Is Child Poverty really too hard to cure?

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In the NZH editorial (Tuesday 27th Feb) , titled: ”New Zealand is failing our most vulnerable – our children” it was stated:

On Thursday, Stats NZ released its latest child poverty measures, showing in the year to June 2023, 202,100 children were deemed to be living in poverty in this country. That’s an increase of 3.1 per cent on the previous year.

Oops. The editorial is incorrect to say there is an increase of 3.1%. It should have said 3.1 percentage points.  The actual increase in numbers of children is a whopping 35,900 or 20% and is described by Stats NZ as statistically significant.   

This 50% AHC fixed line measure is expected to show a downward trend when real incomes (incomes after adjusting for inflation) rise as is normally the case and is the trend until recently as can be seen from the figure.

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The measure used here is the canary in the mine as it indicates changes in absolute poverty. It counts children under the 50% 2018 after housing costs median household income maintained in real value by a simple CPI adjustment. 

By year ended June 2023 it is clearly going in the wrong direction. More, not fewer children live in families who can’t sustain even the meagre 2018 standard of living of the 50% fixed line.  Corroborating the conclusion that child poverty got worse, there is also a 2.5 percentage change in hardship, the third primary measure in the Act. This shows 143,700 children were going without basic needs, such as fresh fruit and vegetables and doctor visits, and had to put up with being sick and cold. These figures must be taken as, or more, seriously as in these fraught times.

Of course there are other reasons to be even more alarmed. The official figures are so far out of date by the time they arrive and fail to cover the worst-off children whose families do not have a secure household address. Much more attention should have been paid to the consistent reports from the NGO sector such as foodbanks, budgeting services, ACM, Salvation Army, KidsCan and Variety. Charities report food insecurity is the number one reason so many are seeking help.  The situation for the 2023/24 year, not reported until 2025, will doubtless show further deterioration as there are no policy changes in the past year to suggest otherwise and the voices from the NGOS are louder than ever.

Victoria University of Wellington professor of public policy Jonathan Boston is quoted in the editorial saying:

…The data show how difficult it is to reduce poverty. We remain a country with significant child poverty and particularly high rates of poverty among Māori and Pasifika communities, which is very concerning.

Another interpretation would be that rather than it being ‘difficult’ there has just been no effective policies, especially in the last two years. We can expect now that merely increasing incomes will be even less likely to show an impact. One reason is that balance sheets of the poorest families have become seriously eroded as year after year the deficits have been filled with borrowing and a run down in assets. Debt servicing makes any deficits even worse.

Another reason is that to improve our stats in a cost effective way, means ways of pushing more support to the lowest income groups will have to be found. 

Just because child poverty is now more intractable is no reason not to try serious policies to turn the trends around. Indeed it is absolutely imperative that these trends are rapidly reversed for all our futures. Fortunately, there are things that can be done and done quickly given the political will.

Here is a meaningful start. 

  • Immediately pay the full Working for Families tax credits to all low income families instead of leaving the poorest out, to fall further behind. The value of the IWTC in July will be almost $100 per week per family and 222,400 children would benefit. To join this onto the family tax credit so all get the same access would cost roughly $600m. The fact it is so expensive gives some indication of the amount that has been denied every year to the worst-off over the last 18 years.
  • Immediately adjust the WFF threshold from the fixed 2028 figure of $42,700 to $53,700 and reduce the rate of abatement to 20% to take the pressure off families in full time low paid work. This would give them up to $3400 pa more and could cost another $680m.
  • Annually adjust all aspects of benefits and Working for Families, including thresholds, for wages (or prices if prices rise more rapidly).

Of course other policies should be also used to reinforce income improvements. Bed in a decent lunch in schools programme with secure funding, improve child care subsidies and subsidise public transport for the young for example. Find ways to rebuild shattered balance sheets, especially in housing. Reduce the impact of debt including student loans with debt forgiveness programme.

So how can this be paid for? Here is one suggestion that would not increase poverty.  Clawback 10% of NZ Super ($2 billion a year) from the wealthiest Superannuitants who would hardly notice with a modified surcharge as set out here: New Zealand Super as a basic income.

