Much of the news about the global economy is bad, and pain certainly is being felt here as Hawke’s Bay people check out of supermarkets, pay for petrol and buy fertilizer. The elderly and others on fixed incomes, people lacking skills and education, the unlucky in real estate and other ventures are the worst off, but the outlook is not completely dire.
The indicators of an economic slump include increased unemployment; more people in need of food, housing and public support; decreased sales of goods and services; a drop in construction; a rise in crime; more need for healthcare. Looking around Hawke’s Bay right now, these indicators are present, but not alarming – not yet.
Unemployment is up slightly, compared to last year, although some of this is seasonal. Hawke’s Bay’s economy is based heavily on pastoral, agricultural and horticultural activities. After the annual harvest, unemployment increases. According to the Ministry of Social Development (MSD), this past June 776 Hawke’s Bay residents of working age were receiving unemployment benefits (up 15% from last year). Of these, 648 people had been receiving that benefit continuously for less than one year (up 26%). About two thirds of the people on the benefit are men and 58% are Maori.
Murray Douglas, head of the regional Chamber of Commerce, says the Bay’s unemployment rate is a little higher than the national rate – 4.5% compared to 3.9% nationally this past June. However, Douglas said, local employers are still looking for skilled employees, such as boilermakers, accountants, salespeople and motel housekeepers. In a recent report to the Napier City Council, economic consultant Sean Bevin wrote that 37% of the city’s firms surveyed reported some difficulty in recruiting skilled staff for their businesses.
Hastings and Napier represent the region’s major employment market. About half of the people who work in Hastings live in Napier and vice versa. As the rising price of petrol created “recruitment resistance” to travelling, the Chamber and the Hawke’s Bay Regional Council proposed an express bus service between the cities for commuters. That new service is now underway on a pilot basis. Not only will it save commuters money, it will save petrol and benefit the environment, Douglas said.
Although largely rural, Hawke’s Bay is no bucolic backwater. In a nation with a still heavily land-based economy, the Bay produces 3.5% of the annual Gross Domestic Product (GDP), five to six billion dollars worth of meat, wine, fruit, vegetables and manufactured goods such as glass display cabinets and electronics. Much of this goes to export and is vulnerable to vacillations in the dollar exchange rate, which until recently has not favoured exporters. And last season’s drought will have a long-term effect on some of the Bay’s major producers.
Then, too, the rising prices, the spate of investment company crashes at home and uncertain financial situation abroad are spooking consumers. This shows up in fewer sales of vehicles, houses and general goods, all of which are currently “under strain” in the Bay, according to the regional Chamber. This has a financial impact on the dealers of such and, ultimately, on employment. The higher prices also make life considerably more difficult for financially-strained consumers.
To understand how difficult, consider this: according to Statistics NZ (2006 census), half the Bay’s working age people had an annual income of $22,600 or less. For Maori in our region fully half have an annual income of $19,100 or less. A household with two full-time workers will have twice the income. Some relief is furnished by the Working for Families program, which delivers tax credit payments and accommodation supplements to eligible families. These are in addition to other benefits delivered by the Ministry of Social Development.
According to the MSD, at the end of June 2008, in the Hawke’s Bay region 11,450 people of working age (18-64) were receiving “main” benefits, compared to 11,409 people a year ago. Main benefits include the unemployment benefit and also cover sickness, hardship, those taking care of the sick and infirm, sole parents, women alone, independent youth, invalids and widows, transitional retirement benefits and emergency benefits.
To help people on low and fixed incomes deal with rising costs, the MSD has just increased the limits on special needs grants, which provide one-off assistance to meet “essential and immediate” needs for food, health care, medical aid and other emergencies. These grants now are available twice a year to low-income families and to people already on other benefits or superannuation. The dollar limits on food grants are based on family size and range from $200 up to $550. The maximum special needs grants for other emergencies have increased to $500, up from $200.
In spite of this government assistance, municipal and charitable organisations that provide emergency help are seeing an increase in demand for their services. Food banks are giving out up to 25% more emergency food parcels. The Age Concern office in Hastings says fewer elderly people are coming to their social programs even though the bus trip is subsidized; some have been staying in bed all day because they cannot afford heat. Napier Community Services report a 40% increase in referrals for family social work. The Salvation Army office in Napier estimates demand for food and furnishings has doubled over the winter. The Maori health clinic in Maraenui, Napier, is seeing an increase in complex cases, particularly among children, and attribute this to “the social determinants” that affect children: lack of warm homes and good food and increased family stress.
Hastings Christian Lovelink, which provides furniture and housewares to those in need, writes in their June report: “It amazes me of the need in the community and in some cases the need has been so great to the point where it tugs at the hearts of our volunteers.”
The numbers might be small, but the problem is real.
Next article: What is the housing/homeless situation in Hawke’s Bay? A third article will look at social conditions.