31 Mar 2022

Prime Minister Jacinda Ardern underlines income and support measures

2:14 pm on 31 March 2022

Jacinda Ardern has marked a range of living cost measures outlined in last year's Budget - some of which are set to come into effect tomorrow.

Watch Jacinda Ardern speaking at Nuanua Kindergarten here:

Ardern says it includes increasing the family tax credit benefiting about 60 percent of its recipients, an across the board increase to benefit rates and increases in support for superannuitants.

Ardern says the government has increased abatement thresholds, but the benefit increases coming in tomorrow are the biggest in decades.

Sepuloni says the government is reviewing family tax credits to see what more can be done.

On supermarket duopoly, Ardern says the government is still the recommendations from the Commerce Commission about what can be done to ensure New Zealanders are paying a fair price for food in New Zealand.

With Labour blocking various officials from appearing before select committees, Ardern says the party is "absolutely not" abusing its majority.

She says the government has already signalled the family tax credit review is a longer piece of work, and the government will also review the changes it has made to see if there are any unforeseen impacts or further gaps.

"What we won't do is what the opposition has proposed which is a tax cut for people who are on $180,000 a year or more."

Sepuloni says it's not just about benefit increases, and the government is looking at more of the Welfare Expert Advisory Group's recommendations on what else it can do. Some other actions the government has taken include lifting sanctions on accessing benefits for women, she says.

Ardern says it is with extreme sadness that she learned of the death of Moana Jackson.

She says he "will have left a mark on an entire generation and beyond".

"His work was incredibly significant ... ultimately realising his legacy will come down to all of us - all of us - realising that we can do things differently in New Zealand."

In a statement earlier, Minister for Social Development and Employment Carmel Sepuloni said these increases would help address costs for whānau doing it tough in the pandemic and winter months.

"These increases underline our determination to reduce inequality, and are a step towards addressing child poverty," Sepuloni said.

Ministry of Social Development estimates compared to 2017 policy settings:

  • 364,000 beneficiaries will be better off by on average $109 per week, increasing to $133 per week during the 2022 winter period.
  • 109,000 beneficiaries with children will be better off by on average $175 per week, increasing to $207 per week during the 2022 winter period.
  • 255,000 beneficiaries without children are estimated to be better off by on average $81 per week, increasing to $101 per week during the 2022 winter period.

In February, the government confirmed the minimum wage would increase by $1.20, bringing it to $21.20 per hour, starting from tomorrow.

In a statement, Minister for Workplace Relations and Safety Michael Wood said the increase to the minimum wage would benefit about 300,000 workers.

"For someone working a 40-hour week on the minimum wage, this increase will see them earning an extra $48 a week, and almost $2500 more each year," Wood said.

From 1 May, a million New Zealanders will start receiving the winter energy payment, which is expected to put an extra $700 into people's pockets during the colder months.

Half-priced public transport also starts from tomorrow for three months.

But anti-poverty campaigners have said the benefit increases would still leave families trapped in poverty as the cost of living skyrockets.

Inflation hit its highest level in 30 years, with an annual rate of 5.9 percent for 2021 and an increase of 1.4 percent in the three months ended December.

"The whole world is dealing with inflation as a result of Covid costs, supply chain issues and the war in Ukraine. Kiwi households are feeling the effects too which is why we've taken swift action that will make a difference for families right now," Ardern said.

The government was also committed to getting to the sources of financial stress for people, including the lack of competition in supermarkets, she said.

"Tomorrow's improvements are on top of help we've already provided to families like 45 million free lunches in schools, free GP visits free for children aged 13 and younger, removing donations at over 90 percent of schools and increasing paid parental leave to six months."

Govt 'playing catch up'

National Party leader Christopher Luxon said the changes would barely cover the rising cost of living and the government was simply "playing catch up".

"Labour is giving with one hand and taking with the other. Increases in benefits and minimum wage will be quickly eaten away by the rising cost of living.

"At the same time, they are planning to squeeze motorists further with increases to petrol costs from its biofuels mandate."

The party was calling on Labour to adjust tax brackets for inflation at the upcoming Budget, he said.

"Inflation is pushing more Kiwis into higher tax brackets and Labour is taking more money out of people's pockets at a time when there is a cost of living crisis."