PM Jacinda Ardern sets 'ambitious' short-term child poverty goals

Prime Minister Jacinda Ardern said setting the targets had highlighted problems in the way poverty was measured. Photo / Mark Mitchell

Prime Minister Jacinda Ardern has released short-term goals to reduce the numbers of children living in poverty by 70,000 over three years – but says changes being made to the way child poverty is measured is likely to see numbers increase before they go down.

Ardern released the Government's three-year targets for reducing child poverty, including a goal to reduce the number of children in material hardship by about 30,000 and to reduce those living in low-income households (less than half the median income) by 6 per cent – about 70,000 children.

Ardern said the long-term 10-year goal of more than halving child poverty was ambitious and if achieved would make New Zealand among the lowest in world.

The new three-year targets were more than what was required to hit the 10-year target.

"So yes, I would classify this as ambitious."

However, she said setting the targets had highlighted problems in the way poverty was measured.

Poverty measures were based on the Household Incomes Survey but Ardern said she was advised those numbers were not accurate because the sample sizes were too small and underestimated the numbers of sole parents.

That meant the data Treasury used to estimate the impact of policies was "a bit ropy".

"So my current guesstimate is poverty numbers will get worse before they get better because we are going to do a larger sample size next time round."

Ardern said much of the first three-year goal would be achieved through Labour's Families Package which kicks in on July 1. That includes increases to Working for Families, the Accommodation Supplement and measures such as a $60 a week payment for newborn babies and subsidies for winter heating for superannuitants and beneficiaries.

That is expected to benefit 384,000 families – and Treasury has calculated it will lift 64,000 children out of poverty.

"That is the centrepiece, it is $5.5 billion worth of investment in low and middle-income families. People won't be surprised that is the centrepiece, it's one of the largest pieces of reform we've seen in probably a decade in that area and a big boost."

However, she said non-income factors included the cost of healthcare, housing, the cost of food and other household costs.

In January, Ardern set the 10-year targets of more than halving child poverty but had held off on the shorter term 3-year goals until Treasury re-assessed the impact of the Families Package.

Treasury had earlier overstated the figures for which it blamed a coding error but issued its new calculations two weeks ago.

The three-year targets are:

• 70,000 fewer children living in low-income households before housing costs are included (a 6 per cent drop)

• 40,000 fewer children in low-income households after housing costs are included (a 4 per cent drop)

• 30,000 fewer children living in material hardship (without basics, healthy food etc) (a 3 per cent drop)

Low-income households are those on less than half the median income.