Families Must Feature in Budget 2017

In 2017 far too many families have neither a warm safe home nor sufficient money after rent for necessities to enable their children to thrive.

CPAG expects changes to Working for Families (WFF) in this Budget, as foreshadowed by the Minister of Finance Steven Joyce.

“But if all that is on offer is the inflation adjustment due in 2018 after six years of neglect, it will be far too little, too late,” says CPAG economics spokesperson, Associate Professor Susan St John.

St John says, “The automatic five per cent increase in WFF will not reflect the huge actual increase in housing and living costs.”

“Moreover, the abatement rate will increase automatically under current rules and the maximum income threshold for full entitlements will reduce. These changes mean that a five percent increase will disappear for low-income working families earning over $36-40K per year.

"Hopefully the Government sees that such a ‘fiscally neutral’ adjustment in 2018 falls far short of what is required to fix the many failures and anomalies of WFF," says St John.

“It would take $700 million per annum to restore Working for Families to where it was in real terms in 2010, and another $500 million per annum to ensure the full package gets to the families who need it most.  Spending $1.2 billion more a year is a vital first step, then there must be future annual adjustments to better reflect the true costs faced by families, as is done for New Zealand Superannuation (NZ Super).

CPAG health spokesperson Professor Innes Asher says “While the Government has suggested a target of ’reducing the number of hospitalisations for children 12 and under with preventable conditions’, it is imperative that as well as boosting funding in the health arena, extra spending should be directed at the root causes of the 40,000 potentially preventable hospital admissions each year for children aged 12 and under.

The root causes of the appalling numbers of children in hospital include poverty and poor housing conditions.

“Critical issues for low-income families are having enough money to provide the basic necessities for their children such as nutritious food, warm clothing and bedding, pre-school and school costs, and affordable, healthy housing,” says Asher.

“The lack of healthy and affordable housing is putting these children at much greater risk of illness, as respiratory conditions are more likely to occur and worsen in houses at that are cold, damp and mouldy, and illness spreads rapidly when there is overcrowding.”

“The zero-fees scheme for under 13s has helped a lot - but there is evidence that adolescents are suffering from the lack of access to affordable healthcare, with illnesses such as depression, pneumonia and serious skin infections.

“If we want fewer children to become so sick they are admitted to hospital, three things need to happen now: health spending should be increased to ensure GP visits and prescriptions are free for all children until their 18th birthdays; incomes for low-income families should be boosted drastically; and a housing strategy that ensures every child has a healthy home to live in should be implemented,” says Professor Asher.

CPAG Housing and Law spokesperson Frank Hogan says that tax cuts for high-income earners and businesses are not the answer. He would like to see something like a capital gains tax (CGT) introduced on unearned or windfall profits made by housing investors and speculators.

“It’s time housing investors and speculators paid their share of taxes. It is crazy that the state-owned social housing agency pays tax when private investors use rental housing investment to avoid tax."

“A robust, transparent plan for increasing the social housing stock is imperative, as is the need to ensure that people who may be eligible for social housing are supported in the process of getting on the waiting list.”

“It’s high time we returned to welfare system that is generous, rather than modest, and committed to building all the houses that are needed - not just some.”

CPAG Education spokesperson Professor John O’Neill says that the Government’s experiment with targeted funding for at-risk students needs to be additional to and not instead of cost of service delivery increases in baseline funding to all educational settings.  

“The Government has belatedly realised that the quality of early childhood teaching and learning is very unequal across the country and it is children living in poverty hardship and those from culturally diverse backgrounds who miss out on the very best start in life. Parents and whānau who work several jobs just to try and make ends meet are likely to have the twin burdens of insecure housing and difficulty finding quality, affordable early childhood education.

“When Government fails to increase schools operational grants in line with the actual costs of service delivery, and when it relies on charities to fill the funding gaps for basic health, welfare and nutrition supports that children in poverty need to thrive at school, it is neglecting society’s most disadvantaged young people.”

Child Poverty Action Group will present its analysis of what the budget holds for children and families at Post-Budget Breakfast events held in four centres throughout New Zealand on May 26 and in Nelson on May 31.

The analysis will be prepared by specialists from a range of disciplines, including, health, economics, social services, housing and education.

CPAG joins with families nationwide in hoping the Government delivers for children in this budget.