Policy Watch Budget 2013 Special

Budget 2013: Lean Pickings for Those Most in Need

The background to the 2013 Budget is the fact that social service agencies throughout the country are facing record demand for their support services. Our networks of social workers, counselors, nurses and care workers, budget advisers, community housing agencies, emergency housing services, night shelters and other advocates and support workers deal every day with people who have been left behind and are struggling to cope as economic and social inequality that continues to divide and weaken our social fabric.

NZCCSS has written the reports, briefed Ministers, officials and worked on countless advisory groups, committees and working groups. Prime Minister John Key and Finance Minister Bill English are very well aware of the extent of the need. They reported to the country on Thursday that the Government’s books are even slightly better than expected and they have a bit more to spend.

Our initial conclusion about Budget 2013 is that what has been announced won’t be enough to reduce demand for frontline services that our members provide. At best today’s announcements provide a few more extra “tools” to try and help people a little but the fundamental dynamics of high inequality and unacceptable poverty will not change.

Some of you may have forgotten that the Government set up a Ministerial Committee on Poverty. It seems to have had little impact when considering the priorities for this Government’s spending. It gets a rare mention as Minister Tariana Turia listed off the things the Government is doing about poverty:

• Home insulation: Extending the Warm Up NZ: Healthy Homes home insulation programme for another three years at $100 million
• Rheumatic fever: $21 million over four years for rheumatic fever prevention
• Budgeting services: a one-off extra $1. 5million for budgeting services
• Grants for new whiteware: Centalised government purchasing of new whiteware appliances on behalf of beneficiaries funded through MSD repayable grants.
• No Interest Loans Scheme: Investigate and pilot in partnership with NGOs and financial institutions low and no interest loan schemes for people on low incomes. NZCCSS has been involved in developing a pilot of such a scheme together with Kiwibank and it has been operating successfully in South Auckland for two years. We look forward to government support to widen access to such schemes that help people avoid the debt trap of expensive credit and loan sharks.
• Housing Warrant of Fitness: It is great news that the Government has finally agreed to trial a Warrant of Fitness programme for rental housing. NZCCSS and other housing groups have been calling for this for some years. It is disappointing that the scheme will only be focused on Housing NZ houses, because it is the private rental market where the poorest quality houses are and where tenants have the least protection.

Government’s Response to the Experts Group on Child Poverty

The Government has also said that it will be providing a comprehensive response to the Children’s Commissioner’s Experts Group report published last year. The group made a large number of recommendations, that included the no interest loans schemes and housing warrant of fitness, but other recommendations have not been addressed in the Budget night announcements. We can only hope that any response to the Experts Group report will not be hampered by the lack of a Budget allocation.

Welfare Reform Process continues: There is little new information on welfare reform that is already well advanced. The “investment approach” to welfare sees more Work & Income staff to provide intensive support and additional funding to external providers to provide management and wrap-around support for beneficiaries.

Housing – finally some action but we need more details

No doubt spurred on by the major policy announcements around housing by the Green Party and Labour Party, the Government has now announced some significant moves. Without more detail, it is difficult to assess what the overall impact of these announcements will be and whether they will genuinely help those on low incomes with their housing needs.

Income-Related Rents for community housing providers: This is a very welcome decision that community housing providers have been asking for for years, putting them on the same footing at Housing NZ.  An extra $26.6 million has been allocated to extend IRR to community housing providers, meaning lower rents for their tenants. The details of how a registration for this will operate will be part of legislation coming into Parliament and it will be important to see how community housing can become eligible to offer IRR.

MSD to take over social housing entitlement assessment: This is also a welcome move, bringing responsibility for all housing support under the one department. $30 million has been allocated to fund this change which is planned for April 2014. It is to be hoped that this will improve access to full entitlement to housing support for people on low incomes.

Housing NZ reviewable tenancies: The decision to extend reviewable tenancies to all HNZ tenants is one social service agencies will view with concern. How this will be done and in what timeframe are important details still to come, but in the context of a highly unfair and poorly regulated private sector rental market where people do not have secure tenancies, this policy could end up adding to the housing insecurity and stress for many low income families.

Social Housing Fund: $139.3 million is allocated to the Social Fund over the next three years and the Minister has signaled linking the approval of new social housing providers to the housing warrant of fitness work. More details about this funding and the proposed processes are needed before any comment can be made about the impact of this announcement.

Housing Accords Extended: The Government plans to use the housing accord process that it has announced for  Auckland in other regions. The provision for the Government to simply override local councils that oppose moves to speed up or eliminate council regulatory processes around housing development are a cause for concern.

