would have been no cost of living payment under National.

    Everyone would have had a tax cut which would have put many more dollars into the pockets of the rich, and bugger all for the poor.

    So the COL payment was better for the poor, but I agree it should have not made any difference whether they were already getting a winter heating allowance.

  15. Peter Bradley 15

    Fundamentally necessary to demonstrate cruelty to beneficiaries in order to win an election in NZ. Working and middle class voters love it when politicians pick on beneficiaries – it just turns them on big time.

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