Policy Watch

“Since 1987, the only income increase for the lower-income half of the population, after adjusting for inflation, has been through increased government transfer payments – which is pretty shocking really” Savings Working Group Final Report to the Minister of Finance, p. 7

It’s budget week. Like every year, there will be winners and losers. This year is election year, so the Budget will also keep half an eye on which groups the votes need to come from. This Policy Watch we look at the Budget. Who is likely to get what. Who is likely to miss out. On Thursday 19 May we get to hear the details.

Grey and Powerful – superannuation and the budget

Four political leaders went to the Grey Power conference: the Prime Minister, the Leader of the Opposition, a Green co-leader, and old favourite, Winston Peters. It is hardly surprising. First, more of us are living longer. The number of New Zealanders aged 85 years and over has more than trebled in the last 30 years, according to Statistics New Zealand. There is also a population bulge. The youngest members of the baby boom are hitting 50,  and the oldest members turn 65 this year. We can expect our politicians to pay more and more attention to voices of older voters.

Two politicians at the Grey Power conference made promises: a discount on electricity bills (Winston Peters); and more pedestrian friendly communities and warmer houses (Russel Norman). One issued warnings: problems about the prices of food, house repairs and medical bills (Phil Goff). Finally, one reminded  older voters that they had received an 8.5% increase in superannuation after allowing for inflation, and 12,000 more operations (John Key).

At the Age Concern conference, Treasury pointed out some of the problems. For starters, by 2026 we will need between 12,000 and 20,000 extra residential care places. Then there is the cost of superannuation. Treasury Deputy Chief Executive was quoted as warning voters the current level of superannuation is untenable if New Zealand is to live within its means. Options for resolving the problem include (a) raising the age of entitlement, (b) increasing GST to 19%, (c) increasing personal taxes by $30 a week from early next decade, or (d) reducing total spending by about 7.5% from the early-2020s. Other possibilities include means-testing or making bigger contributions to the New Zealand Superannuation Fund. The Savings Working Group has warned we could have a divide between those over 45 who are assured of a pension, and those below 45 who are not. In order to teach us all to be more financially savvy, and presumably to take greater and more effective responsibility for our retirement savings, Government is transplanting the Retirement Commissioner from Social Development to the Commerce portfolio.

Budget pointer: Government is likely to leave superannuation alone in the budget – both national super, and the MPs super scheme which entitles MPs to a subsidy of up to 20 per cent of their salary.

Children don’t vote – our youngest and the budget


At the other end of the scale, some of our children are not doing so well. The Medical Association is blaming health inequities for the diverse levels of rheumatic fever in Aotearoa New Zealand. Māori are 20 times and Pasifika 37 times more likely to be admitted to hospital with ‘first time acute rheumatic fever,  than people of European descent. Lack of access to good quality housing and low incomes are important contributors to the problem.

The Medical Association put together a health equity policy statement earlier this year. A child’s early life experiences are really important. Children are more likely to do well in a nurturing environment, with good exposure to language development, and where they can develop social skills. Conversely, exposure to overwhelming stress, emotional neglect, violence – whether witnessed or endured- or even environmental uncertainty has a profound influence on the incidence of a number of diseases in later life and mental health problems.

So what are we doing for our children? On the plus side, the budget is allowing for an extra $33.2 million over four years for regular clinical reviews of all births, increasing the number of midwives in hospitals, and medical specialists on call, improving new parent information services, helping vulnerable mothers access a wider range of health services and improving DHB data collection. A further $21.3 million will increase extra WellChild services, with a particular focus on first time mothers.

On the ‘we are not sure about this' side, the Children’s Commissioner role has just been changed from a full time to a part time role, although the new one will have a deputy. There is also some suggestion the Families’ and Childrens’ Commissions may be merged more. Finally, the Crimes Amendment Bill (No. 2) which appears to require mandatory reporting of child abuse has just passed its first reading. The Bill creates a new offence, with a maximum penalty of 10 years’ imprisonment, for failing to protect a child or vulnerable adult from serious harm by a member of the same household as the victim. It also applies to staff members of a hospital, institution, or residence where the victim lives More.  Submissions are due with the Social Services Select Committee by June 3. You can make one here.

Finally, in the ‘this doesn’t look too good’ category, CCS is expressing concern about moves away from mainstream classrooms for children with disabilities. Government has announced $22.8 million will go towards building more space in special school sites and special units at mainstream schools. CCS is concerned this will keep disabled students in a segregated ‘special’ environment, contrary to the  New Zealand Disability Strategy . CCS argue the best education opportunities for disabled people happen when schools meet the needs of disabled students, and teachers have an understanding of their learning needs.

Government is also looking at integrating Wanganui Collegiate school into the state sector. Integration would mean the government pays teachers’ salaries and any building maintenance. The school has faced declining enrollments as a result of the recession. Wanganui Collegiate is an old New Zealand private school, and charges high fees. The PPTA comments that integrating the school would take money from our state schools where extra money is desperately needed.

Budget fixits for young people’s jobs

The March quarter Household Labour Force Survey statistics were recently released. Currently, 18.8 percent of our young people (15-24) are unemployed. It’s worse for our Māori youth (28.8%) and our Pasifika youth (28.1%). Business New Zealand chief executive Phil O’Reilly has been quoted as calling youth unemployment “an emergency”. So what is in the budget for our young people?