 



33 COMMENTS

    • No one ever addresses the corrupt who will intercept this relief package in some way or another and keep it all to themselves leaving the people with nothing. This can be circumvented by harsher tax. Seizures. Or plain old arrest.

    • Well that would be back to the policies of the early 1980’s. We know what happened next: corporate lobbyists from the Mont Pèlerin Society and the Atlas Network managed to take over both political parties, and slash-and-burn “shock therapy” from the ‘Chicago Boys’ followed.

      • New Zealand has list its Zeal. We need people who can come up with new ideas and innovation and get that dynamism back. People need to be able to come up with goid ideas and get compensation for it from all walks of live.

    • Absolutely @ C.P. Preceded by grabbing the 14 multi-billionaires, the 3118 multi-millionaires, the ones with $50 mil net each and the four now foreign owned banksters, ANZ, BNZ, ASB and Westpac who take $180.00 a second 24/7/365 by the balls then squeeze them until they cough up our taxes built assets and our cash money back to us.
      Who voted for luxon, peters and seymour? You’re to blame for this, and what’s about to hit us. This is on you.
      It’s clear to me that you don’t need an intelligence to become rich. You just need to have a conscience-deficit then stick to the rules of the game. Remember? Anyone can become a billionaire or a millionaire. All you need is to have soulless, self entitled access to everyone else’s money.
      But those of us who don’t wear blue goggles will know this, so to them I ask; what are we going to do about [it]. Re the image above. Adern is a rogernome. She was a Blarite. During her tenure as PM she said many things but none of them mattered. She never addressed the critical fundamental elements of our politic that enables multi-billionaires, multi-millionaires and the invasion of our economy, which is entirely agrarian I should point out, by the rapacious greed of now four foreign owned banks. That should surely then pose the question; what can we do? What. Can. We. Do? Financially, our dopy farmers earn our money but they’re too fucking stupid to comprehend just how important their role is in the security of our AO/NZ. It’s a fact! Smart farmer kids went to Uni and never came back except for Christmas. The dumb farmer kids stayed at home and farmed with dad until dad dropped dead in a paddock. Then, dumb kid starts farming. Several generations of stupid breeding later and you have farmers adoring their abusers while paying heavily for the privilege.
      Our farmers in unity with Maori could save our souls. And a quick word to Maori. @ Maori. This is the 21st century. This is about unity and it’s about class and expressing strength through respect. It’s not about crime, stereotyping and latent hate. Those elements are the most deplorable of human characteristics but worse they’re exploitable by our common enemy, which is exactly what luxon, peters and seymour are doing and planning as I write. They’ll divide and then they’ll concur. The Three Stooges are boldly going to bash the poor, and Maori are far too well represented on the poverty scale here in Aotearoa / New Zealand.

    • Ubi will just create additional bureaucracy.

      First, housing costs should be restricted to percentage of income.
      Second, beneficiaries ought to be encouraged to work, by allowing them to keep more of their honest income, before benefits gets adjusted.
      Classes such as cheaper cooking, parenting, self care, cleanliness and hygiene are some classes that ought to be run free of cost by local whanau.

  1. The biggest contributor to poverty is housing costs. Successive governments failed to enable more housing to be built.
    Until a lot more apartments are built, increasing rents will eat up any benefit increases.

  2. “Given the political will”

    Indeed.

    Evidently, there is no real political will to sufficiently address this.

    And that is the problem.

    • So you are prepared to give up on universal super entitlement to lift families out of poverty.

      Let’s have that debate. Some political leaders and most politicians refuse to even have that debate!

      Means testing pension entitlements is easy and contrary to what the naysayers argue, it is not hard to implement.

