… And You Can Do Something About It?
I prefer to see the train coming when it hits me.
On February 20th, the Social Security (Benefits Adjustment) and Income Tax (Minimum Family Tax Credit) Amendment Bill reached its third reading in the House and assented the following day. This bill has been one of the major points of interest for the government and has received significant dialogue in the lead-up to the 2023 election.
The Minister of Social Development, Louise Upston, clarified that the purpose of this amendment is aligned with the government’s belief that a “…job is the best way for New Zealanders to get ahead.” The amendment should support national fiscal sustainability, strengthen real incomes (income adjusted for inflation), and “…reduce the number of children in benefit-dependent households.”
Your benefits will continue to increase.
Although a little reluctant, she did confirm the MSD had forecasts for increases in children in poverty in the near future. (We approached the Green Party for comment on the amendment’s relation to students and if we could reference some of their forecast sources, but they were not able to respond in time.) Upston’s justifications for this amendment don’t seem unreasonable. After all, she herself had been on a benefit. It seems to be a somewhat justifiable middle-ground, with dependent students caught in the crossfire.
Well, what about Jobseeker Support benefits? This part was arguably more interesting than social benefits. With roughly 40,000 young people under 25 years old currently on the Jobseeker benefit, UoA students would be dying to hear about the effects of this change on themselves. MSD statistics from December 2023 supported the claims made by Prime Money-Saver, Christopher Luxon. Sanctions (a reduction in benefits) have been increasingly issued since December 2020 for a mixture of clients not attending appointments, and failure to prepare for work, both reasons Luxon had given for introducing obligations with increased strictness. Additionally, if you were me, you would have understood the benefit to be a temporary and transitional one. If that were the case, you would be surprised to find statistics available for clients who are “Work Ready” and have remained on the benefit for over 10 years. Despite the commotion made from announcements, no benefits are cut. There will be greater vigilance placed on clients, to ensure the proper compliance is taking place, at a more regular pace. Contrary to media statements, you will still maintain your benefit payments, with CPI adjustment and provided you are compliant to your benefit’s new expectations.
Over $500,000,000 Borrowed By Students For Living Costs
In 2021, nearly 60% of the 146,994 borrowers relied on their student loans to pay for their living costs. This number was well over half a billion dollars. This isn’t surprising when you turn around to get to know your friends and classmates (32% of our student population comes from a “constrained economic background”). Sticking in line with this issue’s hustle theme, the news team at Craccum follows a report immediately by asking yourself:
“Why am I studying my degree?”
Debt, in the end, is still debt. Is your choice of study (including your reason for borrowing) an investment into your financial future or simply something for pleasure or personal interest? The muttered truth between classmates is that many of us entered university without a plan.
Some of us have made great sacrifices, moving to Auckland from faraway places like Canterbury, with goals we’re willing to go through hardship to achieve. But some of us need to be more honest with ourselves and question whether we are making a real investment into our future lives. No one can make that decision for you except for yourself.
Wages Have Lost 9% Of Its Purchasing Power in 2 years
The Hustle theme with a personal anecdote…
In 2022, I spent my first year out of high school living alone, studying part-time and working roughly 22 hours. I received no benefit, and the minimum wage was $21.20. With an income of roughly $390 after-tax, I spent about $210 on rent and utilities, $60 on transportation, and $40 was my weekly food budget (totalling $330) I had about $80 after expenses were paid for, which I placed most into an emergency fund.
So what’s my secret to hustling while living alone? I worked two jobs and used public transport to travel extensively, despite the long hours. I often picked up extra work on the side to get extra cash. Fortunately, the chefs at one of my jobs took pity on me, which helped me keep my food expenses low. Above all, I lived incredibly frugally. My homemade meals were simple, low-quality foods high in carbohydrates to get me through the day. I often saved up a week in advance to take my girlfriend out to a modest lunch, and I did not personally spend money on myself.
I’m not going to glamorise that period; it was really difficult. The question of whether we should go through hardship like that, struggling to pay bills, and keep up with university, is an entirely different story. What I can tell you from my experience is that this was difficult but doable. Your experience will be very different from mine, but what you will share is having to go through many hardships to make your goals possible. Don’t let the outside noise distract or demoralise you from what you need to do; more recently, we can’t wait for help to keep ourselves afloat.
Take that job with horrible hours but give you the money to cover rent. Sell off some of your old books and clothes, because you must pay off an unexpected expense. We’ll figure it out after each step. Until then, what happens in a building at the bottom of the North Island is irrelevant to your life; you are in control of how you respond to the world around you. No matter how hard, there is always an option that allows you to get through the adversity you are facing
Durutalo, M. (2024). Government to crack down on beneficiaries failing to seek jobs. Te Ao, Māori News. https://www.teaonews.co.nz/2024/02/19/government-to-crack-down-on-beneficiaries-failing-to-seek-jobs/
Ministry of Social Development. (2023). Benefit Facts Sheets Snapshot — December 2023. https://www.msd.govt.nz/documents/about-msd-and-our-work/publications-resources/statistics/benefit/2023/benefit-fact-sheets-snapshot-december-2023.pdf
Nelson, M. (2021). Long-term Jobseeker support demand surges, Labour and National blame each other. New Zealand Herald. https://www.nzherald.co.nz/nz/long-term-jobseeker-support-demand-surges-labour-and-national-blame-each-other/XSWIX7V3STWXMTQ436N53ANGBY/
Pearse, A. (2024). PM defends evidence behind beneficiary sanctions, Opposition labels welfare reset ‘politics of cruelty’. New Zealand Herald. https://www.nzherald.co.nz/nz/politics/christopher-luxon-fronts-media-at-post-cabinet-press-conference-after-tough-love-benefit-remarks/WFK6HN5IRVED5HAJYHXGR4HTN4/
Reserve Bank of New Zealand. (2024). Inflation Calculator. https://www.rbnz.govt.nz/monetary-policy/about-monetary-policy/inflation-calculator
University of Auckland. (2023). University Demographic Data. https://www.auckland.ac.nz/en/about-us/about-the-university/equity-at-the-university/university-demographic-data.html
