An anti-poverty group says the ACT Party is "out of touch" with the reality of being a beneficiary, following its deputy leader saying the party will return benefits to pre-COVID-19 levels if elected.
In an interview with Newshub Nation on Saturday Brooke van Velden said high paid public sector workers on "over-inflated wages" and beneficiaries would take pay cuts under ACT in order to lower debt for New Zealand post-COVID.
The highest jobseeker benefit rate one person can receive is $375.17 per week before other allowances like rental support and the Winter Energy Payment, but this is only for sole parents. In February the national median weekly rent was $515 per week.
As well as lowering benefits back to pre-COVID-19 levels, ACT would reinstall 90-day trials for businesses, stop minimum wage increases for three years, put interest back on student loans, scrap Kiwisaver subsidies and abolish the Winter Energy Payment.
When questioned whether the changes would disproportionately affect lower-income households, van Velden said no.
"All New Zealanders need to sacrifice. We are in unprecedented times in New Zealand's history… What we're talking about here is making a sacrifice for all New Zealanders so that we can have a private growth-led recovery," she said.
"We're making sure people will have jobs to go to when we go through this crisis."
Auckland Action Against Poverty spokesperson Brooke Fiafia told Newshub the proposal to cut benefits would only deepen New Zealand's inequality crisis.
"We already have a record number of people requiring food grants from WINZ because their benefits are too low," she said.
"It is naive to ask everyone to make sacrifices when some people have excessive amounts of wealth."
Research from the New Zealand Institute of Economic Research (NZIER) has shown increasing benefits would actually boost the economy.
The Multiplier Effect is an economic theory that suggests when you give lower-income people money, they will redistribute it through the economy, as they have a higher propensity to spend rather than save, creating a short term fiscal stimulus.
Welfare advocate and member of the Government's Welfare Expert Advisory Group Kay Brereton says the report shows there is "no reason" to keep benefits low. .
"There's no rational economic argument for keeping benefit rates low, especially when we're facing a COVID recession," she said in a statement on Monday.
"By raising benefits the government can ensure more money goes into local communities and local businesses because our people spend any extra money on the necessities of life they can't otherwise afford."
