What the Annual Child Poverty Stats Tell Us

By Janet McAllister

*22 April 2021: note that this piece uses uncorrected StatsNZ figures - it will be updated asap*

A deep dive into the latest child poverty statistics (collected pre-Covid) released last month makes it clear that CPAG’s initial judgement was absolutely correct:

• Incrementalism isn't working

• The Government is in jeopardy of failing to meet all three of its 2021 targets

• The Government’s failure to put children at the heart of its Covid-19 response is responsible for putting two of those targets at risk, which – pre-Covid – it looked on-track to meet (indeed, it had already met the target for unambitious “backstop” fixed-line measure b).
  

Covid-19 is no excuse for Government failure to care for children. It is, in fact, a reason to step-up efforts to ensure children are protected from the effects of poverty. Covid-19 is a child poverty issue. The PM’s own officials have warned her that the “most severe negative effects [of Covid-19] are likely to be felt by those who are already disadvantaged.”

Children should not be used as economic shock absorbers

The latest stats show that pre-Covid, more children in this country lived in severe income poverty (168,000) than there are people living in Tauranga, our fifth biggest city – and neither the numbers nor the rate have changed much in over a decade (on the 40% AHC moving line measure).

As we’ve discussed elsewhere, the stats show more than half of the New Zealand children in material hardship (53%) live in a household with at least one disabled person. Due to ongoing discrimination and colonisation, tamariki Māori have more than twice the rate of material hardship as Pākehā children (19% for Māori, 8.6% for Pākehā), while Pacific children (25.4%) have nearly three times the Pākehā rate.

If the Government had announced a coherent well-resourced plan – given us some hope of effective policy in the future – these figures would be less painful. As it is, the Government still shows no indication that they realise the magnitude of the problem, even as seven out of every ten people in Aotearoa New Zealand – from across the political spectrum – say they care and want action: specifically, they want the Government to follow expert advice and raise income support.

As we outline in our recent Briefing to Government on Income Support:

• The Government needs to increase benefits. Ruth Richardson’s Mother of All Budgets still has more influence on the miserly social welfare system than Jacinda Ardern does. In fact, net benefits and child assistance (Working for Families) combined are still lower now that they were immediately after Richardson’s social welfare cuts, as a percentage of net average wages. Not coincidentally, severe child poverty doubled overnight in the early 1990s and has never shrunk back anywhere near to what it was before then.

• The Government needs to make all financial assistance for children available to all low-income children. In other words, the In-Work Tax Credit should be made available to those whānau and families who receive benefit income. Currently many families in severe poverty – including some who receive paid-work income – are not eligible, missing out on at least $72 a week.

• The Government needs to increase support for children with disabilities – and for caregivers with disabilities – and ensure that all those entitled know about it, so that whānau and families with disabilities are no more likely to live in hardship than others (as discussed in our 2020 Living Well? report.

• Treatment of couples and relationships needs to better reflect real-life practicalities: couples should not be expected to live on one minimum wage (or less) between them; and new partners should not be expected to immediately shoulder all financial responsibility for someone else’s children.

Housing is another tangle that desperately needs sorting out – read about CPAG’s four-pronged approach in our Housing Briefing: rebalance investment incentives (tax), accelerate increasing supply, strengthen tenants’ rights and reorganise income support. Yes, income support again.

This all needs a resource boost in the order of billions of dollars a year. The idea that such small projects as free toothbrushes and period products – as vital as those are – are worth crowing about is embarrassing. People need money. Giving it to them works to reduce poverty. People need money. Give it to them.