No Signs of Real Improvement for Poorest Families

The latest Household Incomes Survey report shows that not everyone is better off, despite that income poverty seems to have lessened since the Global Financial Crisis in 2008.

For those suffering the worst of poverty, there has been very little change at all, according to Child Poverty Action Group (CPAG).

“There is nothing to suggest that a greater median or mean income figure is evidence of our most vulnerable families being any better off,” says Associate Professor Mike O’Brien, CPAG social security spokesperson.

“It pays to look more closely at the outgoing to income (OTI) figures, which show that more than half of all Accommodation Supplement recipients are spending over half their total incomes on housing costs.”

The report clearly shows the devastating impact of poor quality housing on those who have the lowest incomes, especially for families living in rental housing. Sole parents are experiencing the highest housing stress, which is concurrent with evidence from foodbanks and budget services who see this hardship on a daily basis.

“Housing affordability has proven to be the most severe issue affecting our low-income families, as well as the health impacts of low quality and overcrowding for children,” says O’Brien. 

“A much broader and more immediate approach to increasing housing supply and supporting family incomes is needed to make any significant reduction in child poverty.”

Associate Professor Susan St John, CPAG economics spokesperson says that once again,  MSD acknowledges explicitly that child poverty rates in the poorest families did not fall when Working for Families (WFF) came in, because they were left out of the In-Work Tax Credit.

“For ten years the poorest children have been denied this important part of WFF,” says St John.

The report shows there has been no significant change to the high levels of inequality. The total share of national income that goes to the bottom two quintiles of income earners is at the lowest it’s been since the data was first reported.

The Government’s focus on families receiving more in welfare or tax transfers than they pay in income taxis a harmful oversimplification.

“We don’t talk that way about our willing support of retirees,” says St John.

“Working for Families recognises the additional income needs of children. Families also pay very high GST on all their purchases.

“Supporting children does not come with extra pay.”

CPAG is releasing a series of policy priority papers outlining recommendations to improve New Zealand’s healthcare, education, welfare and housing systems. CPAG says that implementing these recommendations will reduce child poverty substantially and improve the lives of all low-income families with children.