Child Poverty: A Special Report

Just over a month ago, a panel of experts convened by the Children's Commissioner made some dramatic suggestions on how to beat child poverty. Andrew Laxon reviews some of their big ideas

1. Free meals in schools

Children at low decile schools should get free food because many arrive without breakfast or lunch and cannot learn, says the Children's Commissioner's expert advisory group.


"It is deeply disturbing," says the group's co-chairman, political scientist Jonathan Boston. "We're dealing with tens of thousands of children who are coming to school either without breakfast or without lunch, not just a few hundred or a few thousand."

Finance Minister Bill English this week questioned the extent of the problem, which has become politicised since Labour promised last month to provide free food to all low decile schools.

English pointed to recent research, such as a 2009 survey that found almost 94 per cent of children aged 5 to 9 ate breakfast at least five days a week and only 4.7 per cent never ate breakfast.

However, a Herald investigation last year found at least 40,000 children were being fed at school by charities each week and demand was growing. Researchers estimate some New Zealand children's diets are so poor that their brain function is affected. Many more do not learn because they cannot concentrate in class and so disrupt other students.

The Expert Advisory Group asks the Government to take charge of providing food to children in low decile primary and intermediate schools, using existing programmes such as KidsCan, which estimates it could do the job for $3 million a year.

United States-style breakfast clubs have been the traditional option in poorer New Zealand schools but many European countries offer free or subsidised lunches. Some schools here use "grab and go" packaged food, which students can pick up from carts, as they find students do not arrive early enough for breakfast.

Even some supporters of the idea admit there is a moral hazard in taking the responsibility away from parents. Some school principals refuse to supply free food for this reason and KidsCan says it does not advertise its programme to prevent abuse. Newspaper letter writers and columnists have questioned why parents cannot provide cheap, healthy meals themselves.

Boston acknowledges that some parents make bad choices and adds there can be underlying problems such as alcohol, drugs and mental illness. But he rejects the claim that the whole problem can be explained by laziness or wilful neglect, saying there's no question that a lack of money is a significant part of the problem.


2. A warrant of fitness for all rental housing

All rented houses should have to pass a "warrant of fitness" check to make sure they are warm and dry enough for families to live in, says the report.

"Overall, many existing houses are cold, damp and poorly maintained. Some do not even meet basic considerations of sanitation and safety."

Children living in cold, damp, overcrowded houses are far more likely to end up in hospital with respiratory infections such as pneumonia, rheumatic fever and meningococcal disease.

A Wellington Hospital study of 100 children admitted over 10 days found half lived in cold houses and a third in damp houses. Staff said improving the children's housing would have reduced the risk of admission in a third of cases.

Home insulation subsidies, used to upgrade 180,000 houses since their introduction in 2009, are already saving money in hospital admissions, according to early research by Otago University. The researchers estimate the benefits of the Warm Up NZ programme outweigh the costs by 4 to 1 and predict reduced hospitalisation over 30 years will save $32 million.

However, the programme is not reaching most of the children who most need it. The report estimates another 700,000 homes need better insulation but relatively few landlords take part in the scheme because there is little financial incentive.

It proposes the re-introduction of tax breaks or depreciation to encourage this work and the gradual introduction of British-style minimum housing standards, possibly involving a one-hour inspection of features such as moisture levels, mould, insulation levels, heating and safety concerns.

Property Investors Federation president Andrew King says the idea is expensive, bureaucratic and unnecessary.

He says a federation survey of 900 members owning 6000 properties found 82 per cent already had insulation, although the survey did not specifically ask whether the properties were damp or cold.

King says any attempt to prescribe "desirable" features such as insulation, heat pumps or even minimum room sizes could take many houses off the market, disadvantaging tenants even further. "A lot of people would rather have a lower quality rental property and a lower rent ... That's what the customers want."

3. Every child enrolled with health and social services at birth

A series of reports on child abuse and neglect have commented on the problem of children who fall between the gaps in health and social services.

The report's long-term answer is a universal child information database to ensure this does not happen again.

The first step is to enrol every child at birth with a doctor, a Well Child/Tamariki Ora provider (such as a Plunket nurse) and the national immunisation register. Children would be automatically signed up unless their parents chose to opt out.

Children's Commissioner Russell Wills says this already happens in Nelson, where the idea was welcomed by the target group of mothers, who currently miss out on antenatal care and leave hospital within hours of giving birth.

"These women hardly ever don't want to be enrolled, they just have an awful lot else going on. Life is too busy and they're often too poorly supported."

