2018 Budget: A First Step, but Not a Transformation for Children

Child Poverty Action Group (CPAG) says that the Government 2018 Budget makes a start at addressing children’s needs - but there’s still a long way to go to ensure that they have all the income they need to thrive.

Budget predictions of a $3.8 billion surplus show that resources exist to provide children living in the worst of poverty the real, substantial lift they need over the next six months.

Associate Professor Mike O’Brien, social services spokesperson, says, “There is a very high cost of not spending on low-income families.  The Government has followed through with its Families Package promise but the income boost is really only a catch-up for nine years of cutback to Working for Families budgets.  Many very low-income families have incurred high levels of debt over that time, and these increases will not be enough to alleviate their day-to-day poverty. Unless indexed properly, Working for Families budgets will fall back again, as is indicated in 2018 Budget figures.”

Associate Professor Susan St John, CPAG economics spokesperson, says that a family on the benefit with two children needs far more than the $47 they will get from the 1 July changes to make ends meet. St John says, “To get to get up to the 50% poverty line measure (after housing costs, based on equivalised national median income) this family needs more like $100 and that’s only if they currently sit at the 40% level. Many families on welfare benefits living with expensive rents are actually below even the 30% line.”

CPAG is also concerned that the Government has not yet lifted the benefit sanctions that harm children - in particular the sanction that applies when the father of a child is not named.

St John says, “The Government has claimed it will end this sanction, and that the cost of doing so will be around $25 million. With an expected surplus of nearly $4 billion this makes cancelling the sanction an easily affordable action. Around 17,000 children would be $28 better off every week, and this would go some of the way to meeting their needs. Other actions include a real lift to benefits and giving the full WFF package to the families who currently miss out on $72.50 a week.”

Extending free primary healthcare and prescriptions for children up to their 14th birthday is a great step and CPAG hopes that these incremental steps to a fully-funded healthcare system for all children will continue to evolve.

Professor Innes Asher, CPAG health spokesperson says, “Unmet need for children aged between 13 and 14, due to the barrier of cost was 8.8 per cent in 2016-17 compared to 2.7 per cent for 6-12 year olds, so this is a terrific advance for low-income families.”

Additional funding for the early childhood care and education sector is also welcomed as these services have been squeezed for far too long, due to operational funding freezes.

Associate Professor Jenny Ritchie, ECCE spokesperson, says, “It is pleasing to see the increase in operating funding for early childhood education services, along with the recognition that this vitally important, foundational sector has been grossly underfunded by the previous government’s failure to adjust for costs since 2008.”

The operating boost to Early Intervention Services will see support reaching more preschool children with additional needs.

$59 million for teacher aides is an important advance and many struggling schools will benefit.

Alan Johnson, CPAG’s housing spokesperson, says, “We have 7,890 households on the waiting list for social housing, and the need will only increase with an aging and growing population. We need at least 2,000 houses being built each year to cope with the demand, and possibly more. The Government’s decision to aim for 6,400 state and social houses over the next 4 years will not address this demand or current levels of homelessness.”

Dr Rhys Jones, a Senior Lecturer in Māori Health says, “It is critical that as a nation we are working towards building equitable outcomes, paying particular attention to the way that Māori children are disproportionately in hardship.” 

Dr Jones will be speaking at CPAG’s Post Budget Brunch in Auckland tomorrow.

CPAG says there are many commendable measures within this budget for children in poverty but life-changing transformation is what our worst-off children really need. Experts claim that there is more to come – we are yet hopeful to see the real transformative change that children need to really thrive.

Our summary of the 2018 Budget and its implications for children and families is available online here.