Bradford Sue: Budget Debate 
Bradford Sue: Budget Debate 
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SUE BRADFORD (Green) 
: 
 Dr Cullen’s election-year Budget says little and cares less about the many children and adults in this country who are still living in poverty. All the talk in the world about future savings schemes and minor tax cuts makes no difference to all the people who are right at this moment struggling to survive from one end of the week to the other. 
The pride of this year’s Budget appears to be the new KiwiSaver scheme. Although I do not want to knock that excellent initiative to try to open up the possibility of work-based superannuation savings for a whole lot of people I must say at the same time that the KiwiSaver scheme does not address the real issues of wages and benefits that are not enough to live on or deal with the fact that people on low incomes will not be able to put away 4 percent—much less 8 percent—of their wages anyway. As Auckland University economics professor Tim Hazledine said in a speech the day after the Budget: “Low wages not low savings are New Zealand’s real economic problem.” The Green Party agrees absolutely with that analysis. As long as the minimum wage remains at the ridiculously low level of $9.50 an hour and benefits are often not enough to sustain people without their sinking even further into debt we will continue to trap a large number of adults and children in a trans-generational mire of poverty with all its attendant ill consequences. 
I realise that Labour’s response to that will be to say that the Working for Families package is the answer. However as a number of us have been pointing out ever since its introduction last year Working for Families is firstly a massive taxpayer bail-out of employers using Government funds to top up wages that remain consistently low and secondly a conscious push by the Government to entrench the structural discrimination against beneficiaries that National started in the 1990s. That is not good enough. Professor Innes Asher a well-respected Auckland paediatrician who supports the excellent work of the Child Poverty Action Group spoke last week about a family in Porirua who had no furniture in the house and who recently had to spend $80 for an evening visit to a doctor and for medication after one of the children had an asthma attack. That $80 was the family’s entire food budget for the week—gone in one fell swoop. All the family had left to eat for the rest of the week was bread and butter. For families like that the 2005 Budget offers no hope of an improved standard of living now or at any time in the near future. A family with at least one adult in paid employment will have benefited earlier this year from the Working for Families package but of course no more is on offer from that quarter until next year. However beneficiary families will not even have the in-work payment to help them and this Budget will have given them not one crumb extra. 
Poverty-related diseases continue to beset the children of the poor. In south Auckland meningococcal disease has struck 1 in 300 Pacific Island children under 1 year of age. Rheumatic fever pneumonia chronic lung infections serious skin infections and other conditions brought about by overcrowded and otherwise unhealthy living conditions are rife. More of our babies die than in many other comparable countries. Endless research has been done on the causes and effects of poverty on children and there is no question that income is a critical determinant of health of whether children are brought up in secure warm housing and of whether they succeed in the long term in education and employment. Without enough money to live on adults suffer but the impacts on their children all too often last a lifetime however long or short that life turns out to be. 
This Budget does do some good things. For example as the member who just resumed her seat has said it extends paid parental leave—that is great—and it increases the funding for early childhood education for out-of-school care and for special education. Also it increases the support for disability support and provides for increased uptake of the primary health care strategy. However although all that is to the good it is not enough. There are still nearly 12000 households on the waiting lists for State houses. The Government is going to build more State houses—again that is great—but the numbers they are talking about are a drop in the bucket compared with the real need right now in Auckland and outside Auckland. 
The KiwiSaver programme will not do anything for the families that are right now in overcrowded substandard or inappropriate accommodation nor will it do anything for the next 5 to 7 years or more. Not only will it be almost impossible for many people on low incomes to join the scheme—because they need every dollar they earn just to survive—but there is also a risk that people will pay out the 4 percent at the same time that they continue to incur ever-rising debt which in the long run will only make things harder for them. The KiwiSaver scheme can be used by people on low to middle incomes to put a deposit on a first home after at least 3 years of contributions. After 5 years people will be able to access the maximum of $5000. However no one will be eligible for the full $5000 until 2012. That means that families that are struggling today and that will continue to struggle over the next 7 years will not be helped until 2012 at the earliest. Others who will fall outside the 3000 likely to qualify even when the scheme becomes fully functional will continue to miss out altogether. The Government is once again holding out a pocketful of hope that will become a reality for only a tiny fraction of the people who need hope—and help—the most. 
 On top of that one of the most iniquitous aspects of the 2004 Budget unfortunately remains in force. I refer to the proposed abolition of the special benefit next year. The special benefit is a third-tier discretionary benefit that props up a lot of the gaps in the welfare system left over from the days of the 1991 benefit cuts. It is often the only way that people can get enough money to survive. Its loss will save the Government many millions of dollars at the expense of those who can least afford it: beneficiaries and their children. Labour can be as optimistic as it likes about getting beneficiaries into paid employment but I have a strong suspicion that despite the Government’s best efforts we will not see a continuing decline in the unemployment rate. In fact quite the opposite of that is beginning to happen which will leave beneficiaries and their families more vulnerable than ever. 
The Green Party believes that this Budget is simply not good enough. Too many people continue to be left out. We would have liked to see something quite different. For example Working for Families should be extended so that all families are eligible for the same payments based on income and numbers of children not on parental employment status. We would have liked to see the introduction of a universal child benefit like the old family benefit paid to the primary caregivers of all children regardless of whether they are in paid work. We would have liked to see benefit levels that are enough to live on and until they are the special benefit must remain. More money should be invested in meeting people’s real housing needs now through the State sector through local government and through the community sector. Some of the huge cost of the accommodation supplement should be transferred sideways out of the private rental market and into social housing. The minimum wage should be lifted to $12 an hour immediately. Nine dollars and fifty cents is transparently a totally inadequate living wage and the taxpayer should not continue to prop up employers to the massive extent that currently occurs through Working for Families. 
Finally in regard to a separate but related issue I take this opportunity to add my voice to those of trade unions the elderly and providers in the aged and disability care sector who are really distressed at the implications of the Budget for the work those providers do. Over the few months prior to the Budget Government people kept holding out a shard of hope that the Budget would bring relief to a sector that reached almost total meltdown some time ago. In fact what has been delivered is manifestly inadequate even though it sounds good. In a radio interview last week Minister Pete Hodgson confirmed fears that the $71 million theoretically allocated by the Budget may in fact be spent by district health boards on other services with the Minister himself saying that there is no guarantee that that money will go on aged care at all. It was also made clear that over $34 million of the $71 million is back-pay to district health boards which have been underfunded for some time in the past for residential care. Thus the long-awaited increase in funding desperately needed to boost workers’ wages and to allow providers to survive may simply be a complete mirage. I cannot understand why the Government does not take the situation more seriously when providers are closing down all the time and staff are leaving in droves for better-paid jobs here and overseas. Telling us that most people in need of full-time residential care are better off to stay in their homes is not the answer. Nor as a country can we fly in the face of the reality of an ageing population that will need more services not fewer in the years to come.