Address to the Greens conference 2 June 2002.

Making children visible

Susan St John

Thank you for asking me to speak today. I am representing the Child Poverty Action Group. We are a non- politically aligned group of professionals and academics advocating better policies for children. Our organization is modeled on our counterparts in the CPAG in the UK, although, so far, we are a voluntary organization and much more modest in scope and funding.

Your children’s policy document is stunning. What I like particularly is the way the philosophy clothes the policy. It has been a very long time in NZ since we have had such a child focused policy statement. We commend the Green party for their courage and long-term vision in grasping the importance of this issue.

The truth is children have been invisible in policy making of all kinds, even in legislation that directly affects them, and listening to the 2002 budget it felt like they had now been completely forgotten. Indeed the indifference at the political level to the issue of child poverty has been hard to fathom. Why would any left of centre government ignore an issue of critical national importance? What is the point of focusing on the knowledge economy when so many of our children who are the work force of tomorrow are ill fed, sick, and ill housed? In 8 years time we will see the beginning of a serious shift in the age structure. As Rod Donald has consistently reminded the House the children of today are the workforce on which the babyboom generation will depend to provide the quality services they need. So how short sighted can we get?

Child poverty is like an iceberg- we see the tip on the TV and newspaper every day - the headlines shout child abuse, child obesity, rotting teeth, meningococcal disease, youth suicide and so on. How much do we as a society think or care about what lies under the iceberg’s tip of disasters? These are the consequential social and economic costs. The family breakdown, drug alcohol abuse, violence and mayhem, inexplicable horrifying murders, anti-social behaviours, lost productivity, an overburdened health system.

We cant now avoid many of these social and economic costs. For example we have the highest rate among developed countries of many third world diseases and have to spend $200m to immunize children against meningococccal disease. But spending $200m will not solve the problem - we are putting our heads in the sand if we think that is the case. These are negative expenditures that attempt to undo the damage, and will do so only piecemeal. In the meantime new costs, new diseases will emerge- because the underlying malaise is worsening.

Recently Professor Innes Asher, head of respiratory medicine at Starship, The Auckland City Missioner, Diane Roberston and myself, made a teaching video for CPAG about child health, food hunger and lack of attention to family incomes. In it, Innes Asher comments on

1. Shocking ‘developing country’ diseases
2. Rates of some diseases more than doubled since 1991
3. Rates still increasing 2000-2002
4. Related to poverty, overcrowding and poor primary health care

To prevent many of the costly and devastating diseases of childhood that are robbing too many of a healthy start in life, some basics are needed. These are

1. Wash all over daily with clean water X
2. Wash hands with soap and dry after toilet X
3. Don’t share clothes, towels, bedding X
4. Get plenty of sleep X
5. Eat plenty of fruit and vegetables X
6. If sores get worse go to the doctor X
7. Make sure the child takes all the antibiotics X

Usually none of these are possible for the families she sees. Research shows that $250 is needed to feed a family of four a minimal basic diet, but many, many families have far less than that for food. Their real incomes are cut each year. Even low inflation is damaging- and the cost of good food puts it beyond the reach of those that need it most. The price of basic food has risen faster than inflation, and housing costs have continued to rise for all but the few who have had some relief from the income related rents policy to date. In spite of the economic recovery, Diane Robertson reports ever-increasing demands at the food banks and a relentless rise in families with children needing help, including the working poor. She believes that lack of financial resources and the run down of assets is the fundamental problem- not poor budgeting or moral deficiency.

The Green policy displays, not just the willingness to use the rhetoric in a way we have not heard for a long time in NZ, but to back it up with concrete action. Children are important in policy, and the public who hears so much about the needs of business need to be reminded. For too long we have pretended that the free market will solve all our problems and that hands off is best. The Greens are unashamedly hands on. It is refreshing to see decisive action on TV violence and advertisements aimed at children and the need to emphasise healthy nutrition, and freedom from toxins. CPAG acknowledges Sue Kedgley ‘s critical influence, and is extremely supportive of her role in getting these issues on the table. Lets hope the rest of NZ takes it seriously before it really is too late.

Family incomes policy is a major issue for CPAG this election. Distressingly there was no mention of either child poverty or family assistance in the budget. Alarmingly there are no provisions for any inflation catch-up for either Family Support or the Child Tax Credit in the fiscal projections out to 2006.

If Coalition partners dare raise the issue they risk being accused of disloyalty. If the Greens were to find themselves in an influential position after the election we would urge them not to compromise on this issue.

It is tiresome to hear well heeled and even left wing people claim that throwing money at a problem does not solve anything. Of course, as your policy is at pains to express, there are a multitude of things that need to be done. The poverty and dysfunction of many families is now so severe that nothing short of intensive one-to one help for many years will make much difference. No-one pretends that all there is to child poverty is more money for families, but that is no excuse for the flagrant neglect of the incomes of the poorest that we have seen in the past decade.

CPAG have long supported the idea of universality of family assistance. A child benefit provides immediate cash income to the caregiver; does not have to be paid back at the end of the year if too much money has been earned; does not change with changes in the marital status of the parents; is easy to access is based on the child not the parent’s income situation. The UK CPAG has always seen the universal child benefit as an extremely important anti poverty measure. They been highly influential seeing that it is protected.

