Press release: 17 July 2008

Labour Courting The Middle Classes Again

University of Auckland lecturer, Dr Louise Humpage, says the Government is courting the middle classes again following the news that it is costing a universal student allowance.

"Many students are struggling and a universal allowance would help to reduce student debt," Dr Humpage says, "but there seems to be a degree of favouritism going on here. Student allowances, like New Zealand Superannuation, already received a top-up in the Budget while benefits were left at a miserly level. Just like Working for Families, the middle-income families will benefit more from a universal student allowance than those already living in poverty".

Research conducted by Dr Humpage indicates that the recent increases to special needs grants have done little to offset the fact that benefits are near impossible to live on.

"One research participant who is on the Invalid's benefit pays $550 a month in prescription costs. Another on the Domestic Purposes Benefit explained how one $50 visit to an emergency clinic completely blew her budget and left her struggling to feed her kids for the next fortnight. These stories are not unusual: they are the everyday reality for people on benefits".

The Ministry of Social Development's own research confirms this, with 54% of households relying on an income-tested benefit reported in 2007 to be living below the 60% threshold of a reputed measure of poverty.

Dr Humpage is particularly concerned that the Government indicated a further shift towards a single 'core benefit' earlier this month.

"This is supposed to remove the stigma of receiving a benefit. My research indicates there is really only one way to achieve that: increase benefits to a level where beneficiaries can afford to feed their kids and pay their electricity bill without having to beg from friends and family or resort to money lenders that land them further in debt".

ENDS

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