Far from delivering any financial relief for everyday New Zealanders, these tweaks leave workers and beneficiaries grappling with rising costs, while the government prioritises billions of dollars for landlord and corporate interests.
On Thursday, RNZ reported:
Budget Day: Government looks to make its promises add up
Council of Trade Unions economist Craig Renney, who is also on the Labour Party's policy council, said the government did not have much to work with given it would not borrow more money.
"We're cutting government services at a time when we know there's increasing demand on those services," he said.
"We have an increasingly elderly population. We have increasingly higher needs in terms of health and education."
Now is the time, he said, to invest in the economy and inject some confidence into the economy.
…
In the budget, he will be looking out for how the government has chosen to use the savings from stopping the pay equity claims. He will also be looking at Treasury's estimates for what is happening to unemployment, wages and the cost of living.
"We've actually seen wages rising far less quickly than in the past, and we've seen two years of cuts to the minimum wage in real terms, and we've seen rising unemployment.
"If those trends continue, that will suggest that the medicine and the pain of economic change is really being borne by workers, in particular, low-paid workforces, rather than by others in the economy who might have broader shoulders."
As of April 1, 2025, the minimum wage inched up by just $0.35 to $23.50/hour…a mere 1.5% increase. For a full-time worker, that’s an extra $14 per week before tax, barely a dent against soaring living costs. The 2025/26 Living Wage, calculated at $28.95/hour, reflects what a person needs for a dignified life, not mere survival. That’s a 23.2% gap (or $11,336/year) between the minimum wage and a living income. In Auckland, where rents consume 50-60% of a minimum-wage earner’s income and power bills rise by $10/month, this increase doesn’t come anywhere near inflation. It’s effectively a pay cut in real terms.
The government’s talk of “balancing business needs” is a thinly veiled excuse for favouring corporate profits over workers’ livelihoods, forcing many into poverty or relocation abroad to find better liveable incomes.
Benefits fare no better. The 2025 Annual General Adjustment lifts main benefits like Jobseeker Support and Sole Parent Support by a paltry 2%, while NZ Superannuation gets a slightly higher 3% increase. A single Jobseeker receives roughly $290-$300/week, totalling $15,600/year. Even with the maximum Accommodation Supplement ($145/week in some areas), that’s just $22,620/year...far below the $40,476/year needed for a modest but liveable income. Sole parents, with Family Tax Credit, reaches about $27,300/year, still falling well short.
Superannuitants living alone now get $28,037.84/year, leaving them well below a dignified standard, particularly if they don’t own their own home. These gaps force families, pensioners, and disabled Kiwis to choose between rent, power, or food, while food banks report surging demand, even from working households. The government's new Rates Rebate Scheme for pensioners, meant to ease local council rates, is a flawed bandage. With complex eligibility, capped rebates, and rising rates because of the cancelled Three Waters scheme outpacing inflation, it will fail to deliver any meaningful relief for our struggling elderly people.
Raising the minimum wage to $28.95/hour would cost employers $1.61B annually, while moderately increasing benefits to $40,476/year for 1.1M recipients would cost $16.09B. These figures are affordable within New Zealand’s $140B budget, especially when compared to the billions funnelled into landlord and business tax breaks.
While workers and beneficiaries scrape by, business owners and landlords benefit from generous policy handouts that haven’t boosted the economy at all, while increases to minimum wages and benefits have been shown to boost the economy substantially. It’s time to prioritise the people over corporate profits, not just to ensure higher living standards, but to also give the economy the boost it needs.
The government’s narrative of “fiscal restraint,” with $5.3B in Budget 2025 savings, rings hollow when essentials like housing and food outpace inflation. Tying benefit increases to CPI or wage growth ignores these realities, deliberately keeping the vulnerable trapped in hardship. What’s needed is bold action: a minimum wage of at least $28.95/hour and benefits modestly raised to $40,476/year for a single adult. In high-cost regions like Auckland, workers may need a boost to $30-$32/hour.
Targeted subsidies for housing (in combination with a rent freeze) could also help, but incremental tweaks won’t suffice. This government’s cautious approach betrays Kiwi values. It’s time to support the workers and families who keep New Zealand running, not just National’s corporate mates and fellow landlords.