22 May 2015

Budget 2015: Slim pickings for low paid, say unions

12:53 pm on 22 May 2015

Unions representing low-paid workers say the small boost to tax breaks for working families in the Budget will be quickly be absorbed by rising costs.

They are calling on the Government to make a real difference by fixing the low wage economy.

NZ twenty and five dollar notes.

The low wage workers will get little benefit for yesterday's Budget say unions. Photo: RNZ / Diego Opatowski

Lower Hutt fast-food worker Renee, will be $12.50 a week better off under the increases to Working for Families, which she said was better than nothing. But she said with four kids aged 10 to 18, it would not go far.

"Sometimes you're just making enough each week just to be broke, and you're spending almost 40 hours a week away from your home - just to get by. You know, you think working was supposed to pull you out of poverty, not keep you there.

Renee, a member of Unite Union, said she was only able to work night shifts because that was when her 18-year-old daughter could care for her three younger siblings.

She said the Government was putting unrealistic pressure on people to find jobs that did not exist.

"Where in the world is there a nine-till-three job? I've been a working mum for 18 years, I was never able to pin down a nine till three job. It didn't exist you know? They'd rather hire someone who's available from 9 till 5 - and there's going to be a lot of people out there looking for those jobs."

Wellington community support worker Tamara Baddeley works six days a week, often starting at 7am and finishing after 9pm. After nearly 14 years looking after elderly and disabled people in their homes, she earns $15.95 an hour.

She said there was nothing in the Budget for low-paid workers like her, without dependent children.

"The Government save $29,000 per person that we keep at home. It costs them $23,000 per year, per person they subsidise in resthomes, but it only costs them $3000 to subsidise everyone that's in their own home. But I'm not surprised there's nothing in there for us, because they don't actually respect us."

Porirua mother-of-four Jody Maaka says an extra $12.50 would not make a huge difference.

"Aw, just an extra packet of toilet paper probably. You know it's not going to last the family out 'till the next week, 'till the next pay day. I work six days a week and I still struggle. I still struggle just to put food on the table, because it is so expensive."

Read more stories on Budget 2015

Changes to Working for Families

Under the changes announced in the Budget, 53,000 families earning $36,350 or less a year will get $12.50 extra a week and 4000 very low income families will get an extra $24.50 to match the increase to benefits.

Around 18,000 families, mostly those earning over $88,000 a year, will actually get less money each week, about $3 less on average.

About 200,000 working families, with a total of about 380,000 children, will be affected.

But the head of the Service and Food Workers' Union, John Ryall, said at the same time the Government was giving some working families a meagre boost, it was passing measures to make it more difficult for workers to get wage increases, like curbing collective bargaining.

"What our union is faced with is just an avalanche of the use of labour hire companies, contracting, sub-contracting, and more and more people faced with more and more insecure work."

Mr Ryall said the Government's push to make beneficiaries seek work when their youngest child turns three could also leave some worse off.

He said it would force them to compete with other workers for "pretty crappy" jobs and that was no way to make New Zealand a high skill, high wage economy.

"It is just a competition at the bottom end," he said.

National Secretary for Unite Union, Gerard Hehir, said people want the security of knowing that if they go to work, they are going to be better off.

"If we want people not to have to to be dependent on benefits, dependent on accommodation supplements, the state basically subsidising low wage employers, their wages actually have to go up to where it is a living wage - and we're a long way off that."

Susan St John.

Susan St John. Photo: RNZ / Kim Baker Wilson

The Child Poverty Action Group said the Government needed to do more to fix inequities in the Working For Families scheme.

Economics spokesperson, Associate professor Susan St John, from Auckland University, said what the Government had done was make an inflation adjustment to the in work tax credit component, which had not been touched since it was introduced in 2006.

"Unfortunately it hasn't dealt with the discrimination within Working for Families. Of course it is a good thing that some families will get more money, but the families on middle incomes, above the threshold, are going to find their in work tax credit disappears quite quickly."

The changes to Working for Families come into effect in April next year.

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