Ardern’s efforts too little, too late for poor families

Monday, May 21st, 2018

Jacinda Ardern came into politics to reduce child poverty, but her ‘families package’ will not bring help soon enough to the children who need it.

About one in eight, or 12%, of New Zealand’s children are in poverty, a problem that has been festering for 30 years.

As housing costs have soared, lack of affordable housing for low income families has been a key driver of poverty.

A “work first” ideology has kept benefits painfully low, and stopped the worst-off families on benefits accessing full tax credits for their children as a carrot to get into work.

But New Zealand now has a prime minister who came into politics expressly to reduce child poverty.

She made herself the minister of child poverty reduction and has a bill in the house to spell out a suite of measures to hold the government of the day accountable.

Thursday’s budget was an enthusiastic endorsement of the vision but it failed.
Susan St John, Child Poverty Action Group

Her coalition government has set a target of halving child poverty within 10 years, and aims to reduce the proportion of children in low-income households by six percentage points – or 70,000 children – by 2020/21.

Thursday’s budget was an enthusiastic endorsement of the vision but it failed to earmark the investment required to ensure the worst-off children and families get the help they urgently need.

Labour is relying on a “families package” of targeted family payment increases and top-ups, such as accommodation supplements, and new payments for newborns announced well before the budget.

A lot of this spending was a catch-up for the past nine years of loss of real value in family assistance, and does not take effect until July.

The large-scale state house-building programme announced, and other housing investments will eventually make a real difference to our most vulnerable families.

Specifically, the budget included: NZ$3.8bn to build 6,400 more state houses by 2022; $170m for emergency housing; and insulation subsidies for low-income families.

But much more is needed, much sooner.

Our analysis shows the families package itself is simply not enough for very low-income families, and is coming in far too late.

These families waste precious time at welfare offices arguing for top-ups; and queuing at foodbanks (which report alarming increases in demand).

When they try to earn, they end up very little better off due to steep clawbacks on benefits, and many struggle with mounting debt, with inadequate safeguards against predatory loan sharks. Continue reading

Sources

Susan St John is an associate professor in the economics department of the University of Auckland and a founding member of Child Poverty Action Group.
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