7:53amSource: rnz.co.nz
The pressure is on for the Government to ease the "cost of living crisis" for struggling New Zealanders in today's Budget.

By Anneke Smith of rnz.co.nz


It has already signalled climate change and the health reforms as the two big-ticket and time-sensitive items.


However, budget services have told RNZ a financial hardship emergency is brewing as the winter months close in.


Lee-Anne Michelle has been working at the Clutha Budget Advisory Service for more than a decade.


Budgets are her bread and butter and she is used to helping those living on
the margins manage their money better.

But recently, she has seen a change in clientele: more households from the 'squeezed middle' seeking financial support.


Budget 2022 will be released at 2pm on Thursday, May 19. Watch TVNZ 1 from
then for the 1News Budget Special, hosted by Q+A's Jack Tame, and follow 1News.co.nz for the latest news.


"A new trend we've noticed is that we're seeing a lot of two-income families coming to us now who never used too.


"They're finding what used to work for them just isn't working anymore."


Michelle said these families are not laden with debt; the basics are just taking a bigger bite out of their incomes.


"After they've paid their essential costs, especially with things like childcare as well, there's just nothing left.


"And they're trying to find ways to make their dollar stretch further."

Kathryn (name changed) is among those who have sought help after high food
and fuel prices put pressure on her family's weekly budget.


"We've basically just had to completely relook at our spending and just look
at where we can save money.


"Just finding we're just getting to the end of every week and not having a
lot of money leftover for anything."


Michelle said rising financial pressure on the squeezed middle is a growing problem that will only get worse this winter.


"We're always approached over winter by families who fall behind with their power and get into arrears.


"We are worried about how these people will cope with winter with the fallout of the increased cost of living.


"They're already living week-to-week and have no spare money so buying or budgeting for firewood and power over winter is next to impossible."


Cara Keane is seeing the same cost of living crisis working as a financial mentor at the Central Hawke's Bay Budget Service in Waipukurau.


"We're seeing more families than we ever would have seen before where both couples are employed and before they felt like they had everything under control.


"Now, there's been a flow-on effect where there's more debt and they find
that they're drowning in that debt and with the cost of food going up they're having to choose what gets paid."


She said some people were having to draw on their KiwiSaver funds for
financial hardship reasons to keep up with debt payments.


"They're struggling, even just being able to manage to try to catch up with
$10 or $20 a week, so the next best option is to get some of the money out of their KiwiSaver just to clear the debt and get them back on track."


Statistics New Zealand reports food price inflation was 6.4 percent higher in April 2022 compared to April 2021 while petrol is now well over $3 a litre in Auckland.


The Government has signalled big spending on climate change and the health reforms and already boosted benefits, superannuation payments and family tax credits.


However, people like Kathryn say they need more support and she is not sure
it will be delivered in today's Budget.


"I don't really know if it will [help]. I guess we'll just have to wait and
see whether it makes a difference for us or not."


Budget 2022 will be released at 2pm today.

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