Ministry of Social Development (MSD) Child Poverty Report 2022 highlights need to support struggling families

Child Poverty Action Group (CPAG) welcomes the findings in the latest MSD Child Poverty Report showing that material hardship rates for many children had improved between 2013-21, thanks to government measures, rising employment rates, improving wages and the growing number of private charities.

However, the report painted a different picture for sole parent, Māori and Pacific children. Many risk being locked into poverty for most of their childhood says CPAG.

Material hardship rates, that is going without six or more ‘essential’ items, for Māori and Pacific children are much higher than the rest of the population. Around one in five Pacific children live in material hardship while the rate for Māori is one in three compared to the national average of one in ten.

As well two-thirds of children in severe hardship are in a family affected by disability.

Beneficiaries too are among the most impoverished people in our society. The MSD report showed the rate of material hardship for the children of beneficiaries is around four to five times higher than the rate for children in working households.

However, even working households struggle. In fact, the most common demographic for children below the poverty line features a Pakeha child in a two child, two parent family in paid work, living in a private rental.

While government measures such as increased support for housing, child-care, incomes for families with children and free school lunches, have assisted many households, too many children are still being left behind says CPAG convenor Alan Johnson.

“There are at least 50,000 children in severe poverty or deprivation, most of whom are in households being supported by the state in some way. Government agencies know of these children yet nothing extra is done for them and their families to relieve their hardship. This is simply neglect.”

The report highlights that much of the data was collected prior to the Covid pandemic, and does not capture the impact of lockdowns on low-income families or recent cost of living measures. It recognizes that the worst-off children who live in emergency accommodation such as motels and garages are not covered. CPAG says this means the true extent of child poverty in Aotearoa is likely to be much worse than portrayed. The report showed that rent takes up more than 40 per cent of income in low-income households. More recent data is unlikely to show an improvement.

CPAG congratulates the MSD for taking an in-depth look at Auckland’s figures. The averages have disguised the level of distress in many communities and the new breakdown into six wards reveals that parts of Auckland have very high deprivation.

CPAG says the government’s swift response to the Covid pandemic by financially supporting the business community, has shown it can act decisively and effectively in an emergency.  

“Our poorest children surely deserve the same urgency and priority shown for business owners during the pandemic,” says Johnson.

CPAG urges the government to reform Working for Families (WFF). The current system penalizes the children of families not in work by denying them a tax credit of $72.50 a week. If the purpose of the child payment is to relieve poverty but acts as a punishment for those in the most vulnerable situations, then children will remain in poverty, says Johnson. This punitive approach is not taken in other countries such as Australia.

CPAG calculates had this tax credit been paid to beneficiaries since 2006 when it was first introduced, these people would be $8b better off. “That’s $8 billion denied the poorest families,” says Johnson.

The government has embarked on a programme of building social housing, but the number of rental dwellings owned by Kainga Ora, the government’s housing agency, has grown by just 3000 since Labour came to power. CPAG says WFF reforms must be accelerated, and the government sale of public land must stop.

“We are five years into the Labour government’s commitment to cut child poverty but there are children born five years ago whose only experience is living in poverty,” says Johnson

CPAG would also like to see the more of the recommendations of the Welfare Expert Advisory Group implemented. One of the most crucial tasks yet to be addressed is the reform of WFF. Low-income Pacifica, Maori and sole parent families are over-represented in the groups currently excluded from full coverage.