The Recession is Coming - But Who Will Be Hardest Hit?

Experience has shown that those who bear the economic brunt of a recession, and those who take the longest to recover, are our nation’s poorest. We may be out of lockdown, but low-income New Zealanders are not out of crisis, says The Salvation Army.

During the heart of our Covid storm earlier this year, the Sallies experienced a record surge in people seeking help for the first time—with over 10,000 new clients between 23 March-15 April, and almost 37,000 food parcels given out.

One of these people sent the Sallies a message about their firsthand experience: ‘I have never had to rely on help from a foodbank or anything like that before. Due to the current Covid-19 situation, my partner and I are unable to work and have been struggling financially. 

‘Someone mentioned The Salvation Army is offering a food parcel for people in need. I texted a number yesterday and someone rang me back today. Within two hours I had a box of groceries at my door.’

For thousands of Kiwis, these food parcels helped them get through the toughest times in their lives. But thousands more will be doing it tough for months, and even years, to come.

Food parcel requests remain at more than twice pre-Covid levels, and economists are predicting that we are in the ‘calm before the storm’, with many job losses still to come. ‘We expect another surge in food parcel requests in the next couple of months, especially when the wage subsidies end,’ says The Salvation Army’s Principal Policy Analyst Ronji Tanielu.  

‘Many people on low incomes are amazing at managing limited finances, but they don't have buffers. They may not be able to have savings, they don't have job flexibility. They don't have social mobility that other other citizens have,’ he explains ‘When a recession hits and starts filtering down through society, they are hardest hit. To use Covidian language, their “bubble of safety” is much smaller.’ 

Back in 2007, when the Global Financial crisis hit, the Sallies experienced a steady increase in demand that peaked a full decade later. ‘This Covid-19 pandemic will be exactly the same. Therefore, we should not and cannot settle for the new social “normal” emerging in New Zealand from this crisis,’ adds Ronjii.

The Army expects to see increased need across the board: job losses will put even greater pressure on the vice-like housing market as people struggle to pay their rent or mortgage; the long-term emotional toll will see an increase in addiction issues; and debt will spiral as low-income earners struggle to cover the basics.

That’s why we are in it ‘for the long haul’ with clients. When a person asks for help, a food parcel is usually just the beginning. The Sallies provide one-on-one assistance with budgeting, and help people address the underlying issues behind their debt. Our core work includes help with housing, addictions, problem gambling, loss and grief, and relationship issues.

When you donate to The Foodbank Project, you are doing so much more than putting food on the table. You are helping a person begin their long-term recovery,  so they can rebuild their ‘bubble of safety’.