A child relishes a serving of diced pears from a KidsCan lunch pack at Aranui School in Whanganui. Photo / Bevan Conley, File
A child relishes a serving of diced pears from a KidsCan lunch pack at Aranui School in Whanganui. Photo / Bevan Conley, File
OPINION
“Many things can wait. Children cannot. Today their bones are being formed, their blood is being made, and their senses are being developed. To them, we cannot say tomorrow’. Their name [need] is today.” Gabriela Mistral, Winner Nobel Prize for Literature, 1945.
KidsCan chief executive Julie Chapman says thecharity is feeding 10,000 more children a term than at the beginning of the year. It fields calls from principals in tears over hungry children. “It’s the worst we have ever seen it”. Tales of families struggling to put food on the table are in the news almost daily.
Inflation for the September quarter was 7.2 per cent. Demand is spiking in the construction and travel industries as they return to normal trading. Prices for food, petrol, building supplies etc, increased due to global supply issues and costs. Companies and banks making super profits add fuel to the fire.
Home loan rates are around 6 per cent, more than double a year ago. That’s an extra $20,000 yearly on an average mortgage of $600,000.
And the Reserve Bank is courting a recession by raising interest rates rapidly. Douglas Diamond, an Economics Nobel prize winner in 2022, told Fortune magazine in October that raising interest rates too fast will cause “all kinds of trouble. If they slam on the brakes, they will cause a crash.” Herald journalist Liam Dann noted: “We’d face serious social and economic damage as companies collapsed and redundancies flowed. That’s something worth remembering amid increasingly frantic calls to hike rates and squash economic demand.”
Inflation - Finance Minister Grant Robertson maintains it is under control. Illustration / Rod Emmerson
The Reserve Bank, in its Monetary Supply Statement of August, said: “The supply of goods and services will improve over the medium term. Supply chain bottlenecks will continue to ease, and migration’s resumption will bolster the labour supply. Inflation will reduce to the high end of the 1-3 per cent target by early 2024.″ Why slam on the brakes so hard?
John Gascoigne, an economics commentator, wrote in the Herald on September 23: “The public is continuously fed assurances by our political masters, economists, and the commentariat. We have a ‘sound economy’, a ‘good economy’, Our ‘economic fundamentals are very sound’, and so on. Yet, we have child poverty, homelessness, housing unaffordability, low wages, working poor, widening inequality, and a large Kiwi diaspora.”
A NZ Statistics 2021 survey found 11 per cent of children live with material hardship, significantly higher for Māori (20 per cent) and Pasifika (24 per cent). These are children who go without nutritious food, live in cold houses, can’t see a doctor in time, don’t have two pairs of shoes etc. It will be worse today.
Our tax policies are some of the most extreme in the world. We are the only developed country without at least a concessionary GST rate for food; the only country except for the US that taxes income from the first dollar. Oxfam ranked our wealth and distribution fairness 136th out of 161 countries and tax policies 91st. Even David Parker, the minister in charge of taxation, admitted we have an unfair tax system.
Our welfare benefits leave much to be desired; the Jobseeker benefit for a couple is 26 per cent of the median wage. The accommodation benefit is worse at $235 in the most expensive areas in the country when the nationwide median rent is $600. Four out of five children in material hardship live in rental accommodation.
Labour just announced that the Government’s financials were $10 billion better than forecast. Four billion dollars from corporates that made higher profits while many of us are struggling. Six billion dollars from me and you. Tax brackets were last adjusted in 2010 by John Key’s government, with extra GST tacked on to pay for it. The 33 per cent tax now starts at just 15 per cent above the median wage.
In May, Treasury forecasted an increase in tax revenues from $103b for 2022 to $137b by 2026 - an increase of $44b (45 per cent), including the $10b in 2022, over five years.
Kushlan Sugathapala. Photo / Supplied
Grant Robertson reeled off impressive economic figures to Labour supporters. A growing economy and ”near record” low unemployment. A low debt level by international comparison – half of Australia, a quarter of the UK and a fifth of the USA. We are in a stronger position than many countries.
Robertson ruled out any immediate inflation relief and pushed any tax changes to the next term of government. Why do governments find it easier to ignore hungry children while resisting calls to tax the excessive profits of large companies? Non-urgent projects, such as the TVNZ/RNZ merger, carry on spending money. They are not pushed to the “next term of government”. Belt-tightening is for the people, not the government.
Labour has made progress in the battle against poverty. Levels of material hardship have dropped from 13.3 per cent to 11 per cent (17 per cent) and severe material hardship from 6.7 per cent to 4.9 per cent (27 per cent) over its four years in government. Progress will stall or even reverse if National Party comes into power. The poor and poverty don’t even exist for them, as their tax policies make abundantly clear.
Rebuilding better requires fixing some fundamentals, like reducing GST on food or a tax-free bottom slab and increasing the accommodation allowance. Opinion polls are a clear signal to Labour; it’s not doing enough. A lack of progressive policies is hurting them. People who went through Covid hardships need relief, not more hardship. We have a government with rosy finances and struggling citizens. This is not a time to kick the can further down the road.
This is an affluent country; it is not right to have thousands of hungry children.
Kushlan Sugathapala is a researcher and writer on social justice issues.
