The Salvation Army has issued its second Covid-19 monitoring report, urging the government to take action.

A month ago, The Salvation Army began monitoring the effects of Covid-19 on vulnerable New Zealanders. Today, the organisation has come to the conclusion that an emerging “Covid-19 underclass” needs urgent and radical government intervention to prevent further distress.

“New Zealand cannot rely as it has in the past on government and charitable supported, community-based food banks to meet this new food demand,” says The Salvation Army. “The opportunity of this crisis is to break out of the cycle of food poverty and create a society where no one goes hungry, based on social, economic and welfare responses that are sustainable, structural and mana enhancing.”

The report states that before the pandemic, New Zealand was facing social and economic issues that have been heightened by Covid-19 and our response to it.

However, it says the way we respond to the crisis could mean more than a short-term fix; it could result in long-term change for many New Zealanders. “This could be a time of reimagining, re-casting and developing new and innovative ways and frameworks to address these pressing social issues,” it says.

The report separates key issues out into five categories: food security, financial hardship, addictions, housing, and income support and employment.

Food security

According to The Salvation Army’s report, the Ministry of Social Development paid out almost 70,000 special needs grants for food in the week leading to April 10, which is more than three times the weekly average during January and February of this year. In the first three weeks of lockdown, around 85,000 additional food hardship grants were paid out.

The report on this issue contains one key insight: “Many of the people The Salvation Army and others are helping right now would not need this help if their income was adequate.” In the last week, The Salvation Army delivered 5,895 food parcels; a 346% increase from the week prior to lockdown.

Areas with the most demand for food parcels are Auckland and the northern region, but the largest increase over lockdown has been in the lower North Island, where there was a 10-fold increase in demand in the week leading up to April 14 compared to only a month earlier. Over the past month, more than $1.7 million has been donated by New Zealanders to the food bank project.

Addictions

Services for alcohol, drug and gambling addiction connected with The Salvation Army are operating below capacity due to lockdown protocol; there are significantly reduced referrals, and it’s difficult to arrange residential programmes while abiding by the rules. The report says negotiating with DHBs to provide safe pathways into treatment has been problematic, but that some centres are now starting to accept clients.

In some good news, reports from addiction support workers indicate that a large number of their clients are doing much better in lockdown conditions. “Reduced access to alcohol and other drugs is making it easier to maintain stability and clients are reporting less use of alcohol or other drugs. Isolation from other people who use alcohol or other drugs, including drug dealers, has also been a stabilising factor.” The same has proved true for those with gambling addictions.

The report warns that there will likely be a significant increase in demand for addiction support once lockdown ends. Therefore, it recommends an urgent, comprehensive investment in both mental health and addiction services.

Housing

The Salvation Army’s report repeats what others are saying: the pandemic and the recession that follows it will only make the housing crisis more difficult to bear. It anticipates increased demand for social housing, transitional housing and accommodation supplements; however, the current lockdown means construction on social housing has been delayed.

The government response to housing pressure created by Covid-19 in the past month has been the requisition of 962 motel units, a six-month mortgage and interest holiday, and a freeze on residential rent increases plus protection against evictions. As a result of both the motel room availability and the return of individuals to their families for the lockdown period, The Salvation Army has seen decreased pressure on its housing services.

Despite this, one frontline worker reported feeling personally endangered in their role as a housing support worker due to some clients not observing or understanding isolation rules. “The ongoing struggle for PPE for Epsom staff has been stupidly hard, and the DHBs have been negligent in managing this supply,” reads the excerpt. “In one of our hostels, staff over the last four weeks have had 100 people a day to cope with in their bubble.”

The report recommends more comprehensive housing policies that look to address the next five years, and points to the upcoming budget as an opportunity to do this. It suggests that a plan moving forward could include: a national progressive home ownership programme, giving all households with an income over $60,000 the chance to own a home; the creation of a public supply of new homes for renters that would be owned by community-owned housing associations; and a significant social house-building programme.

Income support and employment

Jobseeker numbers increased by 26% in just three weeks, reaching 103,509 by April 10. Treasury’s best-case scenario estimates that unemployment could stay below 10% this year before decreasing. That’s still more than twice the unemployment rate recorded last year, and according to The Salvation Army it’s around 270,000 people unemployed.

Frontline reports indicate that support for workers in tourist hotspots like Queenstown isn’t sufficient. Many of these workers are from overseas, and have work visas that don’t allow them the same flexibility of work that New Zealand residents have. Housing and food costs in these areas are also higher than average. More than 200,000 workers in New Zealand are on temporary work visas, and The Salvation Army suggests those on short-term work visas should have access to full welfare support throughout this crisis.

The Salvation Army says the upcoming recovery budget will need to address welfare support for a much larger group of people, including a disproportionate number of Māori and Pacific people who will need approaches that reach their communities effectively. 

Financial hardship

MoneyTalks, a free financial helpline, saw an initial surge in calls as New Zealand entered alert lockdown. It reports that demand has now settled a little, but it still received 291 calls last week; more than double the number of calls it was receiving weekly before lockdown. 

In its first Covid-19 monitoring report, issued two weeks ago, The Salvation Army described government action surrounding financial hardship as muted and lacking strategy. It suggested expanding core welfare assistance, and pointed out the current Jobseeker payment, at $281.08, is less than half of the $585.50 offered by the wage subsidy programme. 

The Salvation Army would specifically like to see more government guidance around car loans, payday lenders and credit cards. “These types of debts can, coupled with uncertain economic times, compound and cause increased stress and hardship,” says the report.

It suggests stronger regulation around consumer lending, and recommends the approach of the UK’s Financial Conduct Authority, which includes a mandated three-month payment freeze for credit cards and personal loans to all banks and finance companies and an interest-free overdraft of up to £500 for three months.

The report is generally positive about responses from the financial and energy sectors to their clients’ financial hardship, but also says “the products and responses they are offering are disjointed and are essentially a scatter-gun approach to assistance with huge variation”.

The report also calls for further policy discussion around wealth tax, debt amnesties and income support.