a change in values

NZII fundamentally changes—even reverses—Aotearoa New Zealand’s welfare approach from ‘support based on need’ to ‘support based on prior income’. That’s massive. In general, if you lose your paid job and it’s covered by NZII, the more you have, the more you’ll get. 

The welfare system is broken – NZII is not the solution. Check out our vision.

The ‘user-pays’ ethos of NZII is a distraction from resourcing the welfare system to be fit-for-purpose. It discourages those fortunate enough to be included in NZII from solidarity with those who are excluded.

baking in exclusion

NZII risks further entrenching poverty and discrimination for Māori, women, Pacific people, disabled people, children and other marginalised communities. Large numbers of these communities (and others) will be excluded from the scheme, and left in poverty in our broken welfare system. Also, many low-paid workers will find the compulsory levies unaffordable.

If low-income workers lose their jobs they will find, even after paying levies, NZII support leaves them in or near poverty. People with a $100k salary can live on 80% of their previous income for a long time. People receiving $580 a week (~80% of minimum wage after tax) won’t have that luxury.

The additional support NZII offers, over and above current entitlements, is:

• better for non-parents/caregivers than for parents/caregivers
• better for high-income earners than for low-income earners
• better for workers with one employer than workers with multiple part-time jobs.

Yet all those people will be paying the same flat levy rate. Even MBIE acknowledges:

“This interaction with the current welfare system may make the system somewhat regressive.”

MBIE discussion document

“a total kick in the gut”

We recently saw some of the damage a two-tier welfare system can do when the precursor to NZII—the Covid Income Relief Payment (CIRP)—was introduced in 2020. Unlike our current welfare system, the CIRP was more supportive, with a narrow eligibility criteria, and was available to people in relationships.

Even though the CIRP offered more than our current welfare system, it was still inequitable. A higher proportion of Māori and Pacific workers’ applications were turned down, while benefit recipients—including caregivers, parents and disabled people who had been doing it tough with unliveable benefit levels—felt their ineligibility for the higher support as a “total kick in the gut that we were just devalued, as people. As human beings.“