“This is a long overdue response to the disastrous child poverty experienced since the 1990s,” says Associate Professor Susan St John, CPAG’s economics spokesperson.
“The Prime Minister is to be applauded for prioritising child poverty reduction with this package. The previous government methodically undermined and eroded Working for Families (WFF) so there was a lot of repairing to do.
“But there are still some complex issues and CPAG would welcome working with Government on ways to simplify and extend the package. We would especially urge the Government to help the very worst-off children who are still excluded from the full package.”
A cause for concern is that the changes won’t occur till 1 July 2018.
“If we can increase student supports in January – surely we could expedite the payments for children, too.”
Some of the spending announced today reflects a long overdue inflation catch up.
“There has been no adjustment since 2012, nearly six years ago and there is little clarity around how future adjustments will be made,” says St John.
“There are also complex issues for working families when they earn extra money.”
CPAG urges regular annual adjustments, including adjustments to reflect wage growth to ensure that families don’t fall behind over time. The increase in the threshold to $42,700 (from $36,350, due to decrease further to $35,000 under National) will be welcome relief for low-income working families. But it would be good to drop the rate of abatement to 20% instead of increasing it to 25%. The clawbacks are too tough for working families, some of whom are also repaying student loans and losing 25% of each extra dollar earned from their Accommodation Supplement, as well as getting a reduced WFF.
While these are the kinds of things to work on in the future, today is the day to celebrate that at last children’s needs are being taken seriously.
The Government predicts that by 2021, 88,000 children will be lifted out of severe income poverty with these changes. There is more work still to do for all New Zealand children to really thrive, but the Government has made a very credible start.