Luxon’s vision for our children
Waitangi Day was described by our Prime Minister as a time ‘to reflect on the future we want for our country.’ Indeed, and that reflection must involve us all.
In his speech he set out his desire for New Zealand to be:
A country where every Kiwi kid, regardless of their background, grows up seeing huge opportunities right here at home – with schools teaching the basics brilliantly, a growing economy creating jobs and lifting incomes.
Fine words and we should thank him for that but where is his plan to achieve it? Does he really and truly intend for every child to be included? Let’s give him the benefit of the doubt.
It flows then he should be concerned that the children with the poorest backgrounds and the ones furthest from his ideal dream are made even poorer by the design of policies endorsed by his government.
The Guardian recently identified the worsening of extreme poverty in the UK. They measure deepest poverty as incomes under the 40% after housing costs median income. Stats NZ produce the figures for New Zealand’s children and an update to the poverty stats below is due any day now. It can safely be predicted that the 2025 stats update will not improve the picture. Nor will this update reflect the worsening child poverty for 2025-2026 as that will not be reported until 2027.
Nearly a third of NZ children live in families whose income is inadequate for them to thrive, and one half of these is desperately poor i.e. under the very lowest poverty line.
Poverty by design perhaps? Working for Families (WFF) is the weekly payment made to the caregiver to assist low-income families with the cost of raising their children. But its very design excludes the worst-off families from the full benefits.
When parents are disabled or sick or unable to find paid work and need a welfare benefit, their children are further penalised by being denied at least $97.50 of WFF a week for 1-3 children and an extra $15 per child for larger families.
The policy design deliberately uses child poverty to incentivise the parents to get off a benefit.
And, confusingly, it doesn’t matter if the parents are doing their best to do some paid work. If they require a part benefit, the policy design does not reward parents’ paid work but punishes their children because it is not full-time.
Ironically Luxon also said he wants “A country where if you work hard and save hard, you can get ahead”.
Here’s another kicker for Luxon to ponder. It’s not just that ‘poverty by design’ affects those on benefits. Poverty by design is baked into the highly targeted nature of social assistance policies even for those not on benefits so that even when you work hard you simply cant get ahead, let alone save anything.
This poverty trap is real and dangerous to Luxon’s vision.
- Give the full WFF to all low-income families without discrimination against the worst off.
- Lift the income threshold at which a family gets the full WFF to at least $60,000.
- Reduce the clawback of WFF for incomes above this new threshold from 27.5% to 20%.
- Pay for it by taking it (painlessly) from the very top end of NZ Super
