Who's poor in New Zealand now?

A group of people the size of the population of Christchurch is in hardship, but there are ways to turn it around, a group of social service charities says.

The New Zealand Council of Christian Social Services (NZCCSS) has released a new report, which shows that 10.2 percent of the population is experiencing relative income poverty, and 473,000 people are experiencing material hardship.

It says, among other suggestions, there should be an increase to the amount that people are allowed to earn when they are on the benefit to $350, with a higher rate for couples.

At the moment, access to the benefit drops when household income is more than $160 a week.

The report also called for a reduction in the abatement rate once people reached that threshold, and the introduction of a GST-rebate support package to help low- and middle-income households with food costs.

It also called for benefit rates to increase.

NZCCSS chief executive Alicia Sudden said food costs had risen 24 percent for a family of four since 2021, power costs were up 12 percent in a year and rent was costing 40 percent of tenants' take-home pay each week.

She said 100,000 people were unable to pay their utility bills on time, some were not able to pay to go to the GP and one in three lived in a state of food insecurity.

Salvation Army research and justice director Bonnie Robinson said demand for food support was 50 percent higher than before Covid and last year 90,000 food parcels were given out, up 7 percent from the previous year.

"Around 10 percent of those needing food support are in employment. Benefits and wages are just not enough for people to consistently feed their families. Cost of living and fuel crises have made this worse with no relief in sight for many families."

The report said 16.8 percent of people aged over 65 were in relative income poverty and the number of over-65s on the housing register had almost doubled over the five years to June last year.

"Income in adults over 65 may not be a clear reflection of disadvantage due to some households having significant assets, a mortgage-free home or additional savings. However, in 2021 more than a quarter of adults over 65 in New Zealand were still in paid employment, with 29 percent reporting they had to continue working for financial reasons."

The report said 51 percent of Maori households experienced moderate to severe food insecurity, and more than 60 percent of Pacific households.

More than half of disabled people lived without enough or only just enough money to cover essentials.

"We haven't improved many of the things that need to go into making sure that we don't have levels of poverty," Robinson said. "People who are on our lowest incomes, people on benefits and people on the minimum wage, their incomes have not kept up with inflation and the cost of living.

"Housing costs have traditionally been very high particularly for those in the private rental market. While prices have steadied that doesn't mean they've got to affordable levels for people on really low incomes."

She said it might seem puzzling to some people that in a country that was a net food exporter, there were so many people relying on food parcels.

"Fundamentally food is too expensive and people's incomes are too low. That's a perfect storm. People at the bottom, their incomes just don't cover the basics and food is the only wriggle room in people's budgets."

She said the struggle seemed to be moving up the income bands. "Financial mentors have always seen families who are working but we're seeing families with a broader range of incomes where, with the cost-of-living crisis and the fuel crisis, people who were managing okayish are tipped into not managing because there wasn't a lot of stretch in their budget to start with and they might have been budgeting very well but for many people they're one extra cost, one small crisis away from not being able to manage."

Simplicity chief economist Shamubeel Eaqub said there was often still a mindset that people who were poor were in that position because of a lack of work. "There's some good evidence that shows during Covid when the economy was good with the right kind of support structures, lots of people exited benefits for work.

"But if you have lots of sanctions and lots of sticks during an economic downturn, when finding a job is like the Hunger Games anyway, it turns out it doesn't work."

He said the country was good at growing food but also good at growing hunger. "That's a real issue because you can't on the one hand go 'we want to have a food producing nation that wants to export to the world' and then go 'those exporters should not earn export prices'. Is it a failure of the farming sector and the good sector, or is there a failure in public policy or in community? Probably in that latter two rather than the former ... we have chosen a market-based economy, fine. But if you have a market-based economy then how can you put in place those other structures so you retain that social licence for this pretty important part of our economy?

"I think it's something we should get exercised about, but I don't think the solution is to go and say our farmers should somehow make a loss for supporting low-cost food."

Sudden said New Zealand was no longer a place where people could expect to be able to pull themselves out of hard times.

"Our systems are failing to provide a safety net for unexpected life events or economic shifts. Our welfare system puts people in hardship, making it more difficult for them to enter the workforce again, while the level of young people out of employment and education is at a 10-year high reflecting a challenging job market and difficulty accessing training and support."

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