Children and the elderly are the most likely to suffer during times of economic hardship, because they are society's most vulnerable people.

That's the view of Tracy Lynn from Age Concern and Tim Metcalfe from Jigsaw Whanganui, who were speaking after the release of the Salvation Army's annual "state of the nation" report last week.

Now in its ninth year, the report examines a range of indicators to highlight good and bad aspects of the national's social and economic conditions.

Mr Metcalfe described the report as "excellent". He said it highlighted the increasing inequality in New Zealand, and the impact that has on children.


"It makes very sobering reading," he said.

Mr Metcalfe said the Government had included in its public service targets a decrease in children living in families on long-term benefits.

"But what's happening is that there's the same number living in poverty - and we're seeing more children living in poverty whose parents are working.

"Working conditions are quite difficult for many people."

Mr Metcalfe said he believed inequality and poverty were the two biggest long-term issues facing New Zealand.

He said poverty often presented in a child's life "in complex ways".

"They often live very chaotic lives, and this impacts on their health, their behaviour, their education."

He said the Salvation Army's report highlighted the difficulties many families face in paying for quality housing.

"It used to be that housing costs took up one-third of incomes; now it's well over half."

Ms Lynn said she thought the report covered the issues affecting older people only lightly:

"I managed to find a couple of pages pertaining to older people, however, I don't believe it covered issues of the well-being of older people in particular detail."

She said one of the difficulties facing older people was the lack of ability to grow their income: "This is particularly so if they have been victims of financial mismanagement - not necessarily of their own making - or abuse."

Ms Lynn said: "What needs to be highlighted is that for people on fixed incomes the incidence of bits and pieces wearing out ... means that many people requiring optical, dental and hearing therapies don't or can't afford what many people take for granted. The result often is that they become isolated, and their health is impacted, thus creating vulnerable older people open to abuse or loneliness."