Māori, Pasifika and households with disabled children are more than twice as likely to be experiencing poverty compared to Pākehā, the latest statistics show.
The new poverty figures show while the Government is on track to meet two out of three of its child poverty reduction targets, those gains are being unequally felt, which experts have called "shocking" and "disappointing".
There are also warnings any of the minor improvements would be undone by the hardships of Covid-19, with the lockdown months excluded from the survey/
The data released by Statistics NZ today, which includes nine different measures, also show housing costs continuing to have a strong impact on the number of children living in poverty.
The annual measure only takes into account the nine months to March 2020, and has surveyed 15,000 families rather than 20,000 as in previous years.
The data deliberately does not include April, May and June because the Ministry of Health did not want officials undertaking face-to-face interviews, given the Covid-19 risks.
Given the lag period of the data, the numbers only take into account child poverty levels from between July 2018 and March 2020.
This is because families were asked about their experiences in the 12 months prior to the survey, which was taken between July 2019 and March 2020.
The data range took into account most of the first year of the Government's $5.5 billion Families Package, which came into effect in July 2018.
Over the two years since the Government introduced child poverty reduction targets, progress has been made across all measures.
For the 2019/2020 period, about one in seven New Zealand children (167,100) lived in households with less than 50 per cent of the median disposable income before deducting household costs.
This was slightly down from one in six in the year to June 2018, but a slight increase from the year to June 2019.
In a statement after the numbers were released, Prime Minister Jacinda Ardern said the figures showed a "broad improvement" in child poverty rates.
"Today's numbers demonstrate our actions to reduce child poverty are making a real difference in children's lives, and they are a promising indication our goal of halving child poverty within 10 years is on track."
Ardern said it was encouraging to see that child poverty has reduced against all nine official measures, when compared to the baseline year.
Factoring in housing costs, 18.2 per cent of New Zealand children - 208,400 or about one in five - lived in households with less than 50 per cent of the median disposable household income - a reduction from 22.8 per cent in June 2018.
Material hardship affected about one in nine children in the latest data, compared to about one in eight as of June 2018 - a reduction of about 20,000 children.
While there were mostly even drops across ethnicities, vast inequities continue to persist.
For Pasifika, one in four children (25.4 per cent) were in households experiencing material hardship, and one in five for Māori (19 per cent). This was compared to about one in 11 Pākehā (8.6 per cent).
Material hardship is defined as going without at least six of 17 common things defined in the Household Economic Survey. These are things such as going without fruits or vegetables, and visits to the doctor.
This year's data also included households with disabled children for the first time.
It found disabled children were more likely to be in low-income households than non-disabled children, and one in five (19.9 per cent) were experiencing material hardship - more than double the rate for non-disabled children.
Inequality was even more profound when looking at severe material hardship, defined as the proportion of children in households earning with less than half the disposable income of the average household.
Overall this had dropped from 5.8 per cent of children (64,800) in the baseline year to 4.6 per cent in 2019/2020.
For Pasifika this had dropped from 14.3 per cent to 11.5 per cent from 2018/2019 to 2018/2019, and for Māori 11.1 per cent to 9.3 per cent.
While for Pākehā it had dropped from 4.1 per cent to 3.3 per cent.
Speaking to reporters this morning, before the data was publicly released, Ardern said it was important to keep in mind that today's figures won't pick up the effects of Covid-19.
They also didn't pick up the benefit increases, the indexation of benefits to wage growth and the doubling of the winter energy payments last year.
"We know that there is more work to do, but we estimate over 100,000 households with children are on average over $100 a week better off as a result the full range of changes the Government has made to date."
But Ardern warned that Covid-19 has increased financial pressure on many families.
This increased hardship would likely be reflected in next year's figures.
"There is no silver bullet to fixing the long-term challenge that is child poverty, but today's numbers show the actions we have taken so far are working and we are making progress as we continue work to make New Zealand the best place in the world to be a child," she said.
Child Poverty Action Group spokesperson Innes Asher said the nine measures showed no statistical change over the 21 months to March 2020.
"Although not surprising, these pre-Covid statistics overall are deeply disappointing. For families with disabilities, they're absolutely shocking.
"We're particularly worried as we know child poverty will have increased due to Covid-19."
Asher said the Government needed to take on the recommendations of the Welfare Expert Advisory Group, including raising benefit levels.
"Seven out of every ten New Zealanders want the Government to increase income support - these statistics show a significant increase is necessary in order to reduce child poverty."
The CPAG's Dr Keri Lawson-Te Aho said the statistics showed "entrenched, compounding inequities with our tamariki Māori and Pacific children bearing the brunt of racial discrimination".
"In order to meet its Tiriti o Waitangi obligations, the Government must reprioritise, and have the reduction of poverty for tamariki Māori at the core of all its policies."
Children's Commissioner Judge Andrew Becroft said while the drop in children in material hardship was "fantastic", "bold action" was needed to ensure the gains were maintained through Covid.
Assistant Māori Commissioner Glenis Philip-Barbara said it was clear incomes needed to be raised to support a decent standard of living.
Her office was calling for benefits to be increased by between 12 and 47 per cent – in line with the recommendations of the Welfare Expert Advisory Group – along with solutions to rising rents, and in-kind benefits such as free medical care to age 18.
This year's figures come a week after the Salvation Army released its annual State of the Nation report, which showed in the last year there were 23,000 more children now living in benefit-dependent households.
Government emergency food grants have risen three-fold since 2017 and last year totalled 1.5 million. The Sallies distributed 113,000 food parcels themselves in 2020: nearly twice as many as the year before. Auckland City Mission, marae and other agencies that run foodbanks report similar stories.
The Sallies also reveal that rents have been rising steadily for years and the fastest growth is in the lowest quartile. That is, since 2015, the poorest quarter of New Zealanders who rent have faced the largest rent rises.
The Families Package, which was funded by cancelling the previous National government's planned tax cuts, will cost $5.53 billion over five years.
The Government estimates that by 2020/21, when the package is fully rolled out, some 384,000 families with children will be better off by about $75 a week. It is projected to lift the number of children living out of poverty by 64,000, or about 41 per cent, by 2020.
By 2020/2021:
• Reduce number of children living in poverty before housing costs from 16.5 per cent in the 2017/18 baseline year to 10.5 per cent – reduction of around 70,000 children. 2019/2020 result: 14.6 per cent - target not met.
• Reduce number of children living in poverty before housing costs from 23.5 per cent in the 2017/18 baseline year to 18.8 per cent – a reduction of around 40,000 children. 2019/2020 result: 18.2 per cent - target met.
• Reduce number of children experiencing material hardship from 13 per cent in 2017/18 to 10.3 per cent – a reduction of around 30,000 children. 2019/2020 result: 11 per cent - target not met.
By 2027/2028:
• Reduce the number of children living in poverty, before housing costs, to 5 per cent.
• Reduce the number of children living in poverty, after housing costs, to 10 per cent.
• Reduce material hardship to 6 per cent.
The prison population is expected to reach nearly 14,000 in a decade.