Changes announced in Budget 2025 will do “little” to improve the lives of financially struggling clients of a Bay of Plenty household budgeting service, the manager believes.

Another says “bits and pieces” may help but it is too soon to say.

Finance Minister Nicola Willis delivered a growth-focused Budget last Thursday, including changes to KiwiSaver contributions and tightening young jobseekers’ benefit eligibility.

The Government is raising the default level for KiwiSaver employee and employer contributions. It also halved the Government’s maximum contribution for individuals to $260.72 a year and scrapped it entirely for those earning $180,000 more.

Also announced were a tax incentive for businesses forecast to cost $6.6 billion, longer-lasting prescriptions and tweaks to Working for Families tax credits.

Bay Financial Mentors general manager Shirley McCombe told the Bay Plenty Times the Budget unfortunately ”does little" to significantly improve the lives of the people her team work alongside.

McCombe said she strongly believed more young people should be encouraged to join the KiwiSaver scheme, particularly those just entering the workforce.

“However, reducing government contributions while increasing personal and employer contributions is not the way to achieve this.”

She said it shifted the financial burden to individuals, cutting into their income when many were already struggling.

“Having said that, I’m pleased 16-and 17-year-olds will now be eligible for [KiwiSaver] government and employer contributions. These young investors have the greatest advantage — time — and when it comes to investing, time is gold."

She said the decision to reform pay equity initiatives was “incredibly disappointing”.

“This is yet another setback in the fight to close the gender pay gap and address the disparity in retirement savings for women.

She did not oppose income-testing tax initiatives such as Best Start, but believed setting the family income threshold at $97,000 was “unreasonably low”.

“Many families earning this amount are already struggling under current economic conditions.”

McCombe said introducing parental-assistance means testing in July 2027 for 18- and 19-year-olds seeking the Jobseeker Support and Emergency Benefit presented “serious” challenges.

“Particularly in cases where relationships with parents have broken down. This approach risks leaving some young people without the financial support they need.”

She said expanding access to 12-month prescriptions for chronic medications could help lower costs for many patients by reducing doctor visits and dispensing fees.

However, McCombe said this approach may also lead to decreased medical oversight.

Rotorua Budget Advisory Services manager Pakanui Tuhura. Photo / Andrew Warner

Rotorua Budget Advisory Services manager Pakanui Tuhura said it was difficult to say whether the Budget’s changes would make a significant difference for clients, as their circumstances and needs ranged widely.

What Tuhura could say was that the number of people seeking help steadily increased each year, and included working people.

A lot more people in financial difficulty were applying to withdraw their KiwiSaver contributions on hardship grounds.

“Because of the cost-of-living increases and inflation, some people are also finding it difficult to keep contributing to the scheme, which was supposed to be for retirement savings and future expenses.”

He said last year the service assisted about 900 households.

“Most of our clients are aged between 18 years and 45 years, typically most of our clients are women.”

 Regarding benefit eligibility changes for young jobseekers, he said most of the service’s younger clients were living independently from their parents.

“There are bits and pieces in this Budget that will help some of our clients such as fewer prescription charges, but again, it depends on people’s financial situations and household make-up.

“This is a top-level Budget, whereas we are working with clients at a grass-roots level. I think it’s going to be a few months before we see how the impacts of this Budget shapes up.”