Key Points:

The Labour Government's performance on child poverty and hungry kids has been abysmal in recent weeks. Labour has been stung by National leader John Key's criticism of appalling levels of poverty throughout our low-income communities.

It's right that Key should take some ownership of the issues, as it was his party's policies from the 1990s which drove working-class New Zealanders into poverty in their hundreds of thousands, then held them there.

When Key talks about people being trapped on the bottom of the social ladder he should have added that it was National's Ruth Richardson and Jenny Shipley who smashed the rungs.

But at least Key has a coherent view. He sees the solution as donations from businesses and more government funding for community groups working with families. It's a charity model based on the philanthropy of Victorian England, whereby the undertaxed rich patronise the deserving poor.

It was summed up neatly by Key hosting 12-year-old Aroha Ireland at Waitangi, parading her like a trophy. Readers of Oliver Twist will recall how his benefactor showed him off to his friends. We are back to Dickensian England with Key.

But Labour's response has been an embarrassment. Prime Minister Helen Clark tried to downplay levels of poverty, and the best Education Minister Steve Maharey could offer was that "low-income parents don't need this kind of patronising attitude that comes from people like John Key".

Fair comment. But where are Labour's policies to eliminate poverty?

Labour has trumpeted low unemployment as a measure of improving living standards, and when Labour MP Phil Goff visited McGehan Close he proclaimed that things were not as bad as Key suggested. Eighty per cent of the people in the street were employed, Goff said. Undoubtedly true, but not helpful.

It doesn't help the Samoan father of three who told me he works 50 to 60 hours each week (no overtime rate) on a 6pm to 6am security roster earning $13 an hour. His wife has a cleaning job for $10.75 an hour from 3pm to 8pm four nights a week.

A teenage cousin of the children looks after them when both parents are working. The father worries about his 10-year-old boy getting into trouble at school. Is it any wonder? At the heart of the problem is our low-wage, part-time, insecure and anti-social employment.

Labour and National together destroyed tens of thousands of quality manufacturing jobs in the 1980s and 1990s and replaced them with poor-quality, service-sector jobs.

Even now under Labour, families in low-income communities have gone backwards. A Ministry of Social Development report last September confirmed that poverty is on the increase, with 8 per cent of the population in the "severe hardship" category - up from 5 per cent in the previous survey in 2000 after Labour took charge.

The proportion of children in families under severe or significant hardship increased from 18 per cent in 2000 to 26 per cent in 2004.

For Maori and Pacific families the figures are even more sickening. Pacific families suffering severe hardship increased from 16 per cent in 2000 to a staggering 30 per cent in 2004.

It is no surprise that the figures in the Herald this month showed 40.8 per cent of Pacific Island children (7.7 per cent for Europeans and 22.9 per cent for Maori) go to school without breakfast. Labour should hang its head in shame.

The Government claims these figures will have improved since the Working for Families package. True for some families in stable employment but we still have hundreds of thousands living in poverty with no plan to move forward.

Labour says it has raised the minimum wage by 46 per cent since 1999 but business profits have increased 54 per cent over the same period. The average wage increased by just 20.5 per cent - and, in real terms, has decreased by 20 per cent in 20 years.

Finance Minister Michael Cullen rubbed it in last year when he called for wage restraint and told workers: "You can't expect wage and salary increases to compensate you for what are major shifts in relative prices over which we ourselves have no control."

So while workers' wages increased by just 3.1 per cent in the year to March 2006, inflation was 3.4 per cent.

Cullen received a hefty 8 per cent increase - up $18,300. So while working people continue to suffer cuts in their real take-home pay, the wealthy surge ahead.

Working for Families is, in reality, a state subsidy for businesses that pay poverty wages. Both Labour and National prefer to subsidise wage levels with government funding rather than pressure companies to convert high profits to wage increases. And Labour's next move is to reduce company tax ... the low-paid come a distant last.

It is true that Labour inherited an appalling situation but it doesn't have the policies or the will to make real changes.

Instead of corporate welfare, New Zealand needs policies based on full employment and breadwinners earning enough in 40 hours to support a family at a reasonable standard.

Couple this with raising the minimum wage and pegging it to 75 per cent of the average wage and we would have a policy to let families fly and end the problems associated with alienation and dysfunction.

With these two policies in place we could abolish the dole.

Instead Labour, like National, shows the same lack of faith in people to run their own lives and communities. Labour's tenure in government is a disgrace.

The very Pacific people who so loyally and consistently vote Labour are the very ones slapped in the face by a party which puts the free-market at the centre of the economy instead of working New Zealanders and their families.

Labour MPs might reflect on this when our predominantly Pacific Island cleaning staff - who work long, unsociable hours - receive just a 35c an hour increase in pay this year. Not enough to buy a cup of coffee at the end of a long hard shift.

What else has Labour given to Pacific Island families - Taito Philip Field. What more can be said?

* John Minto is spokesman for Global Peace and Justice, Auckland.