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Child Poverty Reduction Policy 02 February 2018 (Edition 2/2018)

Child Poverty Reduction Policy 02 February 2018 (Edition 2/2018)

This week the Minister for Child Poverty Reduction / Prime Minister, Jacinda Ardern, introduced the Child Poverty Reduction Bill to Parliament. This policy area is of major significance to Māori, as our research to date indicates up to 33% of Māori children – circa 130,000 tamariki Māori live in poorer households / poverty.  (See technical note below.)

The Bill is centred on ensuring that the present and future Governments maintain appropriate measures of levels of child poverty, and set targets to reduce such poverty. (I.e. it is about regulatory direction to Government, not establishing programmes or services.)   If the Bill is passed into law it will establish four primary and six supplementary measures of poverty and material hardship (noting that the previous Government had rejected expert advice calling on the use of such measures.)  Future Governments will then be required to set both ten year and three year targets against these measures, and publish their results.  Further, Governments will also be required to report on their strategies to promote overall wellbeing of children.

  • Following the introduction of the Bill, the following day in her 100 days speech Prime Minister Ardern indicated that some of her Government’s ten year targets would be:
  • Reduce the rate of children living in poverty (before housing costs are considered) from 15% to 5%;
  • Halve the percentage of children living in poverty (after housing costs are considered) from 20% to 10%;
  • Halve the percentage of children living in material hardship from up to 15% now to 7%.

Our initial assessment is that a focus on reducing child poverty – using any measure – will be good for Māori whānau, given circa one-third live in poverty/hardship. However, we advise that this disproportionally high percentage of Māori children in these circumstances is directly correlated with the high proportion (and number) of Māori sole parents who are welfare reliant.  This means tax-credits and greater support for working families etc. will be insufficient to dramatically change Māori child poverty levels (as it is disassociation with the workforce that is a central issue).  Accordingly, how the Government’s Families Package may impact on these children – in welfare reliant households – will be key for many Māori whānau.  The Treasury is currently reforecasting these projections, and we will advise further once that work is completed.

 Tamariki Māori – Our Poverty Estimate

Technical Note: in the debates around child poverty measures, different groups use different measures – which is partially why the Government is resolving this with the introduction of multiple measures in its Bill.  For example, prior to the last election the National Party used a count of children living in households that receive less than 50% of the median amount of household disposable income, before housing costs (rent/bank loans, etc.) were considered.  However, the Labour Party used a count with two variables changed – firstly those children in households with less than 60% of the median amount of household disposable income, and second, after housing costs (rents, etc.) are accounted for. 

In previous Pānui we have considered and advised on the various child poverty measures, and have used the mid-range figure presented in Government research, namely;

those children in households with less than 50% of the medium household income, after housing costs have been deducted. 

This presents as suitable in the New Zealand context given housing pressures, and is effectively the middle ground between the views of the two political parties.  It is also the method that appears most prominent in Ministry of Social Development research on this topic.  Using this method we advise that there are 230,000 children living in poorer households, and we estimate 130,000 are tamariki Māori, based on household ethnic group data.  Pānui 33/2016 provides details.

We advise The Treasury is now recalculating how many children will be ‘lifted out of poverty’/impacted on using all measures, once the Government’s Family Package is in place.  This is because they got this calculation wrong last year in the lead up to the election, by failing to properly account for the Accommodation Supplement that some families receive.  Once their recalculations are done we expect to be able to provide advice on possible numbers of Māori tamariki impacted on by the incoming policy change.

 

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