COVID-19: Poverty, inequality rising in New Zealand, 'bold policy action' needed - Salvation Army's State of the Nation report

By Sarah Robson of RNZ

The COVID-19 pandemic could exacerbate "unacceptable" levels of poverty and inequity in New Zealand, the Salvation Army has warned.

In its latest State of the Nation report, the Salvation Army said the "rapid increase" in 2020 of the number of children living in benefit-dependent households - up by 23,000 - is a sign child poverty rates may not decline but increase.

Official statistics released last year, for the year ended June 2019, showed some improvement in child poverty rates across seven of the nine measures.

However, Stats NZ said at the time the changes were not statistically significant.

While new figures are due to be released next week, for the year ended June 2020, the Salvation Army said they would not show the full impact of the pandemic - and those statistics would only be released in 2022.

"Rising unemployment and the corresponding rising number of people relying on Government income support mean increasing poverty and inequality seem likely without further changes," the report said.

"The changes made to income support and welfare policy to date do not seem sufficient to protect those losing employment from poverty, or shift inequalities existing before the COVID-19 pandemic, or be enough to overcome the further pressures accompanying the COVID-19 crisis, particularly rising housing costs and higher unemployment."

The Salvation Army also pointed to the "enormous increase" in the number of food parcels it handed out last year - a sign that many households were only just managing to get by.

It said it distributed more than 113,000 parcels across the country - nearly twice the number handed out in 2019.

More than 37,000 food parcels were distributed in the eight weeks covering the national level 3 and 4 lockdowns.

Salvation Army lawyer and policy analyst Ronji Tanielu urged the Government to do more to help those who had been plunged into hardship by the pandemic.

"What we do call on the Government to do is really ask them, urge them and challenge them to take some meaningful, courageous, brave policy action," Tanielu said.

"They have the mandate to do it, they've got the power to do it, but we just don't see that often enough."

The Salvation Army said while some progress had been made reducing Māori inequalities, in terms of income disparity and unemployment, other long-standing disparities are not improving, or are worsening, especially imprisonment rates and numbers of people joining the social housing register.

Housing continued to present concerns, with a soaring number of people on the social housing waitlist, in transitional housing, and those receiving emergency housing grants.

Key findings of the Salvation Army's State of the Nation Report:

  • Māori inequalities: While there was some progress on income disparity and unemployment, other long-standing disparities between Māori and non-Māori are not improving, or are worsening, especially imprisonment rates and numbers of people joining the social housing register.
  • Food security: In 2020 The Salvation Army distributed more than 110,000 food parcels - double the number in 2019. This is the highest number in the 14 years of this report.
  • Housing: The 'sharper end' of housing is very worrying, with soaring numbers on the social housing register, in transitional housing, and receiving emergency housing grants. There are also serious challenges facing renters and first-home buyers.
  • Children: The number of children in benefit households increased by more than 23,000 during 2020, and COVID-19 has impacted more heavily on students from lower decile schools. But there is some good progress, with continuing decreases in youth offending and teen pregnancies.
  • Social hazards: Methamphetamine continues to dominate drug offences; cannabis offences declined; and financial hardship worsened in 2020, with more clients presenting to The Salvation Army with higher debt levels.
  • Work and incomes: Government spending on welfare massively increased because of COVID-19, focused mainly on short-term responses such as the Wage Subsidy Scheme, but the impacts will be long-lasting. There is rising unemployment and youth unemployment rose during the year, and those not in education, employment, or training (NEET) is now the highest number since 2012.