A sorry state of affairs



But this is not about Len Brown.

I was reminded on a recent trip to Berlin of how if society condones the first act of injustice, and excuses it or minimizes it, the way is paved for the next act, and then the next. Finally we become trapped in a monstrous scenario and paralyzed to know how to escape.

In New Zealand, beguiled by the dogma of the free market we have allowed fundamental errors in our policies for children, with little thoughtful resistance. Now report after report lies ignored because our hearts and minds have been dulled to the outrages.

In 1991 we let Ruth Richardson slash the incomes of families on benefits in the name of incentivising beneficiaries  to find work and stand on their own two feet.  The result was a dramatic rise in child poverty. This was the beginning of the treatment of beneficiaries as ‘the other’ as ‘outsiders’ with their children left often unable to participate in the everyday things that other children take as their birthright.

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Then in 1996 compounding the injustice in a moment of extreme market-based ideology, we allowed Bill Birch to mark off $15 per week per child out of an inflation catch up of $20 per week per child of family support. The $15 was, ludicrously, the reward for being “independent from the state”. The $15 was eventually called the child tax credit and was the beginning of ‘deserving’ poor children being treated differently to the ‘undeserving’.

The result was that the children of beneficiaries fell further behind but the government saved itself money and eventually in the 2000s began running surpluses on the backs of its unjust policies.


Then In 2006 as part of Working for Families, the government took the child tax credit and made it even more exclusionary and expensive. It became a payment of $60 for 1-3 children and $15 per child more for larger families. Now not only was it required that there was no benefit income, but that sole parents had to work 20 hours and couples at least 30.   The government saved 450m per year towards its budget balance.

Lets be very clear, we allowed a tax-funded per child per week payment that goes to the caregiver to look after her children to be denied to the 230,000 children that needed it most.

The MSD itself says

“The fall in child poverty rates from 2004 to 2007 for children in one-Full Time -one-workless 2 Parent households was very large (28% to 9%), reflecting the Working For Families impact, especially through the In-work Tax Credit.”

For those who missed out on the IWTC however, the Ministry itself says

“From 2007 to 2012, [the poverty rates were] around six to seven times higher for children in workless households.  This to a large degree reflects the greater WFF assistance for working families than for beneficiary families.”

In the meantime the demonization of beneficiaries as the other, the outsiders the less then human continued with one injustice paving the way for the next in the punitive welfare reforms of this government.

In 2013 the Court of Appeal agreed with CPAG that the IWTC is discriminatory and causes material harm. Sadly it was persuaded that a tiny number of sole parents may have been incentivised into work, and that justified the harm to 230,000 children.

The more interesting question is what do we do with the knowledge that 230,000 children are suffering harm from our choice of policies?

If we do nothing we pave the way for worse to come.  The savings from the discriminatory policies since 1996 are over $5 billion. How shameful is it that in 2013-14 as we return to surpluses on the backs of these policies, there are demands that funds are directed into the New Zealand Superannuation Fund not to solve child poverty.


  1. This is the policy of the new world order gradually implemented by the succession of New Zealand governments over the past 50 years or so.

    The Friedman economic model along with deregulation has clearly failed and John Key’s new hope is in the TTPA although he’d rather we all sat glued to our TV screens to watch the rugby and not notice that those at the bottom of the heap must pay to support those at the top while the next generation must pay for the excesses of the rich. Child poverty and children being forced to pay for their education are symptomatic of gross corruption and greed at the top.

    Our government idolises everything US and this is where our govt policies come form as the PM wants us to be as exceptional as the USA http://wp.me/p3IRVb-Cd

    This is just the tip of the iceberg, wait till you see what’s coming over the next 50 years.

  2. Hi Susan
    I’d challenge your date of 1991 as the beginning of treating beneficiaries as “the other”. I was on a partial DPB 1980-86, and this policy was very well established. This was the era when the Minister encouraged neighbours to shop you if a man stayed more than three nights/week, whenMuldoon fixed mortgage rates for institutional mortgages, leaving others to lawyer lending at 19%, and declared beneficiaries talking a little money under the table to be worse than tax evaders – in Parliament. Appointments were made at short notice to inspect me, in my working hours, when I’d always declared my work. I well and truly felt like “the other” – especially as divorce was still not commonplace.

  3. Thanks Susan for this reminder of the real issues and the failure of successive government to care one iota for children living in poverty

  4. A timely reminder of how this this tragedy in our midst came into being.

    While many people plan their next overseas trip or a new kitchen a growing group of children are growing up with nothing. Any door out of poverty, such as free education, are rapidly being slammed in their faces.

    I guess our society will reap as it sows.

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