Budget 2022: $350 cost of living payment 'crumbs' - Hickey

Source: 1News

The cost of living payment for people earning up to $70k represents "a few crumbs out there" for the squeezed middle, economic and political commentator Bernard Hickey says.

As part of Budget 2022, the one-off payment of $350 will be going to around 2.1 million Kiwis who are earning up to $70,000, but who are not in line for the Winter Energy Payment.

The $350 will be spread out over three months from August, working out to be about $27 extra a week.

Hickey told Breakfast the payment was not going to change the trajectory for savings or a house for young people.

READ MORE: Budget 2022: Over 2 million Kiwis to get cost of living payment

"That's three tanks of gas," he said.

"It's not going to really change the equation for most people, and remember those people who are at the lower end of the squeezed middle, they're not going to get it at all, because if they're getting the Winter Energy Payment, or they're on a benefit, or if they’re getting superannuation, they're not going to get it.

"So, really it was a few crumbs out there to say 'we're thinking of you' but not enough to really change the trajectory."

Economist Conal Smith had similar thoughts.

When asked by 1News Political Editor Jessica Mutch McKay if it was a sugar hit, he said: "Not even that, it's a half teaspoon of sugar or something."

Smith said it was not a large or permanent amount, so isn't going to have a large effect.

Finance Minister Grant Robertson later told Breakfast an extra $27 a week for three months is a "substantial amount" for those earning under $70,000.

He said if the Government was to make the payment permanent, it would run the risk of making inflation worse.

"Our view is temporary, targeted support is the way to go."