Latest official child poverty measures: 2023/24 (February 2025)
Every year, StatsNZ reports on nine measures of child poverty as per the Child Poverty Reduction Act 2018. CPAG’s immediate response to this year’s StatsNZ datadata is we continue to neglect the issue of child poverty in New Zealand, solidified by the failure to achieve any of the three targets set for 2023/24.
We call for clear governmental strategy to tackle child poverty in New Zealand and abide to the bipartisan agreement of halving child poverty by 2028. We ultimately want all our tamaraki and mokopuna to thrive, without the toxic barriers of poverty.
Material Hardship (Primary Measure)
Material hardship is assessed through a questionnaire composed of 17 questions (see graph below). Yes to 6 questions or more is considered material hardship. A broad overview of the items in the questionnaire can be found in the graphic below. For a more detailed explanation of New Zealand’s child poverty measures, including a comprehensive list of the 17 questions used in the material hardship questionnaire, please refer to our beginner’s guide and FAQs.
1 IN 7 CHILDREN ARE IN MATERIAL HARDSHIP
As of June 2024, it is very probable that 9,000 more children are in material hardship compared to 2018 (see graph on the right), when we, as a nation, agreed to tackle child poverty. In 2018, 148,069, or 13.3%, children were in material hardship; by June 2024, there were 157,048 children or 13.4%.
Despite a mere 0.1% difference between these two years, the children's population has grown by more than 5%. Going from 1.11 million to 1.17 million children, an estimate of at least 60,000 more children in the New Zealand population. Therefore, a mere 0.1% increase in material hardship converts to close to 9,000 more children in material hardship.
The substantial reduction in the rate of material hardship observed between 2019 and 2022 was erased by a rapid increase in the past two years, especially in 2022 - 2023, which observed a two-percentile point increase. This is further compounded by another 0.9% increase observed in the 2023 - 2024 data.
Recent trends in this poverty measure is greatly disappointing and concerning, especially given that we were very close to hitting the 2021 target (0.7% off). The turn in 2022 had backtracked our progress and much more policy attention needs to be directed at correcting the current trend, ultimately ending child poverty in New Zealand.
Uneven deprivations
Hardship is unevenly distributed in NZ society. Communities that face ongoing discrimination based on ethnicity and ableism. This is shown in the persistence of material hardship in Māori and Pacific children that have stayed above 20-25% in the past 5 years. The same stagnation in material hardship rate is observed in disabled children and families with at least a disabled person.
What caused this huge spike?
The official statistics on material hardship do not provide a breakdown of what deprived families are forced to go without due to poverty.
An ongoing longitudinal study called Growing Up in New Zealand that follow 6,000 families from pregnancy to at least 21-years old. This study provides an insight into what essential items deprived families go without first in their We Are 12 - Material Hardship snapshot report, mainly its material hardship indicator head map (see below).
Food is an area that families cut costs on first. Cutting back on meat or using vegetable substitutes was the most prevalent practice adopted by families experiencing material hardship at 71% (bottom row). Also, 24% of the participating households in material hardship went without fresh fruit and vegetables. Not eating a meal with meat or vegetable substitutes every second day was also observed at 12%. Inflation for food was observed at 19.9% between Q2 2021 and Q2 2024, the period from which the two recent datasets were collected. Inflation of food prices during this period was more than three times that of the previous three-year period (Q2 2018 - Q2 2021), which was observed at 6.6%. The sharp increase in food prices posed an apparent threat to families’ food security.
The unavailability of affordable dental care, especially for low-income households, and its impact on our society is widely explored in ActionStation’s recent reports. We echo their call for the urgent need for universal free dental care.
Future commentaries and research articles will explore further compounding factors to families’ material and income insecurity, particularly income (in)adequacy. Understanding poverty cannot be explained through a single factor or dimension is critical.
Income Poverty
Before housing costs 50 AKA BHC50 (Primary Measure)
This primary measure is often categorised as a “relative” or “moving” measure as it assesses households’ income positions against the typical (median) household. Relative measures are important for us to see how many children are poorly positioned against the “typical” and how far they are positioned in terms of income.
In 2023/24, the BHC50 poverty line is set at $23,741, or a weekly household equivalised income of $455 (see our beginner’s guide for a detailed explanation of equivalisation).
