NZ Election 2020: Boosting benefits good for the economy, NZIER report says - but Labour, National won't commit to it

Newshub can exclusively reveal increasing benefits helps the economy, according to a new report from the New Zealand Institute of Economic Research (NZIER).

But despite the leaders of both major parties recognising boosting benefits helps the economy, neither will commit to benefit increases.

Newshub spoke to one mother in Porirua who said if she had a bit more money, she'd buy toys for her daughter, along with nappies, wipes, food and clothes. But she's on the jobseekers benefit, and after rent she has just $130 for food and for treating her baby's heart murmur.

"It's just sad knowing I can't give my daughter everything," she told Newshub.

Fresh research from NZIER has found increasing benefits helps boost the economy - creating a short-term fiscal stimulus and increasing productivity and GDP. 

That's no surprise to Nelson Beneficiaries and Unwaged Workers Trust advocate Kay Brereton.

"Beneficiaries spend all of their income. They kind of have to spend all of their income," she explained.

And the number of beneficiaries is increasing. In January - before COVID-19 hit - there were 313,480 people on a benefit. That's increased by 40,000 to 353,440.

But neither Labour nor National is committing to increasing benefits, despite both leaders conceding increased benefits translate into spending, which is good for the economy.

"We did recognise there's a role to play there, that is why we have already increased main benefits by $25 a week," Prime Minister Jacinda Ardern said on Monday.

"They give people more money to work with," National leader Judith Collins said. "I think you have to recognise money comes from somewhere. It doesn't just come from a big money tree."

Collins is ruling out increasing benefits, but promising not to slash them either.

"They are very worried, and the last thing I want to say to them is should they find themselves out of work, or they are out of work, that we'd penalise them."

Welfare will be one of the major policy issues this election, with more New Zealanders expected to join the dole queue when the wage subsidy runs out next month.

Perhaps that's why both leaders are treading so carefully.