To New Zealand ears a universal child benefit may sound like a radical idea- but we do have a universal state pension. As a result of the tax cuts, the surcharge removal and the indexation formula we now deliver into the wealthiest retired households well over $300 a week more than we did in 1996. Giving every first child a $15 universal benefit and $10 for others sounds miniscule in comparison. Yet as Diane Robertson says, $15 per child can make a huge difference to a low budget family.

The Green Party has also suggested review and reform of Family Support. There is a suggestion that discriminatory policies will be removed. I would like to challenge the Green Party to be more specific. Why is the Child Tax Credit never discussed openly in NZ?

May I briefly outline the history of this invidious measure. Family Support was introduced in 1986 as a single tax credit to assist all low income families regardless their source of low income. In 1991 the universal family benefit was abolished and Family Support became the sole form of weekly income supplement for children. Low income families had their family support increased by the value of the foregone family benefit and all low income families were still treated the same.

The worst was to come. In the mid 1990s, instead of properly adjusting Family Support to compensate for inflation, the Child Tax Credit was introduced. The Child Tax Credit is added to Family Support, but only for those children whose parents are deemed ‘independent from the state’. The rest, about 300,000 of the most needy children in New Zealand, are the undeserving poor and miss out on this $15 per child per week payment. How do they miss out? It may be one of their parents is on a benefit, perhaps chronically ill, or lost their job and now doubly punished, or they are on ACC for more than 3 months, the children of these disabled people are not worthy of the CTC. If one parent dares to be old and on New Zealand superannuation, or studying on a student allowance, their children too are excluded from the CTC. One might suggest that a sole parent with a part-time job and child caring responsibilities works harder than just about anyone, but if they are on a part-DPB, their children too are ineligible for the Child Tax Credit.

Families with young children who do not get the Child Tax Credit have had a serious loss in purchasing power because their Family Support has only been increased minimally from when Roger Douglas put it in place in 1986. For a young one-child family it has risen by only $5 in 26 years, moreover to get the full amount of $47 a week, joint income must be under $20,000. A one-child family on a low income of around $26,000 gets only $24 a week. This buys 60% less than the family support paid to a similar family 26 years ago. Even if the Child Tax Credit is included, the loss is still 35%. By the time the level of the average wage is reached, all assistance for the one-child family has disappeared. It is not just that regular CPI adjustments have failed to occur, and that catch-ups have been totally inadequate and spasmodic, but that the levels of income from which the claw-back occurs have been largely fixed for more than 10 years.

When in Opposition, in 1996, Labour said that if elected they would immediately add the Child Tax Credit onto Family Support for all children. There has been a veil of silence about it ever since. How can any party that pretends to be concerned about social justice tolerate the Child Tax Credit? My fear is that like many other changes that have been foistered on us, the longer it is left the more irreversible it becomes. Like the student debt mountain, the run down health system, secondary teachers, it now costs huge money to reverse the damage.

CPAG would challenge the Greens to insist that the CTC is added onto family support in the first year of the term of the next government and then family support is properly adjusted to restore its real value for all families with young children. This alone might cost around $500m. As your policy rightly emphasizes- we must get it right with automatic indexation. Then, just like the pension, it does not become a matter of a hue and cry each budget day with a pretence the inflation catch up is new spending.

I do acknowledge there have been some good initiatives taken by the current government, but there is no serious challenge to the underlying ideology of the income distribution in New Zealand. It is quite different in the UK, supposedly the model ‘third way government’. If there are delegates here today who may have reservations about the emphasis that is being placed on children in Green policy, and maybe wonder if it is just fuzzy left wing thinking, I would urge them to look at the last three years of UK budgets.

The 2002 UK budget has whole chapter devoted to creating a fairer society.

Since 1997, the Government has placed welfare reform at the heart of its strategy for promoting fairness and inclusion. A modern welfare state is the means to ensure that everyone in society has an equal chance to share in rising national prosperity.

Tackling childhood disadvantage is particularly important because childhood experience lays the foundations for later life. Children growing up in low-income households are more likely than others to have poor health, perform badly at school, experience unemployment as adults or earn lower wages. The Government is therefore committed to halving child poverty by 2010 and abolishing it within a generation.’

They are going in the opposite direction to us. By 2003 they will have a Child Tax Credit- that treats all children the same and does not differentiate based on work status of the parents. There will be ‘a common framework for assessment, so that all families are part of the same system and poorer families do not feel the stigma associated with the current forms of support’. With the universal Child Benefit, there will be £54.25 a week for the first child in families with an income of less than £13,000 a year.

I would like to finish by paying a tribute to Sue Bradford for her sterling work on children’s issues. We have found her to be a skilful politician.. In a recent select committee at which I represented CPAG’s views on the working towards employment bill. I omitted some quite crucial issues on the punitive sanctions. She cleverly played devil’s advocate, and sweetly asked me ‘didn’t I think that since the sanctions for non-compliance meant only 50% of the sole parent’s benefit would be cut, that the children would be protected? Of course that gave me the opportunity to say what I should have said in the first place.

The Greens have put a stake in the ground over children’s issues. Congratulations!!

Table 5.1: The principal elements of the Child Tax Credit and Child Benefit UK
2003-04 weekly amounts
First child For each
subsequent child
Child Benefit £16.05 £10.75
Child Tax Credit
- family element £10.45
- child element £27.75 £27.75
Maximum support £54.25 £38.50

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