      • No, NZ Superannuation should remain universally available, but beneficiaries with other income should be taxed severely on that other income.
        Nearly 50,000 beneficiaries of NZ Superannuation are collecting $1.1 billion a year in benefits while also getting more than $100,000 each from jobs, investments and private pensions.
        Yet Super is not enough to live on for the beneficiaries who really need it: retired jobless renters with no assets and no other income.
        We need to recognise that NZ Superannuation is a social welfare benefit to spare have-nots from living their final years on the streets in poverty.
        Many people, regardless of ethnicity, are broken and unable to work long before they reach the NZ Super qualifying age of 65; and of those who survive till then, many will be renters with no savings.
        NZ Super needs to be reconceived to be aimed at the person who reaches 65 with no home, no savings, and no job or possibility of work.
        The single-person-living-alone benefit for 2023-24 is a net $496 a week.
        Massey University’s FinEd Centre reckons that person really needs $826 a week for a no-frills ‘metro’ retirement (presumably in Auckland) or $690 a week in the provinces. Both much more than $496 a week.
        The single-person-living-alone weekly after-tax benefit needs at least to be increased from $496 to that ‘provincial no frills’ $690.
        That would still leave the retired renter struggling to pay the bills, especially in Auckland.
        Yet it would be an unneeded bonanza for those 50,000 beneficiaries already getting $100,000 a year from other sources.
        Something needs to change.
        We need to increase NZ Super to be enough for the retired poor to live on, yet, to keep it both universally available and affordable, discourage those who have no need of it from signing up for it, or trim their extra feathers if they do.
        That will require reintroducing some form of the surtax or surcharge on other income that was abolished in 1998. And that is something that can only be accomplished by the major parties, National and Labour, agreeing to do it together.
        It’s time for some statesmanship.
        https://figure.nz/chart/2eIStXKBWssxMIze

        • A hard no!

          Then you go on and create a complex “policy” that will achieve less for those who need care than means testing old people before helping them financially.

          How stupid is that? How profoundly political!
          There is an excuse for being stupid!!

      • so people are forced to contribute to an insurance scheme for their entire lives only tohave it stolen huh jkt?

        • Taxes are used by government to provide public services. How taxes are spent determines what our society looks like.

          If we want a society where a uniform allowance is handed to everyone once they turn 65, irrespective of need, that is what taxes will be spent on. How these “beneficiaries” allocate their surplus funds will determine the outcomes.

          You like what you see then “let’s do this”.

  3. Yes , and surely the likes of Luxon with his 7 mortgage free houses can afford to go off his accomodation benefit, now $52,000 a year.He could do it voluntarily without even noticing .

    • You are very angry, Francesca.

      St John is right that we as a society can do better. Society needs to face up to the challenges.

      We need to care more about people than to insist on equality of outcomes when that very idea is such a destructive ideology. Gang bangers become victims……. and actual victims become oppressors.

      Our fixation of entitlements as manifested every time universal super entitlement gets raised does not make our society better. But then again, it is always easy to give what other people own away, is it not, Francesca.

    • indeed the idea that just children can be pulled out of poverty without their parents is total fuckin nonsense the way to do it is increase benefits now..yup some parents will make bad decesions and the money will go on fags and beer but many will not and might be able to afford food/rent etc….it’s not difficult except like the nats it’s an ideological question that’s divorced from reality

      • We tend to work for reward. Give low income parents a regular rise in their income, sufficient for some practical purpose eg $5 per day – $35 weekly, enough to buy a decent mixed grain loaf of bread, 6 eggs, 4 sausages, 1 litre milk – useful things to eke out the food budget. And with no reduction on any grants already paid out which is the creepy, malicious, mendacious practice of the welfare department of whatever name, and has been for some time. Give one thing with one hand and take back 1+ with the other.

        Then run NCEA classes on parenthood, with different levels covering differing ages, for every one passed an increase in benefit and privileges say ability to apply for non-repayable grants. The student can get a Diploma in Parenting at the successful end. And attendance of 75% of one term of classes would also give a rise in benefits. A bus would go round an area and pick up and drop off members of classes, so people would encourage friends and family to go. Result better parenting with less waste of money than leaving the poor bennies to drown their sorrows with no apparent way forward.

        Thinking and working with people and finding out where they would like to be if they had the chance, and how they would like to work towards that. Not expecting perfect results, just steady improvement and willingness to keep trying if having fallen back. Give people a chance FGS. With that approach, help of the right kind at the right time, there would be a 50%? rise in criteria showing positive improvements. Nothing less will turn things around!!

  4. Susan St John this is long and what has come to mind in reply to the question – Is child poverty really too hard to cure? You may not want to put it up, as it may block others from putting forward their thoughts on the subject; or put it up later or just set it aside for now or permanently. I find it depressing and sad but from what I have experienced and read and seen I feel this is the future. Still I hope we could do better – but humans can compartmentalise their brains and do so well, forget at will, remember incorrectly, deviously behave. It could happen as strangely as the behaviour in The Handmaid’s Tale for instance.

