Increases to benefits were a big headline in the 2021 Budget, but will it make an impact on existing inequalities in Aotearoa?
The Labour majority government will lift all benefit rates by between $32 and $55 in line with recommendations by the Welfare Expert Advisory Group.
All main benefits will jump by $20 a week from 1 July, with the remainder to come by April 2022.
Photo: RNZ / Dom Thomas
Max Rashbrooke is the editor of 'Inequality: A New Zealand Crisis' and an expert on wage inequality and the pay gap.
He is also a senior associate at the Institute for Governance and Policy Studies, Victoria University of Wellington.
The changes announced yesterday were a good first step, he told Jesse Mulligan.
“If you add up everything that Labour’s done on benefits over the last few years, someone who is on the unemployment benefit is probably about $80 to $90 a week better off.”
That leaves a small amount of money, Rashbrooke says.
“You are still having to get by on $315 a week which isn’t enough to get by on, you can’t live in dignity on that amount, but the changes that they are introducing are really good steps in the right direction.”
The government has made a big play of listening to the Welfare Expert Advisory Group, he says.
“What they didn’t do anything on yesterday was Working for Families because the other thing the Welfare Advisory Group said in 2019 was you also need huge increases in Working for Families.
“Some of those people are on hundreds of dollars a week less than they need for a life of dignity, so the government didn’t do anything on that although they said they will in the future.”
He believes the government is starting to make good on the idea of ‘radical incrementalism’.
“There was lots of incrementalism but no evidence there was any kind if transformative radical goal at the end.
“What we saw yesterday was finally a bit of a proof of concept, because they have spent all this time building up trust with middle New Zealand.
“Making people feel comfortable with the pace of change, public opinion has finally swung round in favour of increasing benefits. So, they are reaping the benefits of having trod very cautiously. And they are now very cleverly making these changes increasing these benefits by about as much as they think the public will tolerate.”
This is clever politics, he says.
“It is all about them doing as much as they think they can get away with but trying to warm the country up gradually so it becomes more accepting of each new step.”
With unemployment so low is the benefit now a disincentive to work? Rashbrooke doubts it.
“Benefits are about providing people with dignity when they are living in tough times … they are entitled to lead a minimally decent life on the benefit.
Even with these changes, the Job Seeker benefit is $315 a week, I struggle to think of that as an incentive, it is a very small amount of money. I would challenge people in the National Party to live on $315 a week and they would quickly find that it is still pretty miserable.”
