Freezing Benefits Penalises the Poor – Closing the Gaps

“No increase for most benefits because of a supposed -0.25% rate of inflation is just a gimmick by the Government to keep the poorest people poor,” according to “Closing the Gap” Income Equality Aotearoa New Zealand Inc National Secretary Peter Malcolm.

The Minister of Social Development, Anne Tolley, has said that benefit rates will be maintained this year despite a fall in the CPI.

“This makes it sound like a magnanimous gesture by the government,” says Malcolm

“But long term invalids, those on benefits because they are sick, those on the disability allowance, and the unemployed can’t afford to spend money on things used to calculate inflation.

“Overseas holidays packages, international airfares, newly built house prices, hybrid electric cars, new TVs, property valuation services, burglar alarms and monitoring, house cleaning services, heat pumps and frozen prawns are things that beneficiaries can’t contemplate on their budgets.

“Yet many of these that have come down in price, are used to offset the much increased prices of power, rates or rents, and food that beneficiaries have to pay!” said Mr Malcolm.

“To freeze their benefits is simply a way of perpetuating the inequalities in our society and ensuring those at the bottom will always be the poorest of the poor.

“And what’s worse is that freezing these benefits this year follows pitiful increases last year.”

From 1 April 2015, the invalid pension (now called “supported living”) increased by only $1.33 for a single person and $2.22 for a couple. The sickness benefit (now combined with the unemployment benefit and called “Job Seeker”) rose by only $1.07 for a single person and $1.78 for a couple. The Disability Allowance rose by only 31 cents.

“So these are now the only compensation over two years that the poor gets to help the astronomical increases in their absolutely basic living costs,” Mr Malcolm said.

“I challenge Minister Tolley or any of her colleagues to live on these inadequate benefits. She would get a shock to see how these beneficiaries have to live.”

“The Government again makes it sound as if they are helping these people with their $25 increase from 1 April this year.

“But this is only for people with children living at home. Inadequate as it is in addressing child poverty, these families at least get other support for having children with them,” Mr Malcolm said.

“But those who are the poorest of our poor are left even worse off, with their benefits frozen and pathetic increases last year that do nothing to cover their increased costs over two years.”

The Governments argument is apparently “keeping these benefits low will encourage people to get off them”. Research shows that in general this is nonsense.

“This Government should be ashamed of the inequalities they are creating and the sort of New Zealand that will result in our future,” Mr Malcolm said.