    This is my rotten thought that I usually push to the back of my mind but I am putting down once only as I have seen hopes for a better future dissipate over many decades. There is so little thought being put into our underlying values and how we should care and treat each other in NZ/AO and the world, that I am forced to consider the following. Conserving our good behaviour is under attack from popular culture and lack of commitment to each other, always under pressure from our wants and selfish desires for wealth exchange. Watch what happens when someone dies and the family gathers round for division of assets! Kindness and generosity is fleeting inspired by emotional pleas. Think Ayn Rand the Virtue of Selfishness which typically for society, swings too far from the other side of behaviour, which is abnegation of self for others. We may be running out of time to consider, adopt and reject pendulum swings and be stuck by circumstances and fast irreparable change in an extreme position from which there can be no timely recovery.

    A co-ordinated society, looking after each other does require some unselfishness; it is necessary to some extent. The disclosures about Lake Alice and continuing callousness, and what goes on in our prisons and the difficulties of parents to access appropriate housing and other needs just fall on deaf ears at present, when we are comfortably off and in a position to change completely for the better.. We seem open to whatever new wave of human feeling comes along. No goodness is held strongly enough through our society to prevent behaviours that are destructive to things we say we hold sacrosanct.

    It seems that we don’t believe in children any more, which echoes probably the seeming attitudes of the glutted avaricious who use politicians as puppets. They think along these lines; if we want children we can get them fashioned for us. The ordinary people can’t manage them or provide for them, and the world is overpopulated with insufficient resources. Technology can fill any gaps there are around. It seems to me, that having babies, children will become a licensed undertaking which must be applied and paid for.

    To attempt to live out a traditional human life, one will have to join wealthy ‘charities’ or cults eg Gloriavale etc. There was a giant Moon organisation; the latest on the Moon cult – https://www.cbsnews.com/news/unification-church-japan-moonies-tax-exempt-religion-status-victim-compensation/ ($67 million victim compensation). Groups that seem modern like Scientologists or traditional like Amish in the USA will pursue moulded lifestyles and co-operate to some extent with the governing powers. They will have parameters within which members will have freedoms and be granted some rights to personal living styles. Some will later be threatened with change or closure and choose a Masada-like end. https://en.wikipedia.org/wiki/Masada

    Faith Popcorn is a person and a brand who forecasts future business trends and also looks at people’s likely lifestyles. More and more these are influenced by business so what her business has been saying may show our possible future.* We used to have religions spiritual values, abandoned now to supposed factual rational science. Religion has been undermined by business and self-indulgence, and warped by deciding human behaviours are essentially non-religious. In trying to reach some high plane in religion, material values have crept in and displaced appreciation of our good natures and potentials. The ephemeral values of heaven and spirituality are abandoned as foolish and replaced by the ephemeral values of money which exists through an attitude of mind as heaven does; but requires thinking about which is out of fashion.
    * https://www.fastcompany.com/90732637/3-things-youre-doing-wrong-when-you-try-to-plan-for-the-future

    We want easy answers with pictures from our tech devices. What to do – disagree with unpleasant thinking – ban it and lock Assange and his like up till they die? Life should be easy as for the dwellers in Aldous Huxley’s Brave New World. https://en.wikipedia.org/wiki/Brave_New_World John Wyndham’s books tend to be about the quest for a human, loving lifestyle. Young Adult author John Christopher is very readable on what choices we might have to make in fashioning society. But reading is essential. We could set up groups who give away their television and talk about what they read. Maybe we could get new paths drawn from our own questioning brains. The story of Temple Grandin who I think is autistic illustrates an individual sensibility, different from others. We must work on developing similar in ourselves because following the mainstream is limiting our futures., yet we must fix on practicality and kindness to retain our humanity. https://en.wikipedia.org/wiki/Temple_Grandin

  5. Pretty simple as you outline — worth a campaign like the ‘Living Wage’, our great Left success.
    Just contrary to the Right’s agenda, which relies vitally on scape-goats. ACT supporter Damien Grant brought up the billions of ‘waste’ by our general Superann, so we have a way in, a crowbar gap, with this govt.

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