Why RNZ can't be trusted

This reporting is amongst the worst I have seen. And it's funded by the tax-payer.

How much beneficiaries are left with after paying the rent

"Beneficiaries are living on an average of $251 a week once they've covered their housing costs, a government report shows.

A budgeting advisor says her clients are not getting by, and every day someone seeks help with KiwiSaver hardship withdrawals to cover the basics.

The Ministry of Social Development's total incomes report showed inflation-adjusted average incomes to April last year continued to drop, from $262 in 2024 and $263 in 2023."

Here is the source table from the report:

The RNZ reporter has described 'equivalised incomes' as "average incomes".

This is a significant error.

As the government report explains:

"Equivalisation means total incomes are adjusted by family size and composition to allow total incomes to be compared across families. Different scales were used for total incomes before and after housing costs."

To explain this process further, here is a table from the latest MSD Child Poverty Report:

This is a look-up chart to convert ordinary dollars (top row)  to equivalised dollars (lefthand column) for selected households.

The shaded cell shows that a 2 adult, 2 children household needs around $52,500 to have the same purchasing power as a 1 adult, 1 child household with an income of around $32,500. Each has an equivalised income of $25,000.

So one worker supporting a partner and two children and earning $52,500 would be said to have an equivalised income of just $25,000.

You can appreciate that equivalised incomes can differ greatly from actual incomes.

Then the RNZ reporter goes on to write:

"A full-time worker on minimum wage who made minimum KiwiSaver contributions would have earned $750.96 each week after tax, during the same period."

There is absolutely no point in this comparison because that income ($750.96) hasn't been equivalised, and no housing cost has been deducted. Except for the mortgage-free, everybody has housing costs - not just beneficiaries.

Why it was mentioned isn't clear. Unless to imply that beneficiary incomes are very low by comparison and that Paul Henry makes stuff up.

He didn't and I showed why his anecdote was entirely plausible yesterday.

Returning to the RNZ report opening statement, "Beneficiaries are living on an average of $251 a week once they've covered their housing costs, a government report shows." 

Most people will take this at face value but I have just explained why that is a mistake. And if the reporter understood the difference, it's an outright misrepresentation.

 

This is a look-up chart to convert ordinary dollars to equivalised dollars for selected households.

The shaded cell shows that a 2 adult, 2 children household needs around $52,500 to have the same purchasing power as a 1 adult, 1 child household with an income of around $32,500. Each has an equivalised income of $25,000.

So one worker supporting a partner and two children and earning $52,500 would be said to have an equivalised income of just $25,000.

You can appreciate that equivalised incomes can differ greatly from actual incomes.

Returning to the opening statement, "Beneficiaries are living on an average of $251 a week once they've covered their housing costs, a government report shows.". Most people will take this at face value but I have just explained why that is a mistake. And if the reporter understood the difference it's an outright misrepresentation.

Then she goes on to write:

"A full-time worker on minimum wage who made minimum KiwiSaver contributions would have earned $750.96 each week after tax, during the same period."

There is absolutely no point in this comparison because that income ($750.96) hasn't been equivalised, and no housing cost has been deducted. Except for the mortgage-free, everybody has housing costs - not just beneficiaries.

Why it was mentioned isn't clear. Unless to imply that beneficiary incomes are very low by comparison.