Why Are The Most Desperate Ignored In The Budget?

Why Are The Most Desperate Ignored In The Budget?

Unite Union wants to know why the most desperate sectors in New Zealand have been ignored in the budget, and wants a new package of support released soon.


With unemployment set to explode as the government wage subsidy comes to an end, many workers who have never had to rely on a benefit are soon going to have to come to terms with a system that drives people deeper into poverty and debt.


A number of employers Unite deals with are already beginning redundancy processes with jobs set to be terminated as soon as the subsidy runs out. We are aware that other unions are reporting the same scenario.

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Over the last ten years, the number of people applying for emergency benefits and accessing emergency food agencies have been exploding.

This reflects the very low level of benefits in New Zealand and the fact that the agency responsible for delivering support has been governed by a culture of denial of entitlements.

This culture was imposed on WINZ in the mid 2000s and led to a halving in the percentage of unemployed people accessing benefits, many choosing to try and survive with no income at all, rather than face ritual humiliation, belittling and bullying from caseworkers.

The Household Labour Force Survey measures the number of people officially unemployed, as well as a broader number of people who are “jobless”.

Between 1990 and 2003 the number of people on benefits never dropped below 64% of the jobless number. Over the next decade, it dropped to only 18% of the “jobless” number. It went from 120% of the unemployed number to only 45% in 2013.

No explanation has ever been provided as to how this was achieved without denying people their legal entitlement.

These numbers are behind the hunger and homelessness associated with joblessness over the last seven years when unemployment was officially relatively low. But if you were unemployed and couldn’t access any form of entitlement then misery was the inevitable result.

The new mass unemployment that will be being unleashed over the next six months demands a complete culture change.

But the exposure that WINZ is still unlawfully telling people who have received redundancy payments that they must exhaust all their savings before accessing welfare is proof that this culture has not changed at all. Heads should roll at the top if needed to ensure this change.

Five urgent steps are needed:

  1. A doubling of the value of the unemployment benefit over the next six months at least. This was done in Australia by a right-wing government and should be copied here. The current benefit is worth only 20% of the average wage compared to 40% before the 1990 benefit cuts. Even after those cuts, the adult unemployment benefit was worth 33% of the average wage. It has been allowed to steadily decline in value because it was only ever increased by the consumer price index rather than average wages like superannuation has been.

  2. Extending benefits to migrant workers who have been brought to New Zealand with the promise of work and education opportunities and now have lost their jobs. The government is currently forcing thousands of migrant workers to starve. This is morally repugnant and it is no exaggeration to say it will lead to unnecessary deaths.

  3. The income people should be able to earn before benefits are cut should be radically increased to at least levels recommended by the Welfare Experts Advisory Group. If the government is serious about trying to protect workers from redundancies and help unemployed people back into work, workers need to be able to work part-time and receive enough support to make that affordable.

  4. All benefit entitlements should be individualised so workers can access benefits even if the partner is working. The current system doesn’t reflect 21st-century families. It actually destroys families rather than protects them.

  5. The $75 weekly in-work tax credit for a child should be extended to all families. This will ensure families accessing a benefit during this crisis period aren’t doubly penalised by having their payment taken off them. It will also ensure a real increase for current beneficiary households denied this entitlement.

Governments, both Labour-led and National-led have ignored the welfare of people on benefits for years. They have treated them as second-class citizens, better kept out of sight and out of mind. The government is about to find out that this will no longer be possible.