Last week a woman came into my office in tears. Not that unusual. She works. Doesn’t earn a lot. Her husband had been laid off. He was receiving a benefit, but it wasn’t much because of her work. He had scored a few hours work in a job where they couldn’t offer full time work, though they valued him.
He had to scale back those work hours because he couldn’t get the benefit and work many hours and the hours didn’t pay enough to enable him to come off the benefit. He’d had to make a choice. He wanted to work. He was donating some hours to the workplace as a result. In order to keep in the game.
They have bills to pay. She was in tears because they’d had to make a decision that week whether to pay the electricity bill or the bank, which was pressuring them to pay some mortgage payments they had been unable to.
It was hard to know what to advise. They simply didn’t have the money. WINZ couldn’t give them any more assistance. I could only see more hardship down the line for these people who were in this position through no fault of their own.
What’s next for them? Having to sell the house, at a price less than they bought it for. Slipping backwards as they head for retirement. Rented accomodation, nothing to hand on to the next generation.
This is the plight of many New Zealanders right now. People struggling. Not much to hope for.
I sometimes despair. According to John Key and Bill English things are looking up. But they’re clearly not for these people and many others like them.
The SST did a good piece today on poverty. If you haven’t; do read it, because it says the new face of poverty isn’t people on benefits, but people on low wages. Every foodbank around the country will nod their head to this. Prices are going up. Wages aren’t. People can’t cope.
People want and need a plan.
This graph says it all really
The url for the SST article did not work.
Temporary Additional Support is a weekly payment you can get for up to 13 weeks which helps someone who can’t meet their essential living costs from what they earn or from other sources. Would this woman be eligible?
Should work now.
Hey thanks Dave. We were in close touch with WINZ. They weren’t eligible for any mroe assistance. We have referred to Budget support services. They have started going to the foodbank. It’s awful to watch people reduced.
So what is your master plan to resolve this situation Clare?
This graph says it all really
Indeed it does, Clare. It says “the increase in GST caused a once off increase in prices of around 2.2%”. Exactly as predicted by Treasury. Did you actually have a point, or are you saying that Labour would reverse the increase in GST?
Thought not.
Sorry, but if you own a huge asset like a house and you’re just trying to avoid selling because the housing market is bad at the moment, you’re not in poverty.
It’s still unfortunate, but it’s not poverty.
Petermcc – perhaps true if they owned a House. They don’t. The bank owns a house, and their equity in the house at current market value appears to be negative (or close to it). Very odd definition of asset you have there.
People who are close to retirement are so vunerable now. A lifetime of work and contributing to their country rewarded with loss of security and piece of mind. Yep, really fair!
Clare doesn’t say how much equity the couple have in their house.
The graph doesn’t mean much, as well as being being very short term it doesn’t take into account income tax changes.
This isn’t a new problem. It’s very tough to be in a dire financial situation. I have experienced it myself and have had to sell a house because of it. Another time, in the nineties, I moved to another town for family reasons, sold a house as the market dived and lost money on the house.
Both times I was able to recover financially. I know it is particularly difficult if you are getting close to retirement, recovery time and employment options are limited.
Sometimes, unfortunately, what happens in life can suck. Blaming hardship on the government of the day doesn’t help anyone. The government won’t change, at least over the next four months. And after that, regardless of the result, there won’t be any sudden miracle solutions for many people in financial difficulties.
Using examples like this to try and get political sympathy is using people’s plights, not helping them.
So they have close to negative equity in a house and are fairly close to retirement, and they’re worried that they’ll have nothing to ‘hand on to the next generation’ if they’re forced to sell it now
The characters in your bedtime stories seem a little strange, Clare.
You haven’t explained how their situation would be different under Labour.
What’s the plan? I mean Labour’s plan of course. Not 100% sure what the Nat’s plan is either really. As long as neither of you raise taxes or benefits really…
So wages are rising and apart from a one off blip in prices due to the tax adjustment that only impacts consumption, wages are keeping pace with price inflation. what’s your point? I thought WFF was supposed to cure poverty anyway?
Its simple realy for these guys, they need to vote for the left and try and battle on through.
People on the right would says its there own fault, and a life style choice or that they havnt worked hard enough.
Labour does have plans that have been spelt out that will help a bit (first $5000.00 tax free for starters), the bottom line is that right leaning parties beleive in a filter down type of system that favours those who are more well off and that is where they target there policies. People on the bottom in a right wing lead country have to wait for the filter down effect to take place, so to say they shouldnt put some blame on the current goverment is stupid.