There is some degree of concern with the changes in State housing which require the review of more tenancies to ensure state housing is focused on those with the highest levels of need. While there may be some Housing Corporation tenants who have achieved sustainable long-term betterment in their income, it is always at the margins where these types of policies become heartless. At what point has a family become better-off in a way that they will be able to maintain a different type of home tenancy in the long-term, rather than finding themselves hovering around the border of ‘deserving support’ and of being deemed as capable of ‘independence’? This needs close monitoring and is liable to produce some real injustices if a compassionate approach is not taken to this type of assessment.

Some other good things for the most vulnerable

Health Funding increased:  But still falling behind the real costs of providing health services to an ageing population. Increased funding for aged care has already been announced and while additional funding is welcome, it is not sufficient to cover rising costs and needs in the sector or to significantly lift wages and training for the aged care sector workforce.

Support for Family Carers: The funding announced of $92 million to allow payment to family members caring for disabled relatives looks like it will only go part way to addressing the needs and will be quite restrictive in who it will apply to. More details are needed about how this will work and legislation is being introduced as part of the Budget process.

Preventative “Before school” health test for four-year olds and the mothers and baby initiative that has been signaled will not doubt do a little to help vulnerable children and families.

Early Childhood Education: Further investment in providing ECE to reach the poorest communities is a welcome announcement that goes some way to addressing one of the key inequalities in education.

Children’s Action Plan commitments: $13.7 million is being put into furthering the Children's Action Plan work. This includes:

• Developing a Children’s Workforce Action Plan, as well as a Working with Children Code of Practice and competencies, to implement new screening and vetting processes and training programmes.
• Promoting mentoring and establishing a scholarship fund for children.
• Child Harm Prevention Orders for individuals who pose a risk to children.
• Predictive risk tools that will help find, assess and connect the most vulnerable children to services earlier and more effectively.
• Service design for the Child Protect Line, for the public to report concerns.
• Cross-agency care strategy to improve the outcomes for children in care, and support for children and young people transitioning out of care.
• Two regional children’s directors to provide regional leadership and a national children’s director to provide national leadership, and the Children’s Action Plan directorate to oversee the implementation of the Children’s Action Plan.
• Two children’s teams in Rotorua and Whangarei, including intake processes to test the new early response system.

Reducing re-offending

It is good to see some effort and a small level of funding being directed to ensuring restorative justice programmes and support for prisoner reintegration is being increased.

• Restorative Justice programmes have received a vote of confidence in their effect in reducing re-offending with extra funding of $4.4 million over two years to fund an additional 2,400 restorative justice conferences
• Support for offenders on release will receive $10 million over two years to increase support for people leaving prison with the aim of reducing re-offending.

Conclusion:

Our initial assessment of the Budget is we have just received more of the same. The continual focus on the market and on growth policies will have only limited impact on poor and vulnerable New Zealanders. Given how those on the lowest incomes have been left behind by the last almost 30 years of neo-liberal, market driven economic policy the impacts may in fact be negative! We must grow a more equal society where the divide between the haves and the have-nots is significantly reduced. When our Budgets are focused on better sharing of our resources and on ensuring those with the least get properly supported then we will be on track to true prosperity as a nation.

While there have been some changes in the tools available to social service organisations this has been limited. Some, such as the approach to social housing may result in some new developments and a modest increase in the number of people housed by community based social housing providers.   However, there is little evidence that the scale of the announced changes will make a significant difference to the poorest and most vulnerable amongst us.

The lack of direct focus on a large scale approach to addressing the problem of child poverty, even after the huge amount of effort that has gone into raising the profile and the political and public understanding of this issue is very concerning. The White Paper for Vulnerable Children and the Children’s Action Plan states a government policy principle – “children at the centre of what we do”. The lack of action on child poverty suggests that Government is not following its own advice. Until we ensure all of our children grow up in an environment which is not blighted by poverty we are very unlikely to have a future where our economic, social and cultural wellbeings are enhanced.

As the Budget announcements resolve into the processes for implementing change NZCCSS will release further information on how social service organisations can engage with the new directions. Through the Vulnerability Report and our other publications NZCCSS will continue to report on how government policy is affecting poor and vulnerable members of our communities and the social services organisation that serve them.

Further Budget analysis is available here:

ChildPoverty Action Group: 

EveryChild Counts;

MicrofinanceSupport for People on Low Incomes (NZ Government):

Reforms focus state housing on highest need(NZ Government): 

HousingPackage improves affordability, access (NZ Government):