Jan Logie

Reflections from the ‘False Economy’ tour

by Jan Logie

Below is a presentation that was part of our ‘False Economy: The high cost of a low wage economy’ meeting in Auckland this week.

I was really moved by what Darryl had to say and wanted to make sure that other people had a chance to see what he shared with us. Please have a read of his speech, copied below.


Speech from Darryl Evens CEO of Mangere Budgeting & Family Support Services 03/04/13

These past few year’s many New Zealanders have experienced uncertainty in terms of whether they get to keep their jobs or due to the rising financial stresses that life brings. Many have had to seek social welfare or benefit support for the first time in their lives. Families and individuals are coming into services such as Mangere Budgeting & Family Support Services as they seek our support. Many believe the future to be bleak, some face homelessness, some face loss of employment but overwhelmingly most feel they no longer have a familiar and secure future; which is distressing for so many. Having to put your hand up and ask for help can be extremely embarrassing for many but I do not believe there is ‘whakama; in doing so. The Maori word Whakama means to be ashamed or embarrassed. I truly believe that putting your hand up today will mean the difference between feeding your children tomorrow or not

It is those working families who often earn minimum wage who are first at our door seeking help. The reality is that $13.50 an hour before tax simply is not enough to sustain a family and yet the government saw fit recently to reduce the youth rate down to $11.00 an hour for those between 16 and 19 years. I wish to remind John Key and Paula Bennett that many of these 16-19 yr olds are actually married people who are struggling to support families. $13.50 an hour wasn’t enough to live on; so what did they do, they reduced it even further.  Without the ‘working for families tax credit’, more of our families would be experiencing extreme financial hardship.

With the vast majority of our clients renting as opposed to owning their own homes; many are now telling us that they cannot sustain private rentals beyond 3-4 months. Many are only 1 or 2 weeks away from being evicted due to rising rental prices which is the very reason we are now seeing more than one family sharing a home. As families overcrowd our houses, our children are becoming sicker by the day. We all know that overcrowding often leads to respiratory illness and in some extreme cases they are also affected by diseases such as Meningococcal Meningitis, Tuberculosis, Rheumatic Fever and serious skin infections and lesions. As I see it, two of the major causes of child poverty are income inequality and poor housing. Most of the vulnerable families that we work with have been unable to access an affordable home, one which is dry and easy to heat and one where they have some security of tenure.

Of those families who have lost their homes due to the rising cost of living many have ending up in garages, cars, caravans and also in boarding lodges across South Auckland. Boarding lodges for the most part were designed to offer emergency accommodation to those who were trying to reintegrate into society following substance abuse, alcoholism or those recently released from prison but now the vast majority are housing individuals or families who simply can no longer afford private rental accommodation and so the lodges especially in Mangere are becoming the landlords to those most in need.

Of the vulnerable families we see in these lodges, most are living in overcrowded rooms, often paying as high as $240-260 a week for the privilege. A recent visit to one South Auckland lodge by myself and my Strengthening Families Coordinator saw 17 families living in cramped conditions, many of the children were suffering from scabies, coughs, colds, some had recently recovered from pneumonia and one particular child had recently had heart surgery and yet these rooms are small, their cold and most have mould on the walls and ceilings. I would suggest that the vast majority of these lodges should not be allowed to house families with children however many of these families tell us they had no other option on the day they lost their home.  Local government really does need to monitor and regulate these lodges. An important factor to be aware of here is that of those 17 families, 8 were in full time paid employment.

So as not to normalise these living conditions, I remind myself and others; that not so long ago ‘garages were buildings to house cars’. ‘Motor vehicles were modes of transport’. ‘Caravans were something we holidayed in’ and boarding lodges most definitely were not places we housed our needy families and their vulnerable children in.

Only 5 years ago, we all heard the tragic story Folole Muliaga who died in Mangere, South Auckland due to power poverty. A Samoan family who were unable to pay a $168.40 power bill and yet they were disconnected by their electricity provider along with thousands of others in the same year. It is a disgrace that working families, beneficiary families and also our pensioners are too scared to turn on the heaters as they fear these exorbitant power bills and yet the power prices continue to rise.

Food insecurity has also been a major problem for thousands of families across NZ. In fact Food Parcel Assistance has been our number one request on a daily basis during the past 24 months. Other Food Banks as well as Work & Income offices are inundated with requests for food assistance and yet for many of these working families they are often $2 or $3 a week, over the threshold to get the additional support that WINZ can offer.

The Department of Human Nutrition at the University of Otago estimate that to feed a family of 4, this is an adult male, an adult woman and two children, aged 14 and 5 years should be spending approx $240 per week on a basic diet and yet speaking with families coming into my organisation we are told that similar size families on average are only able to spend $83.33 per week on groceries, this is a deficit of $156.67 each week; this evidences the fact that some our children are going hungry each and every day. The stark reality is that 1 in 4 children living in NZ live in an impoverished home; that is between 240 and 270,000 children and yet 40% of these have at least one adult in the home, who works full time.  These are statistics that we should be ashamed of and yet we continue to give millions of dollars each year in overseas aid and also to NZ sporting groups and yet we have children in our own backyards; going hungry.

This is the very reason that working families are often forced to work between 60-70 hours a week simply to exist. When our children are working paper-rounds or taking on part time work in our supermarkets just to add a few extra dollars to the household grocery budget, then surely something has to be done.

One area that really must be mentioned is the cost of debt in NZ, particularly for working families on the minimum wage. Getting credit can often be far too easy for many of these who simply cannot afford the repayments. We see families borrowing money to pay basic living costs – these costs then blow out of all proportion; as we regularly see interest rates of between 498 and 535% on short term loans, and then on top of this; outrageous fees and penalties are charged for those who fail to meet their obligations. This is deepening the cycle of poverty and costing the government 10fold in dealing with the effects of impoverished communities; made so by the loan sharks who prey like piranhas on our most vulnerable. Families who work hard and budget well are undermined by unregulated controls on the cost of debt and this sends them over the edge. Debt and all its associated costs are a major factor for many of our families deemed vulnerable and living in poverty.

The causes of poverty as I see them are social and economic in nature, and are often outside the control of the individual or family. These may include:

  • High unemployment rates
  • Low wages
  • a lack of affordable housing
  • poor housing policies by Government
  • low accommodation supplements and
  • wider policy developments.

These problems require long-term policy solutions such as changes in the housing benefit system, in housing policy, the building of more affordable homes, and ensuring that a wider cross-section of society benefits from the fruits of economic growth by way of a livable wage. The minimum wage no longer cuts the mustard and people need to earn a wage that is sustainable for them and their families.

Increased private rental charges, higher power and energy prices, higher costs for food and dairy, higher road user charges and increased petrol costs etc etc…..without putting up wages (and I don’t mean by a miserly 25cents an hour) means that we are effectively making our people poorer and ultimately it is costing the nation millions in welfare dollars, which really is a false economy.

Published in Society & Culture by Jan Logie on Fri, April 5th, 2013   

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