Consumer Price Index increases a must for Budget 2011

Media Release
For Immediate Release

23 November 2010

Consumer Price Index increases a must for Budget 2011

Consumer Price Index increases in social service contracts must not be compromised in the Government’s 2011 Budget, members of ComVoices, an independent network of community and voluntary sector organisations said today.

The comment comes after indications that Consumer Price Index (CPI) increases may be compromised on Government contracts for social service delivery by nonprofit organisations. The CPI measures price changes, including wages and transportation – two significant and increasing costs that nonprofit organisations have to pay for.

Wendi Wicks of DPA, an umbrella organisation representing people with disabilities, said the Government had previously recognised the need to sustain social infrastructure for the benefit of all New Zealanders.

“Communities are inextricably linked with the Sector. Our communities would not receive the support they need without the community and voluntary sector organisations that provide vital services, from staffing ambulances to education, health and social service support. The majority of New Zealanders are benefitting from the services provided,” she said.

Robyn Scott, Executive Director of Philanthropy NZ said: “This Government has been providing CPI increases for social service contracts and that is to be commended. However, this is not the time to be cutting back on social infrastructure for our communities.”

Miri Rawiri from Te Kahui Atawhai o te Motu said the Council of Christian Social Services Vulnerability Report showed demand for community support was continuing to rise as the impacts of the economic downturn drifted on.

“The tail of the economic downturn is still there. The increasing rates of unemployment are not being experienced evenly with Māori rates more than double the national all ethnicities rate. Māori youth between 15 and 24 years old have been badly impacted with an unemployment rate of 28.8%. Pacific youth are faring equally badly with same 28.8% unemployment rate.

“It is a major concern to our members that CPI costs are likely to be cut at a time when services are already stretched and underfunded. Our national demographics paint a picture of Māori statistics being the highest across many social needs categories. This is evidence enough to indicate that cuts to our social service providers would have serious implications for whānau in their communities. Let’s be real about what it costs to maintain these services - our whanaungatanga can only go so far.”

There are more than 800 NGOs delivering government funded social services. For the majority of these organisations the level of funding received is insufficient to pay for the total services delivered. They rely on donations and philanthropic funding to make up the difference.

Elizabeth Bang, National President of the National Council of Women of New Zealand (NCWNZ) said the GST increase along with other government charges and policy decisions meant there had been big increases in prices for families and that meant increased demand for social service assistance in communities.

“It continues to be a difficult time for many New Zealanders and their families. Everyone has noticed the marked increase in the grocery bill each week, not to mention the impact on fuel prices and transportation costs. The projections are that the next three annual CPI increases are likely to be over four percent with some possibly over five percent, probably peaking in June.

“At the same time MPs are discussing how much to be recompensed for cutting their international travel perks, the Government is contemplating cutting CPI increases for social infrastructure.”

Tim Burns, Executive Director for Volunteering New Zealand, said the Christchurch earthquake is a timely reminder of the importance of strong social services and community and voluntary sector capacity.

“There is more demand for budgeting, family counselling and social work services than there was 12 months ago. And that is only projected to increase. Service delivery in our communities is also done predominantly by volunteers, and organisations need the CPI adjustment to recompense them for their out of pocket expenses. That will be even more challenging without CPI increases,” he said.

Ric Odom, Chief Executive of YMCA New Zealand, said CPI was a vital part of accurately recognising the delivery costs of social services in New Zealand.

“We have a unique model in New Zealand where most of our social services are delivered by third parties, with the majority being Tangata Whenua, and community and voluntary.

“The Government has previously recognised that many community-based services, particularly in health and social services, have long-term visions and need to be funded accordingly.”

ENDS