Wills agrees with the report's contention that district health boards have to ensure more vulnerable pregnant women see a midwife well before they give birth. He adds that the midwife needs to gain the woman's trust, then introduce her to the Plunket nurse before the baby is born and to her new GP straight afterwards to establish the new relationships.

"Each of those bits needs to work. It's quite a fragile system - it's very easy for one link to be weak and the whole chain to break."

Even when a baby is enrolled, poor families move frequently and sometimes parents will change the baby's name. Health and social services often lose the child at this point because only one person may have the mother's contact details, which are not passed on.

Wills says Plunket is starting to address this with iPads for nurses, which can update every mother's details immediately and make the information available to GPs or hospitals.

This is the first step towards the common database envisaged in the report.

4. Universal child payment

Prime Minister John Key rubbished this proposal as "a dopey idea", which would pay millionaires to look after their children.

The concept is similar to the old Family Benefit, which was abolished in 1991. It would be paid to all parents for children from birth until the age of 6, starting at up to $150 for babies and gradually reducing until children start school. From this point on, it would be means-tested and further reduced from 14 to 17.

Boston says the group will be guided by public and political reaction but he thinks there are several good arguments for it.

For a start, a universal payment recognises the wider social good of bringing up children and the high costs involved.

It means a parent can get a job or increase his or her hours without worrying about the state clawing back the money for each extra dollar earned. Under the current targeted system, these so-called abatement rates can be so high it is often not worthwhile for a mother on the DPB to look for work.

He compares this with universal superannuation for the elderly, which allows people over 65 to carry on working without any penalty.

Targeting also runs into problems with modern families, which frequently consist of sole parents or blended families with complicated relationships, making it hard to figure out who is eligible for the money.

Universal payments have lower costs and higher take-up rates, so the people who need it most don't miss out. They also keep middle-class voters engaged and politicians honest, Boston argues, which protects children better in the long run.

The child payment would replace the mix of current tax credits, which the report says should be raised in the meantime. Boston sees it as a potentially cheaper alternative to extending paid parental leave, which has been proposed by Labour and rejected by the Government as too expensive.

5. Pass on child support payments

Child support payments should be passed on to solo parents, even if they already receive a benefit, says the report.

The Government currently withholds this money - mainly payments from absent fathers to mothers on the DPB - to offset the cost of the benefit. The IRD says this amounts to $159 million a year for 133,500 children, of whom the group estimates at least 89,000 live in poverty.

The report argues that the Child Support Amendment Bill now before Parliament is driven by the interests of parents, not children. It agrees with moves to base payments on shared care, the income of both parents and childcare costs but criticises the lack of money for younger children.

Revenue Minister Peter Dunne says the Government cannot afford to pass on payments to beneficiary parents. However, he agrees the bill needs to focus more on helping children financially.

"I'm proposing to the select committee officials that we insert into the bill a provision that the welfare of the child has to be taken into account when determining support liability etc.

"We are proposing to have further discussions with the Children's Commissioner about how that can actually work in practice."

Dunne says the new system, which adjusts payments according to a child's age, will be more flexible than the current one "so there may be steps we can take within that".

He says the law change should also solve the problem of late payments, as money can be deducted directly from the absent parent's bank account if they fail to pay on time.

6. Poverty reduction targets to make politicians accountable

A British political campaign to eliminate poverty by 2020 has inspired the group's thinking - with one reservation.

Britain became the first developed nation to pass a Child Poverty Act in 2010, setting explicit targets to reduce poverty and hold politicians accountable.

The move, supported by all parties, appeared to backfire last year when poverty became noticeably worse because of Britain's deep social service cuts in response to the global financial crisis.

But Boston says Britain's recent setback should be balanced against a decade of considerable improvement beforehand. He believes the reformers' only mistake was not leaving the final decision on targets to politicians.

In New Zealand, the Expert Advisory Group calculates that 25 per cent of children live in poverty, which it defines as an income below 60 per cent of the national average. Its wants to reduce that proportion to 20 per cent by 2015 and to 15 per cent by 2022 - a 40 per cent reduction.

English has already ruled out the idea, telling the Weekend Herald this week that such a relative poverty measure made no sense as it did not show how rich or poor people were in absolute terms.

Former Act leader Rodney Hide has argued that under the report's definition a family with four children receiving $1000 a week net could be classed as poor, which was ridiculous.

Mindful of the likely criticism, the group looked for alternative targets, such as material deprivation, which measures the number of things children have to go without, such as a raincoat or a doctor's visit.

It found 13 per cent of New Zealanders could be defined as poor because they could not afford three of the items on the list. The age difference was stark - only 3 per cent of people over 65 fell into this category, compared to 18 per cent of children up to the age of 17.

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