The Treasury has revised the child-poverty projections it provided to the Government in December 2017.

As outlined in the Treasury’s 17 January media release, the previous estimate was based on code that included a modelling error (http://www.treasury.govt.nz/publications/media-speeches/media/17jan18).

“We have confirmed that our error in the microsimulation modelling affected both our assessment of the Families Package announced in December 2017 and comparisons with the previous Government’s Family Incomes Package announced in May 2017,” says Deputy Secretary to the Treasury Tim Ng.

“In the table below, the figures we provided to the Government in December 2017 are in the ‘As published’ row. Correcting for the coding error, our best advice at that time should have been the estimates in the ‘Revised’ row.

Like-for-like comparison of projections (revised with coding error corrected and no other changes)

Projected reduction in children in low-income households in 2021
(50% of median equivalised income before housing costs)

This data corrects the coding error identified in January 2018. No other changes have been applied.

“No new coding errors were found during our internal review.

“As we stated in January, the error does not affect the number of people who will be helped by the Government’s Families Package, the amount of extra income they will receive, or the fiscal impact of the Package. Our analysis continues to show that the Families Package will substantially reduce the number of children living in low-income households.

“Our mistake is deeply regrettable, and I repeat the Treasury’s apology for it,” Mr. Ng says.

Meanwhile, Secretary to the Treasury Gabriel Makhlouf has confirmed that the independent review of the cause of the error, and possible improvements to the Treasury’s microsimulation modelling framework and associated quality-assurance processes, is under way.

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