Budget backlash grows over rents, poverty and Pacific family hardship

Advocacy groups say Budget 2026 will leave many low-income families worse off, warning that rising rents, reduced hardship support, and ongoing cost-of-living pressure will hit Pasifika communities especially hard.

While the Government has promoted the Budget as focused on growth and stability, child poverty advocates and anti-poverty organisations say the measures announced do little to help families already struggling to pay for food, housing, power, and transport.

The strongest criticism centres on changes to housing support and welfare assistance.

The Government plans to increase income-related rents for public housing tenants from 25 to 30 per cent of household income. Around 84,000 households are expected to pay about $31 more each week on average.

For many Pacific families in Auckland, where housing pressure remains severe, advocates say the increase will deepen financial strain.

Child Poverty Action Group (CPAG) says the Budget fails to meaningfully reduce child poverty despite the Government’s own targets.

“Budget 2026 contains few short-term relief measures, but it falls well short of the transformational change needed to ensure every child in Aotearoa can thrive,” the group said in a statement.

CPAG also raised concerns about cuts to Temporary Additional Support, one of the main emergency supports available to struggling households.

“At the same time, the Government is reducing access to Temporary Additional Support (TAS), one of the few mechanisms available to families facing acute hardship,” the group said.

Advocacy groups warn changes to public housing rents could hit Pacific and South Auckland families hardest during the ongoing cost-of-living crisis. Photo/Supplied

Auckland Action Against Poverty (AAAP) says communities across South Auckland are already seeing growing hardship.

Coordinator Agnes Magele said many families are being pushed further into survival mode.

“For the last few years we have watched cuts, sanctions, barriers and harmful policy changes hit the very people already struggling the most - Māori, Pasifika, disabled people, solo parents, beneficiaries, workers on low wages, and now our children are carrying the weight of these decisions too,” its statement read.

Magele said many whānau are already being forced to make impossible choices.

“Our kids are growing up watching their parents skip meals, choose between petrol or power, work multiple jobs while still drowning in debt, and fight daily just to survive systems designed to wear them down.”

AAAP co-chair Elliot Crossan also criticised the Government’s wider economic direction, accusing it of worsening inequality during a cost-of-living crisis.

Listen to Agnes Magele's earlier interview with William Terite on Pacific Mornings on the Government's answer to soaring fuel prices below.

Meanwhile, Save the Children New Zealand warned the Budget offers little immediate relief for families relying on welfare support.

Jacqui Southey, its Advocacy director, said many households are still struggling with basic living costs.

“For families reliant on welfare who are already making difficult choices every week about whether to warm their homes, pay for fuel or put nutritious food on the table, sadly Budget 2026 does nothing to make life easier," her statement said.

Save the Children also warned young people are increasingly anxious about jobs and education costs, with youth unemployment now sitting at 15 per cent nationally.

The organisation did but welcome continued investment into school lunch programmes and breakfast support, saying food insecurity remains a growing issue for many children.

Save the Children's Jacqui Southey says continued investment into school lunch and breakfast programmes remains critical as more families struggle with food insecurity. Photo/Supplied

The criticism comes as Treasury forecasts continue to show New Zealand is unlikely to meet several of its child poverty reduction targets by 2028.

For many Pacific households already facing high rents, overcrowding and rising living costs, advocacy groups say the Budget risks widening the gap between struggling families and those financially secure.

They argue the coming months will test whether community support systems can keep up with growing demand as economic pressure continues to rise across Aotearoa.