Post Budget – Government put ‘on watch’ for welfare changes

Catholic social justice agency Caritas has put the government ‘on watch’ for the true impact of ‘re-prioritised spending’ and welfare changes expected later this year, following the 2011 Budget.

Caritas director Michael Smith said the Catholic agency had looked for a budget which would protect the human dignity of the nation’s most vulnerable people, while enhancing the common good of the whole community.

‘Budget media releases about increased spending on military youth employment schemes do not reveal the reprioritisation which meant funding cuts to community-based violence prevention programmes. What else is being lost in the movement of funds? The information to analyse this is not provided in the thousands of pages of Budget material,’ said Mr Smith.

The lack of transparency about the real meaning of ‘reprioritisation of spending’ and public service ‘back-room’ cuts means New Zealanders still remain in the dark about the impact on the poor.

‘Moving funding from back-room to front-line services makes a good sound-bite. But removing $5.2 billion from public sector spending over five years could make some front-line services ineffective. It is like removing our backbone so that our hands can do their work. It is likely to be counter-productive.’

‘Publicly announced changes fail to address the growing gap between the beneficiaries of last year’s tax cuts and the increasing hardship of many of our poorest citizens,’ said Mr Smith.

The budget is at best, indifferent, and at worst, blind to the needs of the poor.

’Thousands of New Zealanders are living in hardship beyond their personal control; whether as a result of job losses caused by the 2009 global financial crisis, or the emotional and physical devastation of the Christchurch earthquake,’ said Mr Smith.

‘The Budget was an opportunity to build community solidarity and cohesion through spreading the load and sharing the pain. Instead, many struggling households will find only changes that eat into household budgets, already tightened by increased costs of basic items such as food and fuel.’

The long term impact on the incomes of the poorest New Zealanders cannot be known from the Budget, as it does not address the government’s welfare working group recommendations.

‘This remains a threat hanging over the heads of beneficiaries. It is causing considerable stress and anxiety for many people living with disabilities, illness, unemployment or a responsibility for dependent relatives,’ said Mr Smith.

He said the Catholic agency recognises the difficult economic circumstances of the 2011 Budget. ‘We accept that some changes may have been inevitable, such as those for higher earners receiving Working for Families support. However, $35,000 is a very low earning threshold at which to introduce abatement rates when you’re talking about changes for the “higher-end” incomes.’

Caritas will continue to examine the detail of the Budget. ‘We want to assess the reality of the new public spending environment on New Zealand’s poorest and most vulnerable citizens.’


  • Caritas Aotearoa New Zealand
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