Radio New Zealand (RNZ), the state broadcaster, reported on July 17 that social services are experiencing an “alarming level” of poverty as families struggle with escalating living costs in the difficult winter. Four welfare agencies said they regularly hear of families sleeping in one room and turning off power as they try to stay warm and pay bills.
Charities are running special appeals to support families facing hardship. Presbyterian Support manager Grenville Hendricks said his organisation has been forced to help 800 fewer families after its government funding was slashed by $1.5 million as part of the National Party-led ruling coalition’s vicious cost-cutting program.
“It’s also a challenge when there’s been issues around benefit payments, there’s been reductions in the numbers of available social housing,” Hendricks said. His agency knows of families sleeping in one room and children sharing beds to keep warm, with people’s health suffering due to overcrowding and damp, mouldy houses.
Unaloto Latu, a mother from South Auckland, told RNZ there are a dozen people in her household and not enough beds. Three children sleep on couches in the living room. “Those three big chairs over here, our younger children sleep here... we know that sometimes it’s hard for them but they have no choice,” she said.
Latu’s injured husband has been off work for three years and their benefit is “always stretched.” She said their children “go without milk, meat and bathroom stuff, cleaning stuff,” and they wear worn-out clothes and shoes.
A welfare organisation sponsors Latu’s children for $50 a month each as a contribution to household costs. Power and internet bills are paid but dinner is sometimes just rice. The children receive school lunches through a government-funded private program, which has been criticised as grossly inadequate by nutritionists following cost cutting.
In a significant long-term indicator, the New Zealand Herald reported on July 19 that the country’s fertility rate dropped from 2.17 in 2010 to 1.56 per woman in 2023—a steep decline in couples having children due mainly to the cost of living.
The desperate conditions have disastrous consequences for young people. School principals recently warned that the number of school-leavers with no qualifications is set to spike in poor communities. Their warnings followed the release of nationwide literacy and numeracy tests held in May. As many as a third of teenagers leaving schools in Tai Tokerau/Northland and South Auckland could have no National Educational (NCEA) certificates—double the normal figures.
Papakura High School principal Simon Craggs said in the one-third of schools in the poorest areas, which are also the worst-resourced, just 34 percent of students pass the numeracy assessment, 41 percent passed reading and 35 percent passed writing.
Aorere College principal Leanne Webb told RNZ that young people leaving school without a qualification would be unable to access tertiary education and get “shoved to the bottom of the heap.”
Students from poor families frequently go to school tired and hungry, are often absent due to illnesses, have little access to books and nowhere to do homework. Many work jobs to support their families. In 2023 Tamaki College student Atareita told TV1: “The most hours I’ve worked in a school week is 47. Because my parents are sick, it’s only me and my sister and my uncle working as our main source of income.”
University students nationwide are also being forced to choose between heating their flats or eating proper meals, just to stay enrolled. Auckland University of Technology (AUT) Chancellor Rob Campbell told Stuff this week that many are juggling near full-time work on top of study, racking up debt for daily essentials, and giving up on food and basic comfort to get through the semester. While AUT’s hardship fund provides some support “it’s not enough,” Campbell said.
Some pensioners are turning off hot water cylinders for days to save money. Electricity costs have gone up almost 9 percent since June 2024. Pensioner Sally told RNZ: “I have a shower then and it stays off for three nights.” Her power bill last year was $85 a month but the most recent was $131.
Age Concern Canterbury CEO Greta Bond said severe cold weather in Christchurch meant some elderly people would be staying in bed until midday. She said the government’s winter energy payment of up to $700 over five months was not enough to keep up with rising prices.
Bond added that some people were eating tinned food cold because of electricity costs. Others spend 80 percent of their pensions on rent, leaving very little left for food, heating, or going to the doctor.
Electricity is not the only staple being hit by escalating costs. Since June last year petrol has gone up by 15.5 percent and now retails for about $2.55 per litre. Food prices rose an average of 4.6 percent in the last 12 months, according to Statistics NZ. All these figures are much higher than the official inflation rate, which has jumped this month to 2.7 from 2.5 percent, a 12-month high.
The limited budgets of working class households are hit most severely. Poultry and fish prices jumped 6.4 percent over the year. Beef steak rose 22.3 percent and the average cost for a kilogram of beef mince was $21.73, up from $18.80 a year ago. Fruit and vegetable prices were up 5 percent.
Dairy products, while locally produced, are driving eye-watering costs. Milk was $4.57 per two litres in June—up 14.3 percent on the year before. Cheese climbed 30 percent to $13.04 per kilogram last month. According to the Conversation, “butter prices rose by 46.5 percent in the year to June and are now 120 percent higher than a decade ago. The average price for a 500g block is NZ$8.60, with some local brands costing over $10.”
Following widespread outrage over the impossible price of butter, Westpac economist Paul Clark told the New Zealand Herald that with Global Dairy Trade auction prices having “reached new highs, combined with a generally weaker New Zealand dollar,” retail prices will “ratchet higher in coming months.”
The looming effects on global trade of US President Donald Trump’s escalating tariff war—including 10 percent tariffs on imports from NZ—will have a further inflationary effect on goods internationally.
Poverty and hardship have not appeared overnight. The 2017–2023 Labour-led government presided over a sharp increase in those children living in material hardship—in families without access to basic necessities—by 6.4 percent from 135,000 to 143,700 (about 1 in 8 children). This was despite then Prime Minister Jacinda Ardern launching a “child poverty reduction law” to halve child poverty over a decade.
Escalating inequality provoked Labour’s massive defeat at the 2023 elections when it was deserted by working class voters. The current government has continued where Labour left off, imposing a brutal program of austerity and preparations for war abroad. Its measures include sweeping job cuts, attacks on public services and harsh attacks on welfare benefits, all while pushing ahead with tax breaks and legislative measures to benefit businesses and the wealthy.
Election promises made by the National Party that tax and welfare changes in its 2024 budget would benefit the “average” family by $250 per fortnight have proven to be a fraud. It was calculated that this applied to fewer than 3,000 households. A so-called FamilyBoost childcare rebate was supposed to provide $150 a fortnight of this money. However, just 249 families received it in the first nine months of the scheme.
Finance Minister Nicola Willis recently announced an expansion of the FamilyBoost payment, but said this would only lead to “up to 16,000 more families accessing the payment”—about 0.3 percent of the population.