Child poverty in NZ: The verdict on this Government’s action - Max Rashbrooke

OPINION

The latest child poverty figures show the Government is not on track to reach its reduction targets, to put it mildly.

In 2018, Labour set very demanding targets for reducing poverty.

Illustration / Rod Emmerson

For instance, it wanted the first measure (families on less than half the typical income) to be slashed from 16.5 per cent in 2018 to just 5 per cent in 2028 – a massive reduction that would make us one of the world’s best performers.

On the other hand, the fact that poverty remained basically flat in the year up to June 2022, could be seen as a remarkable achievement given the ongoing pandemic and an incipient cost of living crisis.

There are three main ways to measure poverty (in the Child Poverty Reduction Act).

The first, the number of children in households with less than half the typical income has fallen from 16.5 per cent (183,000) in 2018, to 13 per cent (149,000) in 2021, to 12 per cent (138,000) in 2022.

This tells us how well poor families are keeping up with average ones.

On the second, the number of children in households with less than half the typical 2018 household’s income after housing costs are deducted, has fallen from 22.8 per cent (254,000) in 2018, to 15 per cent (172,000) in 2021, to 15.4 oper cent (177,000).

This tells us whether poor households are getting richer relative to a fixed point (2018) and after housing costs are considered.

On the third, the number of children in households saying they can’t afford six or more basic items (fresh food, heating their home, etc) has fallen from 13.3 per cent (148,000) in 2018, to 11 per cent (126,000) in 2021, to 10.3 per cent (119,000) in 2022.

This tells us how many families are struggling to meet everyday costs.

One in five Māori children, and one in four Pasifika, are in poverty. Children with disabilities also experience much higher than average rates of poverty.

That said, on all key measures, tens of thousands of children have been lifted out of poverty since 2018.

This relatively positive picture may seem hard to square with the constant media coverage of people sleeping rough, soaring foodbank use, increased hardship grants, and so on.

Evidence of foodbank use, truancy and other issues suggest that misery and social problems may be compounding among the very poorest.

There is, however, there is no one story of poverty.

Tens or hundreds of thousands of families have benefited, since 2018 and in the last year, from rising minimum wages, benefit increases, the Best Start and winter energy payments, and boosts to Working for Families.

These policies will have helped many families either lift themselves out of poverty or (just) remain above the line.

It is entirely possible that, at the same time and thanks to things such as Covid-19, the very poorest families – the hundreds or low thousands using foodbanks, sleeping rough and so on – are experiencing deeper and more desperate poverty.

Max Rashbrooke. Photo / Supplied, File

The two stories are not inconsistent.

This is especially the case as households without a fixed address are not captured in the data.

What we can see for sure, is that progress on reducing poverty, has slowed to a standstill in the last couple of years.

Overall, the Government has so far made a serious effort at tackling poverty but it has fallen well short of the transformation it promised.

- Economist Max Rashbrooke’s analysis was provided by Share My Super, a charity directing universal superannuation from donors who are fortunate enough not to need it to 12 vetted organisations that help children in poverty. Since it was founded four years ago, Share My Super has raised more than $1 million. It is fully funded by founder and philanthropist Liz Greive.