31 Mar 2023

Increase to benefits, subsidies and minimum wage widely welcomed

From Checkpoint, 5:50 pm on 31 March 2023

Benefits, subsidies, and wages are all set for a shake-up as a new financial year kicks off on Saturday.

Young families, seniors, and students are among those who will see more in their pockets. Meanwhile, the minimum wage rises by another $1.50.

On Friday, Prime Minister Chris Hipkins made the rounds of two of the groups most affected by the changes: Young families and seniors.

He started the day at Papakura's Happy Turtle Childcare Centre, reading the classic picture book We're Going On A Bear Hunt to an absorbed crowd of kids.

Parents had their own information to absorb, with changes to income thresholds meaning more than half of New Zealand's families with kids would now be eligible for subsidised childcare.

That equated to about 10,000 more children covered by either the Childcare Subsidy for pre-schoolers or the OSCAR Subsidy for school-aged children.

"We know what a difference being able to access quality childcare makes to a family," Hipkins said.

"It makes a difference in terms of their ability to go out and participate in the labour market and earn some extra money, which again really helps families, but it also makes a big difference to the children because they get the amazing experience of being in centres like this where they can interact with other children, and can learn and grow."

The government was also boosting the eldest child rate of the Family Tax Credit by $9, lifting it to $136 per week.

Best Start Payments, helping parents with the costs of a new-born, were set to increase by $4.

Families on a benefit with children would receive an extra $41 a week, with sole parents getting an extra $32.

For mum Megan Williams, the news was well-received.

"At one stage I had two children under five at day-care so it was a lot of money - something like $640 a fortnight, which is a massive amount of money to be taking out.

"Any sort of support for families at this time is really important; there's a lot of hurting families out there."

Avni Kher, mother of a one-year-old, said raising kids required help.

"With grocery prices becoming really troublesome - look at the price of garlic - it's really not good for families [wanting] to have a good economic environment. I think we need that kind of support right now."

At Hipkins' next stop, the Manurewa RSA, he spoke to seniors and veterans who would get a boost to their superannuation.

From Saturday, a couple over the age of 65 will receive more than $100 extra a fortnight, while a single person will get $67.

Royal New Zealand RSA president Sir Buck Shelford said many older Kiwis were in need of this assistance.

"It's pretty tough times for a lot of people. Interest rates keep going up... So for people with big mortgages - and I've got big mortgages - we've got to find the cash to pay the bills."

RSA member Geoff Dixon said the money would come in handy.

"Any help, particularly to the elderly people - and I'm a young buck, I suppose - but to the elderly people who are finding it difficult, those with large families, anything is a help, and I'm grateful."

New Zealand's lowest earners were also set to get a  boost, with the minimum wage increasing by $1.50 to $22.70 an hour.

Not everyone was happy with the news, with Business NZ calling the 6 percent increase "a slap in the face for struggling businesses".

Hipkins acknowledged these concerns, but said they were a necessary challenge to overcome.

"For the small business community in particular, the minimum wage can put an extra cost on them and extra pressure on them.

"But in my conversations with small business owners, they also want to make sure they're doing the right thing by their staff - they want their staff to benefit from their hard work too."

Under the current Labour government, the minimum wage had been reviewed every year - a track record Hipkins was proud of.

And despite global economic uncertainty, he was confident the government would be able to take care of its people.

"Many banks, many economists are forecasting the potential for global recessionary conditions.

"We'll be doing everything we can to support New Zealanders through that."

A $20 boost to the student allowance and student loan living cost payments would also come into effect on Saturday.