Budget 05 ? Promising and Disappointing

" This years budget does have quite a bit of good news, but it is also disappointing in its response to some key social issues, in particular homeownership, our poorest children, and residential care services," said Major Campbell Roberts, Director of the Salvation Army Social Policy and Parliamentary Unit.

Kiwisave is a welcome encouragement to New Zealanders to be involved in saving for retirement but The Salvation Army is disappointed in the provisions regarding homeownership. Extension of the Mortgage Insurance scheme and the Kiwisave scheme will certainly be of some help, but both schemes will be of limited assistance to many low income households in major metropolitan areas, with high house prices. Low income households will also find significant difficulty in contributing 4% of their income to join this retirement and homeownership scheme,"said Major Roberts.

"The budget has ignored other proven homeownership options such as equity share. An equity share scheme would have enabled far more households into homeownership over a shorter timeframe. We need a range of schemes to meet the diverse housing needs in New Zealand. We are disappointed that a greater number of options were not included in the budget."

The Salvation Army is also uncertain whether the new funding made available to District Health Boards for disability services will help address chronic under funding in the residential care sector.

"Many not-for-profit residential care providers, including the Salvation Army, have been or are being forced out of providing this kind of care because of long term under-funding by government. The 32 million extra announced today has the potential to assist and is welcome, but it is not clear if all this money will go to residential care, this seems to be at the discretion of DHBs. If this money doesn't flow through to rest home care, this essential service will become even more insecure into the future" said Major Roberts.

The Salvation Army also has some concerns about the governments Working for Families package which continued to be rolled out through today's budget.

"Although we do recognise that this package is the biggest hit back against poverty for many years, we are increasingly concerned about they way in which it discriminates against our poorest children - those living in beneficiary households. We are also concerned that the push to have most DPB, sickness and invalids beneficiaries in work will see some people locked into inappropriate, unstable, or low quality employment that places stress on families and does not raise them out of poverty," commented Major Roberts.

The Salvation Army Social Policy and Parliamentary Unit acknowledges that there are several promising or positive aspects of the budget.

The raising of the thresholds for tax, especially at the bottom level, and the regular CPI indexing of these thresholds is viewed as a very sensible and positive policy, especially for low and fixed income households. The Salvation Army is also pleased to see increased funding to support social housing, prevention services in the area of drugs, alcohol, and mental health, the rates rebate scheme, early childhood education, OSCAR programmes, legal aid and rehabilitation for offenders.

"Older people, and those with addictions or mental health problems, are some of New Zealand's most vulnerable people and this additional support will be helpful. Early childhood education, and childcare also make a huge difference to families, making this more accessible and affordable is vital," commented Major Roberts

"We are very pleased to see increased spending for legal aid and rehabilitation for offenders. It is important that everyone has access to justice and that we do more to prevent re-offending."

"This budget provides some positive funding boosts to a number of programmes. But we are disappointed that the government did not do more to address some of the bigger social issues. It was a budget that both promised and disappointed. We will be looking for renewed emphasis on the areas that disappointed this time, in any future policy or funding announcements," concluded Major Roberts.

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