Jonathan Boston: Three myths about child poverty

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Why some widely held beliefs on the causes and solutions are wrong and why it matters to put things right.

There are well-established, internationally recognised methods for measuring poverty. Photo / Getty Images
There are well-established, internationally recognised methods for measuring poverty. Photo / Getty Images

Myth 1

There is little or no child poverty in New Zealand.

The evidence suggests otherwise. There are well-established, internationally recognised methods for measuring poverty. These can be used to track trends in poverty rates over time and between countries.

One commonly used poverty measure is the proportion of the population living in households with less than 60 per cent of the median disposable household income, after housing costs. This is a relative poverty measure. On this measure, 25 per cent of children were in such households in 2011. This represents about 270,000 children. Such figures compare unfavourably with those in Australia and many European countries. The situation was even worse a decade ago when close to 30 per cent of children lived in poverty. Yet in 1986 the figure was only 11 per cent.

Using a more demanding income threshold, around 170,000 children or 16 per cent are living in households receiving less than 50 per cent of the median disposable household income, after housing costs.

This compares with about 10 per cent in Australia.

Poverty rates can also be assessed in constant value or real terms over extended periods of time. On this basis, the children in the poorest 15 per cent of New Zealand households are no better off today than 30 years ago. This is despite a substantial lift in average real per capita incomes since the early 1980s. This highlights that economic growth alone in not enough to overcome child poverty.

Another way of measuring poverty is to consider how many households cannot afford certain items which the majority of people believe are essential. This includes keeping one's home adequately warm, possessing a phone and a washing machine, and paying important bills on time. This measure of poverty focuses on hardship or deprivation rather than income.

As the accompanying table shows, child deprivation rates in New Zealand in 2008 were around 18 per cent. This compares with rates of 6-7 per cent in the best performing OECD countries.

Worse, many children experience persistent deprivation. The international evidence suggests that such children are at particular risk of bad outcomes later in life. This includes poor educational attainment, higher unemployment, poor health and a higher incidence of crime.

Myth 2

Children are poor and deprived mainly because their parents are bad, mad, foolish or indifferent. In other words, children are going to school hungry, have worn-out cloths and shoes, and live in cold houses because of poor, incompetent parenting. Every family has enough income, it is claimed. The problem is simply that some people don't know how to live within their means.

No doubt many parents struggle to cope with life, make unwise decisions or get trapped with high debt. Some suffer poor mental health or have drug, alcohol and gambling problems. These issues are real and need addressing.

But there is little hard evidence that poor people, as a group, are much worse than rich people in their capacity to manage their finances. The primary problem is that some parents simply don't have enough income to provide adequately for their children. And this includes many people who are in part-time and full-time work.

To those who say that children are deprived because their parents are incompetent or don't care, consider the following: whereas about 18 per cent of New Zealand children live in hardship, only 3 per cent of those aged 65 years and older suffer the same fate. Why are so few older people materially deprived?

The answer, very simply, is that governments have implemented policies to minimise deprivation among the elderly. By contrast, New Zealand society has chosen to tolerate significant child deprivation. We could choose otherwise.

Myth 3

We cannot reduce child poverty simply by increasing the incomes of poor families. Throwing more money at the problem, it is argued, doesn't work. For instance, it is claimed that the additional funding for low-income families provided via the Working for Families package, introduced seven years ago, has not reduced poverty.

Such claims are flawed. There is good international evidence that increasing the incomes of poor families, especially those with young children, improves educational, health and employment outcomes. Likewise, the Working for Families package has lifted tens of thousands of children out of poverty and significantly improved the financial circumstances of many other families. Broadly comparable policies in other countries have had similarly positive impacts.

But Working for Families is only part of the answer. More needs to be done, especially for the children of beneficiaries.

But what policy mix is best is by no means straightforward. There are various ways of increasing the incomes of poor families and not all of these are equally cost-effective or fiscally prudent. Moreover, while more money certainly helps, appropriate in-kind assistance is also important. This includes policies to address poor housing conditions, improve access to health care, educational and other services, and enhance employment opportunities.

How, then, can we improve the circumstances of the most deprived children in this country? How can we ensure that New Zealand is a great place to live for all our children? Over the past seven months, the Expert Advisory Group on Solutions to Child Poverty, established by the Children's Commissioner, has been assessing the best available international and domestic evidence on how to reduce child poverty and mitigate its effects.

I am the co-chair of this group, together with Dr Tracey McIntosh, of the University of Auckland. In late August we issued a discussion document outlining our initial proposals. We have also prepared 20 Working Papers on a multiplicity of policy issues. These are available on the website of the Children's Commissioner.

We would greatly welcome your feedback on our ideas and proposals. In particular, we would like to hear your views on what you think can make the most difference.

We will take your views into account as we prepare our final report.

In sum, child poverty in New Zealand is unacceptably and unnecessarily high. It can be reduced, and it ought to be. Doing so would constitute a great investment in all our futures. But it will require public support, sensible policies, sustained effort and political will.

Jonathan Boston is professor of public policy at Victoria University and co-chair of the Expert Advisory Group on Solutions to Child Poverty.

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- NZ Herald

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