But it won't make much of a difference, budgeters say
With inflation hitting a 33-year high of 7.3%, the government’s $350 cost-of-living payment will not make much difference to Kiwis who are struggling to make ends meet, budget advisors said.
Read more: New Zealand inflation outpaces forecasts
In his recent visit to Northland, Finance Minister Grant Robertson said locals, like all New Zealanders, would be feeling the pain of inflation at the supermarket and petrol pump and that the $350 cost-of-living payment would particularly benefit the region.
The $350 cost-of-living payment is for workers who were earning under $70,000 a year and not getting the winter energy payment, split into three months payment of $117, starting Aug. 1.
“The proportion of people in Northland who earn $70,000 or less is higher than in some other parts of the country, so Northland will benefit more from the cost-of-living payment,” Robertson told Stuff.
Read next: Triple rate hike next month a possibility after inflation hits 7.3%
A Northlander has an average yearly income of $58,300 –much less than the New Zealand average of $65,900.
Nita King-Godfrey, manager of Kaitāia Community House and Family Budgeting Service, said the $117 payment a month was not going to go far against surging prices.
“It’s probably only going to provide a few staples – maybe some bread, milk, butter, and maybe some jam – but it will be gone very quickly,” King-Godfrey told Stuff.
She said everyone seemed to be struggling and more workers were coming in for budgeting advice.
“They’re struggling – the food prices go up and the cost of living goes up and although the minimum wage went up this year, it’s still not keeping up with the living costs,” King-Godfrey told the news agency.
She said families often find it hard to buy food and because there was just one supermarket in Kaitāia, the cheapest budget brands were often sold out.
King-Godfrey also expected Kiwis to continue to feel the pain as mortgage rates rose alongside the OCR.
Kane Lyden, manager at Kaikohe-based Mid North Budgeting Service, said the $350 payment would be welcomed by low-income earners.
“It will definitely help them – it’s something that they didn’t have before,” Lyden told Stuff.
She said most people would spend the payment on the basics, such as petrol, groceries and rent.
King-Godfrey advised people to put the payment aside for key staples or use the money to pay off debt, including credit cards.
To help ease the cost of living, Robertson said the government has extended the cut to fuel excise tax, road user charges, and half-price public transport fares until Jan. 31. The government was also addressing high food costs by looking to improve supermarket competition and appointing a grocery commissioner, he said.
Both National and ACT called on the government to address inflation by cutting income taxes and slashing government spending, Stuff reported.
