Stats NZ figures released today show economic pressures affecting children. Photo / 123rf
Stats NZ figures released today show economic pressures affecting children. Photo / 123rf
The high cost of living and higher levels of inflation are leading to more Kiwi children living in poverty and experiencing material hardship in the year to June compared with the previous year.
It comes amid fears the coalition Government’s policies will send more households below the poverty line, specifically its move to link benefit increases to inflation instead of wages.
The data release from Statistics NZ today showed increases in the three primary metrics used to measure poverty in the year to June 2023 compared with the year to June 2022, however, they hadn’t exceeded levels from 2018 when child poverty reduction targets were introduced.
On children in poverty after housing costs, there was a 3.1 percentage point increase to 17.5 per cent in the year to June, up from 14.4 per cent in the previous year - translating to one in every six children living in poverty under that measure. This was an increase from 166,200 to 202,100 children.
There was also an increase in children living in households experiencing material hardship, meaning they went without basic needs such as fresh fruit and vegetables and doctor visits and had to put up with being sick.
In the year to June 2023, 143,700 children - roughly one in every eight - were considered to be living in material hardship, up from 120,300, which was an increase of two percentage points.
Statistics NZ social and population insights general manager Abby Johnston said it was clear the high cost of living and higher levels of inflation over the survey period were reflected in the data.
Material hardship felt by tamariki Māori was higher compared with that of the total population, with one in five experiencing material hardship. It was also higher for Pasifika children, with one in four experiencing material hardship.
Victoria University of Wellington professor of public policy Jonathan Boston said the “modest” reductions in child poverty made since 2018 indicated the challenge facing those attempting to reduce it.
“[The data] tells you that poverty reduction is hard and we remain a country with significant child poverty and particularly high rates of poverty among Māori and Pasifika communities, which is very concerning.”
Victoria University of Wellington public policy expert professor Jonathan Boston.
He wasn’t surprised by the increase observed over the past two years of reporting, citing higher prices for essentials such as housing, food and power.
Boston felt the Government’s decision to change how benefits were increased meant child poverty statistics were unlikely to improve.
“My expectation is that on at least some relevant poverty measures, poverty rates will deteriorate over the coming few years.”
When tied to inflation, beneficiaries’ incomes tended to fall behind those of other households, whose incomes rise with wages. In 2019, the Labour Government made the change to link benefit increases to wages but the current Government has reversed that change.
Officials warned the Government the number of children living in poverty would likely increase by 7000 in four years as a result of benefit changes. One estimate predicted that as many as 13,000 extra children would be in poverty by 2028.
Council of Trade Unions economist Craig Renney, also a former staffer of Labour’s Grant Robertson, said the benefit changes, together with the minimum wage rising less than inflation, would have adverse impacts on the most vulnerable Kiwis.
“All of these things are likely to make meeting those child poverty targets not only more challenging but actually putting more children into poverty in the future.”
KidsCan chief executive Julie Chapman called on the Government to invest more to address child poverty. pointing to the hundreds of schools and early childhood centres needing support.
“Housing costs are consuming far too much of people’s meagre incomes, forcing families to work multiple jobs to put food on the table.
“It’s not just parents working – it’s their children too. It comes at the expense of their education, and that’s not something we should accept.”
Prime Minister Christopher Luxon, speaking to reporters in Christchurch, said central to his plan to reduce child poverty was to decrease the number of people relying on welfare and get them into work.
He recently detailed his Government’s intention to apply currently available sanctions to beneficiaries who weren’t fulfilling their obligations, saying the “free ride is over” for people on welfare not trying to transition into work.
Unicef programmes and advocacy director Teresa Tepania-Ashton said this approach, tied with the recent benefit changes, would mean families were at risk of being further burdened.
“New Zealanders want to live in a country where children have what they need to thrive, not a nation where we deprive children of the basics because of political choices,” she said.
“We encourage the Government to continue to engage with evidence-based policy and the social sector before making any further changes to the welfare system that risk putting innocent children deeper into poverty.”
In March last year, the most recent data at the time showed nearly 120,000 Kiwi children were struggling to get by. Overall, the number of children in child poverty had trended down slightly in the year to June 2022, continuing an overall gradual decrease in eight of the nine measures since.
Since 2018, 77,000 children were living in poverty after housing costs were factored in, and 28,700 fewer children were experiencing material hardship.
The targets for 2023/24 included:
Reduction in the before-housing-costs measure from 16.5 to 10 per cent – lifting around 70,000 children out of poverty
Reduction in the after-housing-costs measure from 22.8 to 15 per cent – lifting around 80,000 children out of poverty
Reduction in the number of children experiencing material hardship from 13.3 to 9 per cent – lifting around 40,000 children out of hardship
