Maori women MPs from Labour and the Greens perform an action song at Waitangi last week; but back home Maori and Pasifika have been some of the bigger losers during the Covid pandemic

Some of the gloss is starting to come off the Government’s Covid economic success story.

Data released by the Government yesterday shows that Maori and Pasifika have been the big losers since the Covid pandemic struck.

And both the Prime Minister and Finance Minister were yesterday hinting that fact may see them become a core focus of this year’s Budget.

Finance Minister Grant Robertson yesterday unveiled this year’s Budget Policy Statement which sets out the broad policy parameters within which the Budget will be framed.

Lifting Māori and Pacific incomes, skills and opportunities, and combatting the impacts of COVID-19 is one of the five core “wellbeing” priorities.

The others are:

  • Just Transition – Supporting the transition to a climate-resilient, sustainable and low-emissions economy while building back from COVID-19 2.
  • Future of Work – Enabling all New Zealanders and New Zealand businesses to benefit from new technologies and lift productivity and wages through innovation, and support into employment those most affected by COVID-19, including women and young people.
  • Child Wellbeing – Reducing child poverty and improving child wellbeing.
  • Physical and Mental Wellbeing – Supporting improved health outcomes for all New Zealanders and keeping COVID-19 out of our communities.

Alongside that, the statement said, things like housing could impact on several of the wellbeing objectives.

“Housing outcomes, for example, can be influenced across a range of the objectives: the sustainability of our housing stock will contribute to our Just Transition and climate change goals; Māori and Pacific communities currently have lower rates of homeownership and will benefit from more affordable housing, and improving children’s wellbeing will be greatly influenced by improving access to warm, safe, dry and affordable housing, as will physical and mental wellbeing,” it said.

But at the weekly post-Cabinet Press conference neither Robertson nor Jacinda Ardern had any real proposals to share to deal with the housing crisis and the challenges facing the Maori and Pasifika communities are immediate.

Robertson, in a speech yesterday, was celebrating last December’s surprisingly low unemployment figures, reminding his audience that Treasury last April had forecast unemployment possibly going into the teens or 20-percents, representing more than 350,000 people out of work.

“By then, we were already working to a simple plan for the economy – to deliver cashflow and confidence,” he said.

“We had already put in place the Wage Subsidy scheme, which eventually grew to support nearly 1.8 million jobs, allowing New Zealanders to stay in work.”

But a Treasury study analysed incomes of all employees in March 2020, and how they had changed for the same people by August. This work showed that Māori and Pacific workers were more likely to have dropped into a low-income bracket (of between $200 and $300 per week).

“The numbers of Māori and Pacific in this low-income bracket had increased by 85% and 69% respectively, while the number of Europeans in the low-income bracket increased by 27%,” it said.

“Most of the people in this income bracket were on benefits, although some remained employed but working reduced hours.”

Despite this data, the Budget Policy statement reports that researchers at Victoria University of Wellington found no overall changes in the wellbeing of families, levels of conflict or support among couples, or levels of parental satisfaction during the COVID-19 crisis.

The average score (7.8) for life satisfaction was the same for Europeans and Maori. And Pasifika rated their life satisfaction higher (7.9) while Asians rated theirs lower (7.8).

The Budget Policy Statement also found some perverse positive effects from the Covid pandemic.

“A more sustainable approach to tourism could deliver longer-lasting reductions in emissions if there is a shift in tourism patterns and the climate footprint as the sector recovers,” it said.

“Tourist activity generates approximately 7% of New Zealand’s greenhouse gas emissions, primarily via air and land-based travel.”

But overhanging everything currently is the housing crisis.

The Reserve Bank yesterday reinstated Loan to Value Rations back to where they were before the Covid crisis in a bid to try and restrain investor money overheating the market.

And from May 1 investors will need a 40 per cent deposit.

Nevertheless, the requirement for a 20 per cent deposit for a first home buyer will be another obstacle in the way of getting a house.

“This is exactly the reason that we are looking at every lever that we have because I understand what a hurdle that presents a first home buyer,” Ardern told her media conference yesterday.

“No one wants to live in a country where you the only way that you are able to get into a home is if your parents can help you into one because that just exacerbates the inequality we already have.

“And so that’s one of the issues that’s on our minds as we look to the things that we can do to tilt the playing field towards first-time buyers.”

The Government does have a $400 million Progressive Home Ownership Fund which is intended to help between 1,500 and 4,000 New Zealand families buy their own homes.

The Fund enables low to median income households partner with a progressive homeownership provider to access shared ownership, rent to buy, or leasehold arrangements to step into homeownership.

That model does provide us with some scope,” said Ardern.

“It would be a matter of needing to scale that up, though.”

Robertson said that Housing Minister Megan Woods was undertaking a piece of work to improve supply and how to improve people’s access to the market.

“I’m not saying that they’re specifically in it, but we are looking at all the options that are available,” he said.

Ardern admitted the Government faces a paradoxical situation.

By helping first home buyers to get into the market, the Government could end up stimulating demand further.

“We can’t necessarily pull one lever without it having a knock-on effect,” said Ardern.

“So that’s why we’re looking at all of them in conjunction.”

And as a way of making room for more first home buyers, it would not be surprising if the Government found more ways to crack down on property investors.

So though the Covid headlines may be positive, under the surface, there are looming challenges over Maori and Pasifika income levels and separately the runaway inflation in the housing market.

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