Finance Minister Bill English has hit out against the figures used by anti-poverty campaigners to measure child poverty, as he defends his Budget announcement to increase benefits.

However, Victoria University Professor Jonathan Boston refuted the minister's claims, saying Mr English "doesn't understand how poverty measures are calculated".

Bill English, finance minister, answers questions about the 2015 budget.

Mr English said during an interview with TVNZ's Q+A programme this morning that anti-poverty campaigners like Prof Boston and the Children's Commissioner used an unrealistic set of measures to quantify poverty in New Zealand.

"I mean, the measures that those groups use - if everyone's income was doubled overnight, we'd still have the same poverty today as we did yesterday, because they're using relative measures," he said.


"We are focusing not on some theoretically perfect world but on the reality of the lowest income families, with relatively limited resources.

"We have targeted those lowest-income families, and while the poverty experts may think it makes no difference to those families, where the margins are $5 or $10 difference between success and failure, $25 a week is going to help them."

Prof Boston said it was clear from his comments that Mr English didn't understand the measures.

"The way poverty is measured using income is by calculating the household disposable income of people and then taking the mid-point or the median in a distribution of those household incomes, and then setting a poverty threshold at some point in reference to the mid-point.

"That might be 50 per cent of median household disposable incomes, and theoretically you could raise everyone's incomes, which are below 50 per cent, up to that median, and in so doing they would no longer be in poverty," he said.

"Raising their incomes would not change the mid-point - it would simply lift those who are below that point up to that point. Therefore those who think by doubling people's income, we would still have poverty, I think they are missing the mathematics of this."
Prof Boston said despite the benefit increase being modest, it would make a big difference to some low-income families.

"I am very pleased that the Government has finally adjusted benefits after almost half a century of no movement, so this increase is welcome, but we need to recognise that it is modest and it is a one-off," he said.

Mr English this morning denied the $25-a-week benefit increase figure was misleading, saying it had to be looked at "family by family".


"So we're not asserting that every family will get exactly $25, but the benefit rate will go up by $25 after tax, and then for each individual family, circumstances will be taken into account," he told Q+A.

He said it was "possible" more money would go towards poverty in the future.

"But we've still got to implement this first step and we still want to persist with our social investment approach, because while we know that the path out of dependency is to get a job, there's a lot of people in these households who at the moment aren't able or capable of getting a job without considerably more support and without action that breaks the cycle of violence, criminal convictions, alcohol addiction, low income, no education.

"That's what keeps people really locked into low incomes forever."