Child poverty: the too-hard basket

“New Zealand has chosen to tolerate significant child deprivation. We could choose otherwise,” says Jonathon Boston, academic and co chair of the Expert Advisory Group on child poverty set up…

“New Zealand has chosen to tolerate significant child deprivation. We could choose otherwise,” says Jonathon Boston, academic and co chair of the Expert Advisory Group on child poverty set up by the Children’s Commissioner. The EAG’s initial options paper certainly brought the issues to public attention” with its call for a universal child allowance” and its final report, released before Christmas also hit the headlines. The EAG comprised health experts, economists, policy advisors and business lobbyists as well as academics. It’s become part of a growing wave of opinion that something must be done to address New Zealand’s dismal record on child poverty and its long-term effects.

The EAG’s most controversial finding, the call for a child allowance for children under six, was informed by the research of a world expert on childhood poverty, the Distinguished Professor Greg Duncan, who was in New Zealand last year to talk about the causes and effects of child poverty. A random controlled trial he was involved in in the US gave money to some families, and not to others. It found that an extra $US1,000 per year of family income during the pre-school years had a significant effect on children’s achievement.


But Prime Minister John Key was quick to dismiss the idea of a universal child allowance as “dopey”. He prefers the targeted system known as “Working for Families”” a range of measures introduced under Labour that favours lower and middle income working parents. However, the highly targeted Working for Families package has its critics: not everyone gets their entitlements and it is costly and cumbersome to administer.
The advantages of a universal child payment are revealed by the statistics relating to the elderly. With a universal pension, albeit a modest one, only 3 percent of New Zealand’s elderly live in poverty, compared to 25 percent of children, if the same poverty measure is used


Economist Gareth Morgan says a universal payment would help parents “find a balance between paid work and caring for their kids in the most vulnerable years”, in a more effective way than targeted payments to working parents. “What Key doesn’t seem to grasp, but the experts panel did, is that targeted assistance is part of the poverty problem.” As it is, Working for Families discriminates against the vast majority of children in poverty” those in households dependent on benefits.
With Working for Families, a “top-up” payment goes to families where a parent works 20 hours a week or more. For a family with two children, it can be as much as $217 a week on top of a low wage. But it also goes to families on higher incomes” up to $100,000 in some cases. If the idea of the package is income re-distribution to where it’s most needed, it doesn’t work.

Legal challenge

Those working with struggling families see changing the rules for the in-work tax credit (part of Working for Families) as an easy way of delivering money to those worst off. The Child Poverty Action Group has been challenging this policy in court. They have many supporters, including the Human Rights Commission which argues that children should not be discriminated against because their parents are out of work.
Child Poverty Action Group (CPAG) lost its case, but is currently fundraising for an appeal, expected to be heard early this year. Recently, a private members bill that would have had the same effect lost in Parliament by only one vote. United Future MP Peter Dunne who voted against the measure, but who is on record as wanting to reduce inequality, voted against the bill despite being lobbied hard by children’s advocates.
Like others, he supports the idea of making work more attractive, and making sure going to work pays. CPAG also accepts this idea but says, “Income directed at children’s needs should not be cut for this purpose.”

Low wages

A sociologist at Otago University, Emily Keddell, says the cause of child poverty is simple –  a lack of money. “It matters not whether the money is delivered through wages, benefits, tax credits, or universal child allowances” it is the money that makes the difference.” But she says, at the moment, relatively low wages, a tight job market and a lack of free quality childcare means that employment is not an easy option for many beneficiaries raising children, and the government needs to do something more.


Business NZ also says the government needs to invest more in its children. Its head, Phil O’Reilly, was also on the child poverty experts group. The current government sees employment as the best way to alleviate child poverty, and not surprisingly, Phil O’Reilly sees it as an important part of the mix. He told EA, “Investment in training and support is vital to give people the skills they need to get into work, and to encourage employers to take on people who might need extra support in the workplace.”
He says training in literacy, numeracy, information technology and teamwork will benefit single parents whether or not it leads to a job   improving their skills and confidence and making community connections.
Employers are keen to help, he says, and he accepts that single parents face barriers to employment. But he is adamant that no more regulation is necessary to improve entitlements for workers. He dismisses suggestions that the hours of work associated with unskilled work can be incompatible with quality parenting by sole parents, and while he recognizes that sick leave provisions are often inadequate for single parents, he doesn’t favour any increase in the statutory minimum of five days a year after six months of being in a job.

Working parents

But employment is no guarantee of avoiding poverty for children. A background paper for the experts panel points out that Work and Income has not focused on moving children out of poverty, just on getting people off benefits.  The paper says that Work and Income has traditionally not considered whether the parents’ employment is suitable and beneficial for the children affected by the transition to work.
Unions, including NZEI, consistently argue for an increase in the minimum wage, so that work does pay. The current campaign for a living wage, spearheaded by the Service and Foodworkers Union, and supported by other unions and many churches and community and advocacy organisations, is part of that.


[g1_quote author_name=”Mike O’Brien” author_description=”Child Poverty Action spokesperson” author_description_format=”%link%” source_name=”Child Poverty Action Group” source_url=”” align=”none” size=”m” style=”solid” template=”01″]

No child in New Zealand should be hungry, cold or ill due to a preventable disease. “Child poverty is not a party political issue, it is a moral and ethical issue. Our politicians need to know that New Zealanders do want to invest in children and their future


While the universal child benefit got the most publicity from the Child Poverty Experts’ recommendations, there were many others, perhaps the most important being improvements to housing.  Health professionals report that illnesses related to cold, damp and overcrowded homes, such as rheumatic fever, long gone in most developed countries, are widespread in New Zealand.  Child Poverty Action spokesperson Mike O’Brien says we can eradicate child poverty if we want to. “No child in New Zealand should be hungry, cold or ill due to a preventable disease.  “Child poverty is not a party political issue, it is a moral and ethical issue. Our politicians need to know that New Zealanders do want to invest in children and their future.”


Russell Wills, the Children’s Commissioner, spoke at NZEI’s Annual Meeting on “Solutions to Child Poverty”. His speech and slides are at His final report is at NZEI’s submission on the earlier paper is on the EA website.

Key points

  • Some 270,000 New Zealand children live in poverty.
  • For children under five, living in poverty seriously affects their long-term life chances, even if things improve later.
  • About 85 percent of children living in poverty are in families dependent on benefits.
  • The government says parents being in work is the way out of poverty for children. But low wages, a lack of free quality childcare, and unemployment often make this impractical.
  • The Children’s Commissioner has made practical recommendations.

The Children’s Commissioner recommends

  • To address the effects of child poverty, New Zealand needs to:
  • Improve immunisation rates
  • Insulate and heat HCNZ houses
  • Increase Māori and Pacifika participation in ECE
  • Decrease serious child assaults
  • Reform the In Work Tax Credit scheme
  • Make a universal child payment for under six-year-olds
  • Increase social housing
  • Develop a Warrant of Fitness for rental housing
  • Increase access to ante-natal care
  • Schools to act as community hubs
  • Food in schools
  • Family-friendly workplaces
  • Joint ECEC and after-school care provision