New Zealand lifts welfare benefit rates amid rapid economic rebound
New Zealand raised welfare benefit rates on Thursday and vowed to produce billions of dollars more to address rising inequality in its annual budget, as the country forecast smaller deficits and a rapid economic recovery from the coronavirus pandemic.
New Zealand’s 2021 budget allocated big funds towards increasing the weekly benefit rates by up to NZ$55 per adult, which the government considers as the largest income increase in a generation.
Along with the weekly benefit rate hike, the government also allocated funds towards housing, healthcare, education, and infrastructure, while also targeting issues like child poverty, climate change, and the welfare of the indigenous Maori.
According to the Treasury, the country’s budget deficit will hit NZ$15.127 billion ($10.84 billion) for the fiscal year ending June, lower than the NZ$21.576 billion projected in its half-year fiscal update in December.
Moreover, the deficit peaks at 5.3% of gross domestic product (GDP) in June 2022 before falling to 0.6% of GDP by June 2025 while net debt will peak at 48% of GDP in 2023.
New Zealand’s GDP was projected to hit 2.9% in 2021 and gradually grow to 4.4% by 2023.