WelCom News
A newspaper for the Wellington and Palmerston North Catholic Dioceses

Poorest miss out in ‘big-spending’ budget

New Zealand’s poorest citizens continue to miss out in the government’s ninth budget, according to Caritas Aotearoa New Zealand.
The director of the Catholic social justice agency, Michael Smith, said Caritas is judging this year’s budget in terms of outcomes for New Zealand’s poorest citizens —those living on benefits. The failure to pass on tax reductions for the lowest tax bracket to beneficiaries is particularly cruel.
‘We understand this to mean gross rates will be revised so that beneficiaries receive the same amount in the hand after October 1 as before.’
Caritas made a written submission to the Finance and Expenditure Select Committee in January supporting the government’s four tests for tax cuts but asking that the government ensure tax cuts would not lead to greater inequalities in society.
‘We told the government that this would be very difficult to achieve if personal tax cuts were not passed on to beneficiaries.’
Caritas accepts that there is a need to address the household incomes of all families.
‘Increasing prices for food, fuel, housing and energy costs – all essential items – are biting into the living standards of even middle and high-income households.
‘However, if these groups are finding it a struggle to manage, it needs to be recognised that for families whose income levels were already deemed precarious by the Ministry of Social Development, the hardship is even more intense.’
Mr Smith said although beneficiary families will receive some additional support from the increase in the Family Tax Credit component of Working for Families, those families who meet the criteria for the In Work Tax Credit will continue to be better off.
‘The government is still discriminating against children on the basis of their parents’ employment status.’
In preparation for Social Justice Week in September, Caritas staff have been speaking to low-income families and Catholic organisations that work with people in need.
‘We have heard many stories of the ongoing hardship being experienced by New Zealand’s poorest families, especially in meeting basic needs such as healthy food, and adequate housing.’
The recently released Ministry of Social Development report Pockets of Significant Hardship and Poverty briefed the government last June that beneficiary family income had fallen to half of the 60 percent poverty line recommended by church agencies.
‘The 2008 Budget does nothing to address benefit levels to deal with this basic issue,’ said Mr Smith.
Catholic social teaching judges public policies and economic decisions by the effect they have on the poorest and most vulnerable members of our society. Mr Smith said Caritas had originally welcomed Working for Families in 2004 as the first major attempt to address family incomes in decades.
‘But after five years of asking the government politely to address the needs of beneficiary families, our patience has worn out. In a budget already labelled by commentators as a ‘big spend’ budget, the most needy members of our community have once again missed out.’
For more information contact Martin de Jong 04 496 1742 or 021-909 688. martin@caritas.org.nz