21 May 2021

Budget 2021: BusinessNZ supports welfare increases which 'could have been more'

9:29 am on 21 May 2021

The government's welfare increases could have been bigger and they will help businesses, a business leader says.

Business NZ CEO Kirk Hope

BusinessNZ chief executive Kirk Hope says the benefit increase will benefit businesses by putting money back into the economy. Photo: RNZ/ Dan Cook

Finance Minister Grant Robertson described the bump of $30 to $50-a-week for main benefits - as once in a generation increases.

BusinessNZ chief executive Kirk Hope supported the welfare increases but said the government could have given more.

"If you think about the impact on the business community by way of lost productivity where communities live in poverty - it's massive ... we would say it's a substantial shift, but you could always help your more vulnerable communities more," he told Morning Report.

Hope said the benefit increase was the equivalent of a tax cut which would go directly back into the economy which would benefit businesses.

Child Poverty Action Group researcher Janet McAllister told Morning Report the benefit increase announced in the Budget was not enough and would not sufficiently address child poverty.

"Incomes remain unliveable and there are still substantial shortfalls even though the gap has shrunk."

McAllister said the government was making children wait and "there is nothing for children in disabled households even though they are more likely to be in material hardship".

"The strongest ray of hope though is for couple families, so their increase is higher than it is for sole parent families, and it should be, they've been the worst supported by the system until now - to the point where we know of couples who've separated because they can't afford to be together."

McAllister said it was a good first step "to getting the state out of our bedrooms".

Budget should have signalled 'future economic growth path'

Hope said the Budget was "not too bad" despite the fact it did not directly give a lot to businesses.

"Bear in mind through the wage subsidy scheme and through some of the Covid support, there were already quite a few cash-flow support mechanisms in place which businesses had taken advantage of."

Hope said the Budget did allocate about $40 million for digitisation, which would help businesses become more efficient and productive, particularly small and medium-sized businesses.

But he said there was not enough economic signalling to businesses about the future economic growth path.

There was a big increase to the capital budget which was useful because it was work that would be done by businesses on existing building stock, he said.

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