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

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:

work is overwhelmingly the best and only way to reduce poverty, so the focus is on waged people and job creation
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: