Published on 30th of April, 2023
Government’s Budget vote this year is happening amid ongoing, significant increases in food, rent and fuel costs, with last year’s wage rises already wiped out by inflation.
Inflation is now at a 30-year high, placing yet more households at risk of falling deeper into debt.
In a recent Stuff article an Infometrics economist said that inflation will be 6.6% by the end of this year and that the Reserve Bank might not get inflation back to its 1% to 3% target range before mid-2025.
Government’s ‘Budget Policy Statement 2023’ issued mid-December last year, attributes the forecast recession to a combination of external factors: the global economic downturn, high inflation worldwide, troubling geopolitical factors such as war and trade disputes, and ongoing supply chain issues. “It is devastating to see that continuing price rises for essential items have worn away increased rates for people receiving welfare benefits,” says CMM’s Executive Director Jill Hawkey.
“When prices rise, so too does the GST that we have to pay on goods and services. This is a big blow particularly for low income households because they spend a greater proportion of their funds on necessities, with items such as rent, food, and fuel taking up a large and ever-growing share of their income.”
Jill’s concerns are echoed in the results of the latest CMM Budget Wishlist Survey. The survey found that stakeholders viewed CMM housing services as the most important to them currently. Undertaken in the first months of 2023, invitations to participate in the survey were sent to clients, staff, donors, grant-makers, volunteers, board members, and suppliers.
“Housing was overwhelmingly the most cited concern for our stakeholders,” says Jill. “Top of their minds was the affordability of rentals and the need for different types of housing, particularly public housing. Co-housing and tiny houses were mentioned by some as possible alternatives.”
Trade Me property data released in late March showed record highs for rent prices across Aotearoa in February, with rental properties in Canterbury (8.3%), Nelson/Tasman (10%), and Marlborough (7%) in the top five group, with the other two regions in the North Island.
“CMM provides services in three of the five regions that saw the biggest rent increases,” says Jill. “Our teams regularly provide me with updates about the scope of the problem in the areas we have a presence, so I’m not the least bit surprised that our stakeholders would like to see more social housing and better access to affordable rental housing.”
Close behind housing were poverty, income security, and access to public health services. Difficulty accessing both GP and mental health services received special mention, along with concerns about the impact of cost of living increases on the already high levels of stress and anxiety experienced by vulnerable families.
Recent data released by Stats NZ provides a glimpse of the financial pressures bearing down on households that experience income insufficiency, with food prices alone rising 12.1% between March 2022 and March 2023. Meanwhile, rents for small Christchurch properties “climbed 13% year-on-year,” according to a Newshub report on 26 January 2023 and the Automobile Association warned in another Newshub article published on 4 April 2023 that petrol prices could increase significantly this year.”
“High petrol prices make it that much harder for poor households to participate in a range of basic activities like getting to work and attending school,” says Jill.
Stakeholders were also concerned about polarisation in the community arising from disinformation and other factors, as well as increases in the rate of family violence and substance abuse. Unsurprisingly, the effect of climate change was another shared concern.
In response to the question “What areas would you like to see Government increase or introduce funding to in this year’s Budget,” benefit rates, health, and housing were top of mind.
“Our stakeholders are strongly aligned to the Mission’s vision of a just and inclusive society,” says Jill, “and this was very clearly expressed in the response to this question. Our stakeholders were most concerned about seeing benefit rates increase in relation to child poverty alleviation, the burden of beneficiary debt, and as a caring response to the rising cost of living.”
Improved access to services for mental health, dental care, child and family care, and elder care was also on people’s minds, with several respondents noting the importance of Government investing more in health workforce development.
Jill says that despite the significant challenges ahead, CMM continues to believe that change is possible and our Board and staff know that our mahi in the community is often the difference between despair and hope.
“We remain committed to prioritizing those who are most vulnerable and to working where we can add value. Knowing that our stakeholders share these objectives is empowering for all of us who work here,” says Jill.
