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Wednesday, 20 March 2019 08:54 am

Beneficiaries and Maori being hit hardest by rises in living costs

Statistics New Zealand has released a report has shown low income household, particularly Maori and beneficiaries, are being hit hardest by rising living costs.

Tax hikes on tobacco and rising rents are hitting beneficiaries and Maori harder than other groups, a quarterly Statistics New Zealand report says.

The Household Living-costs Price index for the March 2017 quarter says living costs for Maori households and beneficiaries rose 2.2 and 2.1 percent respectively.

Rents have been rising across the country, particularly in the capital.

The report found living costs for low spending households rose 2.3 percent, while costs for the highest spenders rose .5 per cent.

Rent has been steadily increasing across the country with Auckland rents up 3.3 percent and Wellington 8.3 percent since last year, according to a Radio NZ report.

Wellington City Councillor Brian Dawson says some people are paying more than half of their income on rent.

“That’s the elephant in the room in the whole country but in Wellington in particular, it’s biting and unlike Auckland we haven’t seen a downturn in rising costs.

Pam Waugh, territorial social services secretary for The Salvation Army says people on benefits or low wages are struggling with everyday living costs.

“We see more and more people that are coming through, cannot afford the rent, cannot find anywhere cheap enough to live and are living in unhealthy situations,” she says.

“They let food go so they can manage to pay the rent or the power that week, so those are the two things that have a big impact on you if you don’t pay.”

“So they come to the food bank for help.”

The Salvation Army has seen an increase in people seeking their services across the country.

She says Maori and Pacific people are being disproportionately affected.

“About 39% of our clients nationally are Maori. Which is quite shameful for New Zealand, really,” she says.

“The next group after that would be Pacific Island peoples, living in more poverty than Pakeha people.”

The price of tobacco rose 9.7 percent after a 10 percent tax increase in 2016 according to the last Statistics NZ’s Consumers Price Index in July 2016.

Maori and Pacific Islanders have a higher rate of smoking than other ethnic groups.

More than a third of Maori (37 percent) and 28 percent of Pacific smoke, a Ministry of Health report says.

In contrast, 14.5 percent of Europeans and 8 percent of Asians smoke.

While city councilor Dawson is an advocate for smoke-free Wellington, he admits that higher taxes on tobacco are a double edged sword and disproportionately affect the poor.

The National government raised taxes on tobacco by 10% in it’s budget last year.

“I know there’s a big debate about whether tax hikes on tobacco penalise the poor, and I guess to some extent they do,” he says.

“But actually the people they penalize are smokers. If cigarettes are too expense for you, now’s the time to think about kicking that habit.”

Dawson recognises rates of smoking are higher among the Maori, Pacific and Youth groups.

“We’re looking at 100% more in those groups, and there’s no question that that’s partly to do with socio-economic,” he says.

He says programs to help people quit are essential with the increased tax.

“We’ve got to do what we can to both encourage and assist those people to kick the habit. And if you like, the taxes are a stick, the carrot is free assistance and saving a hell of a lot of money.”

The Salvation Army’s Waugh says it’s a difficult issue, but does have an effect.

“It does impact on our people. And people have choice. We can’t say to people don’t smoke, it’s costing you money,” she says.

“We can see it from both sides. The tax on it will hopefully persuade some people to give it up, this is a wider health issue. It’s costing our health departments for that.

“On the other hand we have people who need to smoke because that’s what they have to do. They’ve got to understand the impact of that on their families of what it’s costing you to smoke.”

She agrees that support is needed to help bring down smoking rates amongst poorer groups.

“If we’re going to support people to get off that, we need to provide the services that can help.”

The household living-costs price indexes (HLPIs) look at typical inflation experienced by 13 different groups, including beneficiaries, Māori, superannuitants, and 10 other groups of people who have varying income and spending patterns.

Grouping spenders into two groups – lowest and highest – the report found living costs for low spending households rose 2.3 percent, while costs for the highest spenders rose .5 per cent.

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