New Zealand off the track with child wellbeing
The Salvation Army’s annual State of the Nation report reveals an alarming lack of improvement for children living in
poverty in New Zealand despite a significant growth in the economy.
Child Poverty Action Group (CPAG) says that the report, Off the Track provides clear evidence that the benefits of a booming economy are not reaching those who need them most.
"Any plans to improve the outcomes for children, and reduce crime rates through the Government’s new ‘Social Investment’
approach are significantly thwarted by the lack of response to the serious levels of poverty experienced by families in
New Zealand," says Associate Professor Mike O’Brien, CPAG’s social security spokesperson.
While the housing market may be contributing to overall economic growth, it is rapidly reducing disposable income among
those who are renting, as accommodation costs continue to rise faster than wages and salaries. The demand for and lack
of affordable housing in many areas has resulted in unprecedented levels of homelessness in New Zealand. Among the
homeless are families with young children, as well as youths aged between 19 and 24 who are struggling not only with the
rising cost of living, but also to find gainful employment.
Despite an increase in jobs, a rise in the average hourly pay rate, and a reduction in the number of children dependent
on welfare benefits, the number of children experiencing severe hardship and income poverty has not changed in the past
ten years, and the Salvation Army continues to experience a steady increase in food parcel distribution. While there are
fewer people supported by welfare, there is no evidence to suggest that families are any better off. According to the
report, "A comparison of benefit numbers with unemployment numbers suggests these people have not necessarily moved into
work and consequently lifted themselves out of poverty … although the Government has claimed its welfare reforms have
contributed to the alleviation of poverty in New Zealand."
The report suggests that entrenched poverty may be affected by failure of the Working for Families (WFF) tax credit
scheme to alleviate hardship among the most needy.
"The worst-off families are excluded from the full package, which saves Government spending about $500m per year," says
Associate Professor Susan St John, economics spokesperson for CPAG.
But as the report shows WFF has also eroded for working families. Specifically, changes made to the scheme since 2010
saved Government about $700m in 2016.
"The lack of indexation and increased claw-back impacts on low-income working families for whom every dollar earned over
the low threshold reduces their entitlements."
CPAG agrees that the savings achieved from this paring back could have been invested in a redesigned family support
programme that does not discriminate, thereby reducing child poverty rates amongst the benefit poor. The obvious way to
do this is to give the In-Work Tax Credit (IWTC) to all low-income families irrespective of their work hours.
Overall the report paints a bleak picture for children in poverty. CPAG has outlined a number of policy recommendations
to reduce poverty in the 2014 series Our children, our choice which is available for download.
See more about recommendations to Fix Working for Families here.
ENDS