Still Smarting from that Not-Too-Long-Ago Budget

By Renee Manella

With all the tools in our kit to finally revamp our failing social support system, the 2019 Wellbeing Budget could have been transformational for children in poverty. Instead, Budget announcements were like a game show where the contestants frantically grab at a flurry of cash shot out by a blower inside a glass cubicle, before the timer goes off. There’s always a winner, and this year we saw mental health get its much-needed boost. That funding boost represents an important shift in our approach to wellbeing, and is a political response to a very strong community-based call to action. Where is the political response in this budget to the call for action on child poverty?

Coming into Budget 2019, Government had the legislative power (the Child Poverty Reduction Act), the political mandate (the Bill sailed through with both major parties supporting it), the economic framework (because alleviating poverty positively impacts on every area of wellbeing), the policy blueprint (the recommendations of the Welfare Expert Advisory Group) and even the funds to rebuild our social support system and finally lift families out of entrenched cycles of deprivation. 

So why didn’t it happen? It’s true there are other priorities to consider, and we must always carefully balance spending in health, education, housing, infrastructure, and so on. But if we rebuild our income support system, we can start to address economic inequities and head off entrenched poverty at the pass. We need to treat the cause, not just the symptoms.

We’re supposed to be making New Zealand the best place in the world to be a child, but this Budget’s spending in the name of reducing child poverty isn’t going to transform the lives of kids whose caregivers are struggling to make ends meet. From next year onwards, people receiving income support will be able to keep a bit more of what they earn. And I do mean a bit. It’ll take four years until they can earn about $25 more a week before benefits are cut. Also, Work and Income benefits (like Jobseeker Support) will be indexed to average wages. Then I found out that NZ Super has always been indexed to wages. We have to put this change into perspective, too. Working for Families and the Accommodation Supplement haven’t been indexed, and these payments can make up more than half of a family’s income support. 

Another other Budget announcement tagged with child poverty reduction was funding schools to take the pressure off parents paying school “donations”. There will be flow-on effects from spending in housing and health, too. All very helpful, valuable stuff, and I really don’t want to downplay those changes or the intention behind them. I do have a question, though. Last year the Government asked the Welfare Expert Advisory Group (WEAG) to figure out what we should do to make sure people have enough to get by on. So we know for sure now that we need to significantly raise main benefits, make Working for Families fairer, and let working people on income support keep more of what they earn. 

We really could’ve loaded this budget’s blower with more cash. Last year's operating surplus was $5.5 billion, more than enough to put all of the WEAG’s recommendations in place. Instead, Finance Minister Grant Robertson told us they’d decided to put that money aside for a rainy day. That’s fantastic rationale for teaching kids to save their their pocket money, but the analogy between sovereign funds and kids piggy banks gets thin very quickly. I’m not convinced we should even have a surplus, considering Labour’s promise to have a surplus only once their policy objectives have been met. And yet, here we are, with 174,000 children at the lowest level of poverty. We could do so much more. We could raise benefits and let people receiving them keep more of what they earn. We could rebuild a support system with fairness, justice, dignity, and compassion. So far, not much has changed for the kids living in poverty, and it’s a rainy day for them, Mr Robertson. We have to do better than this.