Editorial: Will storm over cost-of-living payments blow over?

Prime Minister Jacinda Ardern speaking about the cost-of-living payment. Photo / Mark Mitchell

The dark clouds of Covid are shifting as the outlook improves, but the Prime Minister is still wading through political storms.

On Monday, Jacinda Ardern had to defend the cost-of-living payments as a work-in-progress, on the same day as both a nurses' strike and Labour's estranged and expelled MP firing another social media shot at the party.

The $350 payments, planned as a positive action to help millions of eligible people get by at a tough time, became both a practical and political mess. The intended message of the $814 million scheme for residents earning less than $70,000 is being lost in the muddle.

Some payments in the first round went to people overseas, and the Auditor-General said officials may never know how many people were paid when they shouldn't have been.

"In my view, good stewardship of public money required greater care when designing and implementing the COLP [Cost-of-Living Payment] – ensuring that the criteria were clear and that the data used by Inland Revenue was adequate," John Ryan wrote.

The payments by their nature - responding to rising costs - would have had to be organised with some urgency. A key decision was to make it easy for people to receive the money rather than invite people to apply, which meant reliance on the Inland Revenue Department's data.

Ardern said IRD had issues to work through with the first batch. The second round of three payments is due tomorrow.

The PM, who said it was impossible to design a perfect system when trying to reach 2.1 million people, took issue with the idea that there was a lack of clarity over who was eligible, saying IRD was told to pay residents in the country.

Ryan was critical of both the Cabinet and IRD, summing up the situation as "speed and expediency were prioritised over certainty and accuracy".

Despite the way it's been handled, it still amounts to financial help to a lot of people and sits alongside other efforts such as fuel tax cuts.

However, any governing party - especially one facing an election next year - wants a reputation as being generally competent and a good manager of finances.

This incident has given National's finance spokeswoman Nicola Willis the opportunity to describe the process as "rushed" while the Government scrambled to tweak eligibility checks.

Throughout the first two years of the pandemic, the Government was similarly often reactive to criticism over Covid measures and approaches, making adjustments as it went along, which at least was better than not being flexible enough to do so. But that leaves the frustration of not getting things right in the first place.

The pandemic's impact ran through a strike over pay disparity between community and hospital nurses.

New Zealand Nurses Organisation president Anne Daniels said of community nurses: "They were the frontline during the Covid outbreaks, doing the vaccinations and the testing".

Staffing shortages, residency issues and the cost-of-living crisis make the health sector a particular area of pressure for the Government.

Labour has at least managed to insert some distance into the ongoing saga of now-independent MP Gaurav Sharma after he was expelled from the party. But a lengthy Facebook post by the MP suggests it will drag on.

The Government can only hope for less turbulence ahead.