'More babies' seen as way to beat changes

A Hamilton budget advisory expert is warning solo mothers may opt to have more children in order to avoid Government requirements to find work when their youngest child turns 6.

Hamilton Budgeting Advisory Trust manager Clare Mataira said under the Government's proposed tax and welfare changes announced yesterday, struggling beneficiaries would do whatever it took to survive – including being paid under the table, not disclosing their true personal circumstances, and having more children to increase benefits and avoid Government work proposals.

"We are seeing a negative pattern and it's going to get worse with an increase in GST and further welfare reforms," Ms Mataira said. Yesterday the Government signalled a tougher stance on benefits as it attempts to bring what it says is the increasing cost of welfare under control.

But Ms Mataira was worried that increasing GST would only inflame the welfare burden where basic food items were the first thing to go when times got tough.

"People can't reduce their rent or their mortgage – they have to look at elastic costs such as food and then the family will suffer, particularly the children."

Ms Mataira called on the Government to cut GST on basic food items similar to the Australian system. "I have raised the issue with Government before but it has always been put in the too-hard basket."

Ms Mataira said record numbers of people had been through her doors in the past 12 months and yesterday's announcement would do little to stem that flow.

"We are seeing people living with extended family in squashed quarters – that puts pressure on families and relationships and the potential for stress and conflict increases. It's a direct response to the hardship people have faced during the recession."

- © Fairfax NZ News