More than 60 percent of single parent families were reducing spending on fruit and vegetables to save money. File photo. Photo: RNZ
A new report from the Ministry of Social Development details how the cost-of-living crunch has hit households in recent years.
It has released an updated social cohesion report, which notes the rising cost of living has affected communities around the world and in New Zealand.
Economic changes could have lasting effects on economic security for families and could perpetuate disadvantages and inequalities, it said.
It said two in five New Zealanders reported that they did not have adequate incomes.
While income adequacy trends improved between 2018 and 2021, they had declined again since, the report said.
"The most notable rise occurred among Pacific peoples, with the percentage reporting they had enough or more than enough money to meet daily needs increasing from 28.2 percent in 2018 to 49.3 percent in 2021, then dropping slightly to 46.4 percent in 2023.
"In comparison, the increase for Māori was more modest, rising from 50.3 percent in 2018 to 55.2 percent in 2021, and then slightly decreasing to 53.9 percent in 2023."
For people of European ethnicity, the decline was from 73.2 percent adequacy in 2021 to 66 percent in 2023.
Asian individuals also had a decline, from 55.7 percent to 51 percent.
Only 44.2 percent of disabled people reported having enough or more than enough income to meet everyday needs in 2023 - a significant drop from 61.7 percent of the disabled population in 2021.
The report covered the ways that people were trying to save money.
The number who were cutting back on fresh fruit and vegetables had increased from 23.3 percent in 2018 to 47.7 percent in 2023.
Two-thirds of Pacific people reported they were doing this in 2023, as well as 55 percent of Maori and 59.3 percent of Asian people.
More than 60 percent of single parent families were reducing spending on fruit and vegetables to save money.
In 2023, food price inflation was at its peak but while prices have stopped rising as fast since then, they have not substantially declined.
Simplicity chief economist Shamubeel Eaqub said data indicated that this was probably still happening.
Eaqub, who also authored a social cohesion report recently, found a quarter of people went hungry sometimes or often because of a lack of money
"The big thing I found in the social cohesion work was that the biggest division was due to poverty/inequality. This is both short-term, worsened by the recession, and long-term."
He said but things had got a lot tougher for poorer households.
"It's been the expansion from, you know, the people on welfare plus the working poor plus the elderly poor.
"The usual things, the cost of housing, cost of necessities, they've all gone up relative to very constrained incomes.
"In the provinces it used to be that you made do without some material things, but there was enough community and other things to get by,
"But think about what's happened with the housing crisis in the last decade. It's infected the provinces too.
"It's gone from housing used to be cheap so you could kind of afford other things... it's no longer true. It's become harder to escape. I think before you could escape to places where some of the cost of necessities were less, even if there were fewer employment opportunities and income prospects were modest. You could still get a decent life, but it's just getting harder for those people on relatively low incomes."
He said it was bad for New Zealand as a whole.
"Poverty can be bad for the person but it also leads to issues in society. I think that's the bit that quite often gets missed... Rich people think I'm sorted, so everything is fine.
"It turns out you should care because when you've got lots of poverty and lots of inequality in society, you also tend to see lots of social problems and all those other bits and pieces that go with it."
Just under 30 percent of New Zealanders said they had put off or postponed visits to the doctor because of financial considerations, up from 25 percent in 2018 and 13.5 percent in 2014.
Jake Lilley, spokesperson for financial mentor network Fincap, said many mentors reported that clients were running a budget deficit when they included unexpected costs like medical appointments.
"There is very likely a trade-off people are making between going to the doctor or paying a demanding debt collector, just as they are deciding whether to eat or heat.
"None of these consequences of financial stress are helping people's long term health and the related strain on our health system. The mental health strain from financial stress won't be helping either and we need to have policy settings that help people avoid or find a pathway out of difficult debt."
Green Party co-leader Marama Davidson described the data as "bleak" and said it showed deep wealth inequality that had left some people unable to afford the basics of a decent life, "and feeling less and less trust in the system to actually care for and represent them".
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