How the Wellbeing Budget 2020: Rebuilding together, helps with personal debt problems
Everybody and every organisation should have a budget and regularly review it, whether it’s a business, household, sports club, or the New Zealand Government.
It may seem a bit mind-numbingly boring when the Government announces its annual budget every May, but it does give us insights into the plans and opportunities that are around the corner.
The Wellbeing Budget 2020: Rebuilding together was rapidly changed in response to Covid-19 and indicates further support for people who are the most vulnerable.
There are always critics of every budget because what one person thinks is a top priority may not be a view shared by others, just like members of a household negotiating over expenditure.
Debtfix has looked at the Wellbeing Budget 2020 and considered how it will help people struggling to stay afloat in a flood of debt.
Pre-budget Government expenditure in response to Covid-19 lockdown
The unexpected did happen and the New Zealand Government had to provide funding for wage subsidies, tax relief support for small and medium enterprises/businesses (SMEs), and increased healthcare costs.
You can read more about the specific support for wage subsidies, employers, employees, and businesses on Debtfix’s Covid-19 webpages.
Therefore, the starting point for the 2020 budget had moved considerably from when the Government would have been planning prior to February 2020.
Also, the targets have changed with the focus on putting money in the pockets of those who need it most and protecting our most vulnerable New Zealanders.
New Zealand Wellbeing Budget 2020 supports those at risk of family violence
Unfortunately, many people continue to live in threatening and violent situations because they cannot afford to leave, or they don’t have access to the appropriate family violence support.
The Debtfix crew regularly gives advice to people struggling with debt when a relationship breaks down and we can find financial solutions to reduce the anxiety caused by debt.
The 2020 budget provides more funding to organisations at the coalface of family violence and Dr. Ang Jury, chief executive of Women’s Refuge says: “Numerous people have worked a very long time in order for this investment in family violence services to become a reality.
“This is a very welcome shift in the funding of family violence services and recognises the pressures we face in delivering services in the face of unrelenting high demand.”
There is help available for people and they should always feel they and their tamariki are living in safe homes. The budget also provides funding for prevention of family violence and Shine’s acting general manager Sally Ward says the Government’s Budget initiatives take a more comprehensive approach than previously.
“Family violence will never be stopped without a focus on prevention,” says Ms. Ward.
Shine runs No Excuses, a stopping violence programme for men helping them change their behaviour and build respectful, non-violent relationships. Please do not let money problems and debt keep you in an unsafe relationship.
New Zealand Wellbeing Budget 2020 addresses child poverty
The economic fallout from the Covid-19 lockdown will mean more children in New Zealand living below the poverty line.
The greatest way to prevent this is for the parents and guardians to have employment and the budget aims to boost “job creation through support for infrastructure, conservation, employment schemes, and skills training.” These jobs are not instantly appearing, and people need to stay alert for employment opportunities.
For example, funding to the Department of Conservation (DoC) will create almost 11,000 new jobs around the country and it is expected that recruitment for these positions will commence in mid-2020.
The new positions will be advertised by DoC partners who will lead these initiatives and interested people should check the career pages of local and regional council, iwi, Landcare Trust and QEII National Trust. You could have a look at DoC careers, too.
Debtfix understands that many people have lost and will lose their jobs, the money may not be coming in until you can find a job and the debt collectors are at the door.
On May 25, 2020, the Government launched a new temporary income support scheme for employees who lost their jobs as a result of Covid-19, so you need to check your entitlements for that. The MSD has an online tool as an easy means of establishing what entitlements might be available.
If you need any help in working out what you may or may not be entitled to then contact us to talk about your options and we will give you FREE advice to provide some light at the end of the tunnel.
Importantly, if you need to take a break from job hunting for your mental wellbeing then do so. Applying for jobs can be overwhelming and taking time out to do something you enjoy should be an essential part of your strategy.
New Zealand Wellbeing Budget 2020 supports improved financial capability
Debtfix strongly advocates for improved financial capability and co-founder, Christine Liggins spends a significant amount of her time teaching financial mentors and has written various financial literacy programmes.
We were pleased with the budget announcement that the Government will be “improving and increasing funding for a core service provided by the Ministry of Social Development to improve financial capability and resilience of vulnerable people.”
The increased funding will help budgeting services throughout Aotearoa. You can find a local budgeting service here.
Increased funding to care for children
The 2020 budget aims to support families and the Government is “improving and increasing funding for Out of School Care and Recreation Services (OSCAR).”
The before and after school programme gives parents greater flexibility to undertake employment or training to gain new skills that are in demand. Families can click here for information about applying for the OSCAR subsidy.
Budget 2020 gives greater access to community law centres
Access to legal services often goes to those with the deepest pockets however in New Zealand, Community Law provides free legal services to people who are vulnerable in some way.
The 2020 budget has increased funding to the service, which will support initiatives to “improve Community Law’s ability to improve access to justice for those who would otherwise be unable to afford legal support,” Community Law Centres O Aotearoa CEO, Sue Moroney.
Legal support may be necessary when managing debt and financial problems and Debtfix can refer clients to Community Law services.
Tax initiatives for businesses
The Government is using the tax system to cushion the impact of Covid-19 on the economy.
Business owners need to stay alert for policy and administrative measures introduced to increase cash flow and reduce compliance pressures on businesses.
These are designed to keep you in business and ride the waves in the short term.
These measures include:
The reinstatement of depreciation deductions for commercial and industrial buildings.
An increase in the threshold for provisional tax.
An increase in the threshold for writing off low-value assets.
A time-limited discretion for the Commissioner of Inland Revenue to remit use of money interest (interest charged on the amount a taxpayer owes) if a taxpayer is unable to pay on time due to the impacts of Covid-19.
Budget 2020 infrastructure spending spree
The Government has allocated a further $3 billion, from the $12 billion of funding announced in January 2020, for infrastructure projects. To-date these have not been identified but there is an expectation that the Government will prioritise shovel-ready projects that will increase employment.
The Provincial Growth Fund is also being reviewed to accelerate the processes to get job-creation projects kick-started.
Budget allocation for re-training and up-skilling
The Wellbeing Budget 2020: Rebuilding together focuses on cushioning the blow and immediate recovery within New Zealand’s education sector. Investment will be made in New Zealand’s tertiary education sector, specifically funding trades and apprenticeship training.
There will be “support for free trades training in critical industries over the next two years to help people who have lost their jobs retrain, and also allow new employees in some essential services to train on the job.” – Tertiary Education Commission.
The fund will be available from July 1, 2020 and people who are interested need to consider what trades or vocational course would provide them with rewarding employment.
Proposed tertiary study areas are:
building and construction
agriculture
manufacturing
community health
counselling
care work
The budget allowed $20 million to support students currently enrolled in a tertiary education organisation with a student hardship fund to assist with financial problems caused by Covid-19. There is also budget funding to support employers with apprentices to ensure the apprentice has continuity in their training.
Wellbeing Budget 2020: Rebuilding together summary
A key learning from the impact of Covid-19 on our people’s financial and debt positions, is that things are likely to change frequently and be unpredictable.
While we can’t keep on top of all of the changes, all of the time – we can’t put our heads in the sand and hope “she’ll be right, mate”. Stay vigilant for opportunities, give yourself a break when you are over it all and keep working on your own budget, with the rest of the household all involved.
There are solutions to financial problems and mounting debt and talking with someone will help. Contact Debtfix: phone, 0800 DEBT 101, email helpline@debtfix.co.nz, or kick start the process by completing our online form now.