Government Response to Lockdown Poverty “Inadequate” and “Sluggish”

Child Poverty Action Group is deeply concerned the Minister of Finance this week refused to signal what, if any, desperately-needed emergency income relief is on its way to vast numbers of low-income families playing their part in lockdown.

"The Government keeps saying ‘watch this space’ but no lockdown-related income entitlement is forthcoming," said CPAG spokesperson Janet McAllister. "In the meantime, families are facing unexpected and mounting lockdown bills: high power and internet usage to connect with loved ones and keep kids engaged with school, as well as high grocery prices and the loss of school food programmes."

In Parliament yesterday, in response to a question about hardship assistance from James Shaw, Minister Grant Robertson admitted the lockdown is "a crisis situation" and said the Government is "constantly monitoring the impact of COVID-19 on different groups" including "reassessing the adequacy" of current support and "where we need to, to take further action".

But McAllister says "It was already clear last week from foodbank demand that current responses are inadequate, both for families on fixed low incomes, and those whose low incomes have reduced. The Minister admitted MSD is getting higher-than-normal call numbers. Families needed increased income entitlements from the moment lockdown hit."

MSD data shows hardship grants increased by 50% in one week, from 27,700 to over 41,000.

"That will be the tip of the iceberg and now lockdown is extended, it’s only going to get worse. Wage subsidies were introduced immediately - but there’s been no income support increase for most of the country’s poorest families, and we’re already more than two weeks into this crisis," says McAllister.

McAllister says the Government "sluggish" response this lockdown compares unfavourably with their response last year. "In March last year, the Government quickly announced lockdown-related income entitlement increases, and doubled the Winter Energy Payment. They have not done so this year. This year's more inadequate response is a slap in the face to those doing it tough - our research shows last year was a hard year for families, and they went into this lockdown with fewer resources than they had before the pandemic hit."

Benefit increases announced as part of Budget 2021 will not be fully introduced until well into next year. CPAG modelling indicates just before lockdown, benefit entitlements were leaving many families around $100 or more a week below key poverty lines, unless they had discretionary support. "Even before lockdown, many families were crowding to try and make up that massive shortfall, going into debt and trying to access hardship assistance," says McAllister.

An additional 22,000 children were in benefit-receiving families in June this year, compared to the start of the first lockdown, an increase of 12%.

"Families who lose all their paid work also lose one of the key Working For Families support payments, which is a double blow," says McAllister.

CPAG recommends the Government immediately bring forward the promised benefit increases and the Working For Families review to alleviate some of the desperate need. "It won’t be enough but it will be something. Families need more today. Families in mounting distress can’t live on promises of ‘next year’. Children are hurting now, and the longer their need is left, the worse the consequences will be for everyone."