News

No justification for Government delay on benefit increases

Child Poverty Action Group says the Minister of Social Development Minister should give a full explanation of why benefit levels were not raised immediately following the 2015 Budget.

Child Poverty Action Group says the Minister of Social Development Minister should give a full explanation of why benefit levels were not raised immediately following the 2015 Budget.

Radio New Zealand reported on Saturday 25 July that the Government considered increasing benefit payments immediately but decided against it.

"Mrs Tolley was asked at the [National Party] conference why the Government was waiting until next April before increasing the benefit for beneficiary families by $25 a week.

She said the Government had considered increasing the payment immediately on Budget night, but decided against it so that people would be able to make submissions to the select committee on the changes to the work obligations for sole parents."

In June this year the OECD reported in the Economic Survey of New Zealand 2015 that benefits had fallen far too far behind and should be raised and then linked to median wages.

“Increasing main (basic) benefits and indexing them to median wages would reduce poverty across all beneficiary classes, including single-person households (below age 65), who have the second-highest relative risk of poverty.”( OECD, p 39) 

CPAG argued that the budget changes were inadequate and selective. Nevertheless $25 for some is better than nothing. 

Spokesperson Associate Professor Susan St John said, “Advice provided by the Prime Minister’s department for Budget 2015 showed that families reliant on a benefit did not have enough income to meet their basic costs. The delay in delivering the increase is completely unjustified and shows the Government is out of touch with the urgent needs of beneficiaries. 

Children have been made to wait and families will forgo around $1,000 much needed extra income just to allow for submissions on new work obligations.  Susan St John said, “Submissions on work obligations could still have occurred later this year even if benefits were increased immediately: they are unrelated issues. Or is the Minister suggesting that benefit increases are conditional on getting the new work obligations passed into legislation?”