Clare. Its much worse than the graph shows.
Price inflation for the the sort of things a low wage family has to buy is much greater than 5%.
Our normal basket of groceries, in Northland, has risen over 25% since the beginning of the year. We have been buying pretty much the same things from the same places for 14 years.
Not to mention petrol, (to get to work) power and other necessities.
We are on a high income by NZ standards. There is not much left after bills are paid.
Those on low incomes and benefits are really struggling.
People on minimum wage are effectively subsidising their employers. The wage does not cover their costs of supplying labour to the employer.
If an employer cannot pay the real their real costs then they are a drain on the economy. They should be allowed to fail and the labour made available to a better employer.
The only way to get wages back to reality is to restore the power of workers in negotiating contracts, stop employers from bleating to the immigration department when they cannot find New Zealanders who will work 16 hours a day for nothing and taxing capital flows to stop the hemorrhage of money to speculation, instead of productive business.
If the Government was serious about getting people to work they would also look at abatement rates when between a benefit and working.
If the Government was serious about getting people to work they would also look at abatement rates when between a benefit and working.
And places like burger joints and labour suppliers who only guarantee 12 hours or so of work a week, but expect people to be available for work at short notice. The so called flexible labour force.
I’m glad u said for starters, 10 a week won’t help them much. Trickle down effect is as much of a crock as raising taxes I thought.
Man that sucks
I’d pay the power first cos ya can’t look at yer bank statements in the dark. 
So, we have posters here who want to get “the bludgers off the dole and back to work” and simultaneously oppose an increase in minimum wage to a genuinely living wage.
Frankly I am ashamed that as New Zealanders we can’t feel compassion with fellow countrymen, who have worked hard, are working hard, going through this kind of struggle without starting to debate all the reasons why they aren’t really struggling.
There is something worse than being a beneficiary in this country, it’s being a 40 hour a week hard working wage earner on the minimum wage. People from all sides of the political spectrum ought to be crying out to support these folks
Agreed Tracey
Agreed Chaf $10 per week isnt much, but it is a start,
I hate trickle down effect, i can remember a rugby coach saying once that you are only as good as your worst player, if we can pull the bottom up in NZ, everyone benefits.
Tracy, your statements always make alot of sense,
I dont think most kiwis have a lack of compassion for others, i do think most kiwis are struggling to get by at present and dont have as much time to thinnk about others as they are trying to look after there own first.
I have every sympathy with this couple but I suspect their problems started a long time ago and they have probably always been borderline in relation to the poverty line. I have no problems with the top tax rate being reinstated but would think that it could come down to $120K rather than $150K. I also think trying to raise the minimum wage is a good idea too, but would think a sudden jump to $15 would see a resulting increase in the unemployment rate and or price hikes. How about 2 smaller steps, so employers can plan for it.
leaving aside the predictable attempts at personal abuse based on narrow assumption, and the relalively unimaginative attempts at fisking, i can state without the slightest fear of being labeled a liar, is that there is NOTHING that i buy(or would if i could still afford it)in the supermarket that has gone up by less than 5-7%.. many items by much more…
before a sensible, realistic debate can be undertaken, i think it is necessary that the statistics used should be separated out into relevant sub groupings rather than lumping a huge range of foodstuffs into one group and simply getting an average..
the average arrived at is accurate as to the equation posed, but to the majority of ordinary people the figure has no relationship to their reality..
there is also an inherent weakness in using a generalised average, in that the figures are open to party political interpretations.. which render them less a true guide to price shifts for the majority than a tool for governments to muddy the waters….
similarly,, it allows oppositions to misrepresent the figures to exaggerate the gravity, or existence of problems at all…
unfortunately, in this instance, the case put up on the basis of those figures, is actually far too polite.. things are getting dire for a HUGE number of people, and we can see now that it isn’t going to get better any time soon..
If the sale price of the house is less than they bought it for, I’m picking that they bought it in the last five years. If they are heading to retirement, I’d also guess that its not their first home and they would have gone into it with equity from sale of earlier homes, and would therefore have had the benefit of the boom in values.
Given that they’re heading for retirement I would wonder if they would have been able to meet mortgage payments when they retired anyway. I think I’d be surprised that a bank would lend money in this circumstance, particularly if there wasn’t a decent level of equity. They’re usually quite interested in whether your level of income is going to cover the length of the mortgage.
Why aren’t my posts posting
I don’t know. try again. Clare