To make income deprivation more grounded, we reversed the equivalisation process for four example household compositions: a sole parent with one child and two children, a couple with one child and two children. The income of “poor” households is assumed to be precisely on the BHC50 poverty line, which means the income of households below the line is lower than presented in the table below.
After housing costs 50, fixed to a base year (2018) AKA AHC50-Fixed (Primary Measure)
This primary measure’s poverty line is “fixed” to a base year, meaning that each year’s definition of poverty references the same year’s median income but always references back to 50% of the base year’s median income and adjusted to inflation.
A “fixed” measure of income poverty can also be called “absolute” poverty. This is because the base year’s poverty line is being used as the definition for absolute poverty, and if people’s income outpaces inflation, the level of absolute poverty should decline over time.
This poverty measure uses income after housing costs are deducted to get a better picture of people’s income situation after the bare necessity of shelter is paid for.
In 2023/24, the AHC50-Fixed poverty line is set at $18,949, or a weekly household equivalised income of $363 (see our beginner’s guide for a detailed explanation of equivalisation).
Again, we reversed the equivalisation process for four example household compositions to make income deprivation more grounded.
Housing and deep poverty
Housing continue to play a big role in locking children in poverty. AHC60, 50, and 40 are three supplementary measures that define poverty as 60%, 50% and 40% of the yearly median after housing costs are deducted.
In 2023/24, these poverty lines are set at:
AHC60 - $24,173
AHC50 - $20,144
AHC40 - $16,115
Generally, we achieve some progress in reducing the rate of children in the deep poverty (40% of median) and in poverty (50% of median) in the 6 years of Child Poverty Reduction Act. However, the overall rate of children falling under financial insecurity by the AHC60 measure has recovered to similar levels.
More worryingly, with the increase of children population in New Zealand, the overall number of children falling into poverty after housing costs in 2023/24 is greater than 2018, and comparable with 2008 numbers. CPAG has published work on the decline of affordable private rentals in the 2018 - 2023 period, particularly in a number of remote regions. A more precise investigation between regional child poverty rate and the supply of affordable rental supply is warranted.
The increasing rate and population of children falling into poverty due to housing costs also intersect with the rapid regrowth of material hardship as families generally cannot forfeit housing to find savings in weekly budget. Then, increase in housing costs forces families to find savings in daily consumables and things that may not pose immediate consequences in the present but have serious consequences in the long-term such as healthcare and insurances.
Similar to previous income measures, these three after housing poverty lines are grounded by reversing the equivalisation income figures based on four model families.
Inequality & Child Poverty
One thing we’d like to signal, and echoing the work of Max Rashbrooke, is the persistence of income and wealth inequality in New Zealand. The below graph illustrates household (equivalised) income after housing costs from 1982 to 2024, fixed to 2018 New Zealand Dollar value. Stagnation and degrowth are dominant themes of income at the three lowest percentiles and are positioned further from the typical median household (represented in the light beige area). These are the households we are likely to find to be in poverty. In the same period, household income at the top two levels (90th and 80th percentile) saw rapid growth, over 65% and 55%, respectively, and diverged significantly from the median and lower percentile households (represented in the light green area).
An even greater disparity in observed in the median individual net worth (assets with debt deducted) between different ethnicity (see table below). The typical pākeha individual has significantly more wealth before going into retirement than other ethnic groups, 70% more than Asian, more than 2.5 times more than Māori, and over 15 times more than a Pacific ethnic person.
The inequality in household income and individual wealth strongly contribute to the level of material hardship and income poverty experienced by children of different ethnicity.
Consistent Poverty
Attempting to conclude the latest child poverty statistics on a relatively positive note, we have succeeded to take around 7,000 children out of income and material poverty, despite a regrowth in recent year. This is referred to as “consistent” poverty in Ireland and shines a light on the most deprived children. Again, it is remarkable to see the progress made in the early years of Child Poverty Reduction Act (2018), particularly in this measure where we gone from 97,970 to 66,665, a 3% decrease. It is a reminder that we collectively can push for progress in reducing child poverty and ultimately seeing the end of its existence in beautiful Aotearoa.