Government is spending $55.2 million over four years on a Youth Employment Package. In the package is a Skills for Growth programme which subsidises employers up to $5,000 to employ and train young people in high demand industries (eg aged care, horticulture and agriculture). Then Jobs Opportunities with Training also subsidises employers to take on young people and provide them with a six month employment opportunity. Finally, just under half the money is to put 1500 young people through the NZ Defence Force Limited Service Volunteer Scheme.

The CTU is welcoming the expenditure on youth employment, but comments it is too small given the extremely high rates of joblessness among young people. Labour reminds us that in October 2010 Tertiary Education Minister Steven Joyce cut $55 million in funding from industry training organisations… “ Finally, Peace Movement Aotearoa is lamenting the lack of “civilian training and employment opportunities for all school leavers.” It also wonders if “armed forces recruitment can be fully described as‘voluntary’, and if there are insufficient other opportunities for school leavers.”

Other ‘responsible and affordable’ budget features

John Key has told us the 2011 Budget will be responsible and affordable. This means it will contain changes to KiwiSaver, Working for Families and interest-free student loans –which 'collectively cost almost $5 billion a year', and are described as “unaffordable.” The $1,000 kick-start for new KiwiSaver members will remain, and other changes won’t happen immediately. Working for Families will be “targeted at lower-income families”, and the student loan scheme will also be “adjusted but will remain interest-free”.  Expect the budget to have something in it about rebuilding Christchurch – hopefully not by selling off Christchurch’s publically owned assets which are both important income generators and zealously guarded by many Cantabrians.

Alterations to Kiwisaver have been described as ‘risky and dangerous’ by actuary Jonathan Eriksen. Meantime, the Opposition can’t understand why the Governent does not reverse the ‘$44 million dollars a week it gives in tax cuts to the top 10% of earners.’ The Greens agree “New Zealand is now paying a high price for a series of poorly timed, poorly designed tax cuts that failed to stimulate the economy when we needed it most.” The PSA tell us that if ‘public sector agencies are forced to pay KiwiSaver contributions directly out of their budgets, around 85 million will be cut from health and other essential services.´

Suitable jobs for sick people?

Our young people need good jobs; so do people who are working their way back to work from a Sickness Benefit. From this month, sickness beneficiaries assessed as being able to work 15 to 29 hours a week, have to look for part-time work. Not only that, they have to accept any offer of suitable part-time employment and undertake and participate in employment-related training, work experience and work assessments. All sorts of medical assessments are required. The largest chunk of our sickness beneficiaries have psychological or psychiatric conditions (42%), therefore any old job and any old employer will not do. For work to work well the workplace needs to be supportive, flexible and the workload may need to change temporarily. Let’s hope our recovering people are assisted into jobs that will help them get better, and not the likes of the horror jobs you can read about here.

The family violence money-go-round

The Chief Executives of Waitakere Abuse and Trauma Counselling Service, Man Alive Charitable Trust and Western Refuge Society have been working on a whānau based approach to family violence prevention. The three organisations began working on the collaborative partnership in 2009 through ‘recognising that working in isolation isn’t effective’. However, they are concerned that if they are not successful with the new Family- Centre Services Fund this will leave Waitakere with almost no specialised support for victims of family violence. The Western Refuge Society alone receives over 2,000 referrals every year. Many of the services offered by the agencies have been recently evaluated and proven effective. Successful applicants to the fund will be notified in June.

Resources

Free counselling videos for disaster relief here.

Talk about poverty: Reporting back and moving forward, by Anna Cox and Rose Black Poverty Action Waikato report here.

Website for getting your community and hapū online here. Good for learning how to set up digital projects and connect with your people.

Community research database website here “Community Research gathers research about New Zealand’s tangata whenua, community and voluntary sector, shares it with a broader audience, creates a virtual hub for researchers, iwi and community organisations to share their ideas, and advocates good methods in community research.”

Te Kahui Mangai A directory of Iwi/Maori Organisations here.

Australian report on How freedom of religion and belief affects health and wellbeing .

What’s on

Naia te owha ki a koutou i runga i ngā tini āhuatanga o te wā - 'Super Haka' organised by Super Shuttle. The idea is to encourage all walks of life, all peoples of Aotearoa, to participate in a mass haka in support of our Cantabrians. Take part on Thursday 19 May, 12.30pm in Auckland, Wellington, Christchurch, and Dunedin. More.

Don’t Cut Our Future! Budget 2011 Union and Community Rally, 19 May, 12.15 Parliament
Rally to bring together unions, community groups and concerned individuals to show Government that there are alternatives and that this Budget with service cuts, income cuts, reduced Government expenditure and without decent investment won’t help our community’s wellbeing. Further information here or here.

The last word

“If there is a crisis in our country, it is not a crisis of welfare dependency. Nor is it just a Christchurch crisis. It’s a crisis about how much we care. It’s a crisis of a broken economy and economic policies from the past that have not upheld full employment as their goal. It’s a crisis of us allowing social welfare to be used as political theatre” Christchurch Methodist Mission, April 2011