This week more than two million New Zealanders are expected to receive roughly $116 (£60) in their bank accounts as the government paid out the first instalment of its cost-of-living payment. A further two instalments over the next two months have been promised to those earning below $70,000 (£36,000).
These payments are part of a plan by Prime Minister Jacinda Ardern to address the soaring everyday costs Kiwis are facing. Speaking yesterday, she declared that the grant would help New Zealanders through the ‘peak of the global inflation storm’.
But, it seems that something of a blunder has occurred. Speaking ahead of the funds being paid out, Revenue Minister David Parker revealed it was possible that thousands of people had received the cost-of-living payment in error.
New Zealanders living overseas have received letters saying they qualify for the bonus, despite not being New Zealand tax residents. Working holidaymakers, students and other short-term visa holders who have moved home have also reported getting the email on social media.
This isn’t the first time the reach of Jacinda Ardern’s government has exceeded its grasp
Among these are a man who left in 2014 and is now living in India, and a French former worker now living in the Philippines after leaving New Zealand in 2019.
One person wrote: ‘[Inland Revenue] emailed me saying they are going to give me money. Great! The only problem is that I don’t actually live in New Zealand and haven’t stepped foot in the country in more than two years.’
New Zealand expats in the UK have also received the letters, with some expressing their surprise online at qualifying for the payment. Some even planned to opt out.
Safe to say, the Kiwi government is struggling to contain the fallout. The opposition National Party has accused the Labour government of spraying taxpayers’ cash around the world to undeserving expats.
The deputy leader of the opposition, Nicola Willis, blasted it for having ‘stuffed up on a major scale’ and said it was ‘as if the government had just pressed “send all”.’
Parker admitted it probably would never be known exactly how many people now based overseas had received the payment. ‘We’re not sure of the exact number,’ he said, adding an aphorism that precisely no one in history has or would ever want to hear from a minister responsible for revenue and statistics: ‘You don’t know what you don’t know.’
Nevertheless, he speculated it was about 1 per cent. That would translate to more than 20,000 people once the full 2.1 million payments are made, and about $7.35 million (£3.78 million) likely to have been paid out in error.
For context, were a similar program rolled out in the UK, with approximately 30 million people receiving pay-outs, a similar discrepancy, at scale, would equate to about 300,000 people inadvertently receiving money.
According to Ardern’s government, the alternative would have been to make the 2.1 million people apply and consider those applications one by one – which they viewed as incredibly costly.
Nevertheless, despite concerns over costs, Inland Revenue has since confirmed that, on logistical grounds, it would not pursue people who wrongly received the money. Therefore that money is never coming back.
The program was designed as a quick and practical response to inflation. But in May, before the payment was announced, ministers were told by officials that high inflation was expected to persist, and that the one-off payment was an ineffective mechanism for supporting households with longer-term problems.
This isn’t the first time the reach of Jacinda Ardern’s government has exceeded its grasp. For one, its flagship housing policy ran aground. Labour claimed its ‘KiwiBuild’ scheme would solve the country’s housing crisis – instead, just 1,366 homes have been built out of the 100,000 promised.
New Zealand’s borders have begun reopening to the world. Ironically, many Kiwi nationals might be feeling slightly rueful of their decision to stay put, missing out on a community chest ‘banking error in your favour’ style dividend whilst roaming abroad.
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