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  • Writer's pictureCarol Barron

A No Frills Budget

The irony of the appropriately labelled “No Frills Budget” was not lost on me. People whose income comes from welfare, know exactly what a no frills budget means. It means that you don’t really have enough income to meet the living costs for your whānau. A no frills budget means that you have to decide between whether to spend your very limited income on the rent, or power, or food. A no frills budget means you have to go without things that you need - you may not be able to afford to go to the doctor, or the dentist, or to have a heater on during winter, or buy new shoes or clothes for your tamariki when they need them.

Since the Welfare Expert Advisory Group released their report in 2019, everyone has known that our welfare system was no longer fit for purpose and needs fundamental change. Since then, the impact of Covid and increased cost of living has resulted in a widening gap between what benefit recipients receive and what they need to live with dignity. ActionStation’s Fairer Futures research in 2022 showed that 12 of the 13 households modelled would not be able to meet their total living costs.[1]

The Lifting the Weight Report[2] shed light on the impacts of debt owed to government. The average debt owed by the almost one in ten people in Aotearoa was $3,550[3] and makes life on a benefit even harder.

There are good things from the no frills budget in 2023 which include:

  • 20 hours free early childcare assistance which has expanded to two year olds, previously this was available to three to five year olds

  • Abolition of the $5 prescription charge - this will remove the barrier that in 2020/21 prevented 135,000 New Zealanders who were not able to afford the $5 prescription charge from picking up their prescription, many of whom became sicker and required hospital care.[4]

  • Free public transport for tamariki/children under 13 years, and keeping half-price fares for under 25 years olds

  • Expansion of free school lunches

  • A further 3,000 houses through Kāinga Ora and community housing providers - however this will not meet the need of the 24,080 households on the housing register[5]

  • Additional funding for health services and services for people with disabilities

  • The trustee tax rate will increase to match the top tax rate of 39% - up from 33%

  • Funds for a national resilience plan for infrastructure following cyclone Gabrielle is much needed.

And there are many other good things in the no frills budget.

I am so old I can also remember the Mother of all Budgets delivered in 1991 by Ruth Richardson, which significantly cut spending on welfare support and introduced user-pays to many government services including health and education. This was the last time Aotearoa had universal family benefits.

The Wellbeing Budget of 2019 signalled a new approach with a focus on the wellbeing of New Zealanders and trying to break the cycle of child poverty.

I wonder if there needs to be yet another paradigm shift with a focus shifting the budget culture from scarcity to abundance. We live in the land of plenty and we know:

  • there is more than enough food to go around for everyone

  • there is more than enough good to go around

  • there is more than enough kindness

  • there is more than enough love, joy, and peace

  • there is more than enough wealth to go around

Abundance life is the promise of the Gospels and we know that a harmonious society is built on equity, justice and fairness. These values are crucial to create and preserve social stability and to nurture a dynamic, creative, healthy society.

The majority of New Zealanders believe in compassion, justice, and a life lived with dignity where everyone can flourish. A life that is free from poverty, where everyone’s needs are met and their contributions to our communities are valued.

Nearly 100 wealthy New Zealanders have signed an open letter saying they recognise the current tax system is unfair.[6] I understand the letter starts by saying, “We write as people who are frustrated with how much tax we pay. We want to pay more.”[7] The letter spells out the benefits of tax that funds “teachers who give our children a great start, to the Department of Conservation rangers who look after our environment, through to healthcare professionals on whom we all rely.”[8] The letter asked the Government to fix the tax system![9]

The letter went on to state that these high wealth individuals were “ready to pay our fair share” and willing to pay more tax “to help lift families out of poverty and ensure everyone thrives - an investment that would pay off many times over.”[10]

It is time to fix our tax system. It is time to fix our social support system. It is time to restore dignity to those living in poverty and trapped there by a system that does not provide them with enough to live on. A recent Newshub Reid-Research poll indicated that 53.1% supported some form of wealth tax, with 34.7% opposed, to make the tax system fairer.[11]

The Government now has a wealth of information advising them and encouraging them to make changes for the better, and support from the majority of people in Aotearoa, so let’s encourage them to make it happen.

The Methodist Alliance will soon be distributing a resource to all Parishes that looks at the issues of income security, wealth distribution and debt to government. This is the mahi of the Methodist Alliance’s working group campaigning to increase benefit levels and abatement rates. It contains questions to consider, stories to reflect on, and questions for parliamentary candidates. We encourage you to use this resource to consider what you can do to encourage our decision makers to make Aotearoa a more just and inclusive society where everyone can flourish.

Carol Barron, National Coordinator

03 375 0512 | 027 561 9164 |

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