23 Mar 2023

Child poverty reduction stalls ahead of cost-of-living crisis

5:30 pm on 23 March 2023
Labour MP and Deputy chair of the Education and Workforce Committee Jan Tinetti.

Child Poverty Reduction Minister Jan Tinetti. Photo: VNP / Phil Smith

The latest child poverty statistics show there was no statistically significant improvement in the year to June 2022.

The latest child poverty statistics show there was no statistically significant improvement in the year to June 2022, and campaigners fear the situation has only got worse since then.

Stats NZ on Thursday reported no little change between 2021 and 2022, though eight of the nine measures remained better than they were in 2018, when the data was first published.

Twelve percent of Kiwi children lived in households with less than 50 percent of the median disposable income before deducting housing costs - more than 100,000. After deducting the cost of housing, the figure was significantly worse - 15.4 percent.

About one in 10 - 10.3 percent - were living in material hardship - defined as lacking access to six or more of a list of 17 basic items, such as having good shoes, doctor's visits when required and meat for dinner.

"When a household is in material hardship, it can mean going without things like fresh fruit and veggies or avoiding using the heater in winter to save money," Stats NZ general manager social and population insights Sean Broughton said.

"These households are particularly vulnerable to unforeseen expenses, which they're unlikely to be able to pay without borrowing, be it from friends and whānau or from the bank."

While some of the numbers were marginally better than what was reported for the year earlier, there is more uncertainty in the data this year because its collection was interrupted by Covid-19 lockdowns in late 2021, and the Omicron wave in 2022. The sample size was just 8900 households, down from the usual 20,000.

While confident the figures are accurate for New Zealand as a whole, Stats NZ did not produce regional breakdowns, and warned there was "greater uncertainty on statistics for demographic groups than previous years".

That included Māori (14.5 percent) and Pasifika (19.5 percent) children being more likely than average to live in households with less than 50 percent of the median disposable income before deducting housing costs.

Nearly one-in-five Māori (18.8 percent) and more than one-in-four (25.6 percent) of Pasifika children are in households experiencing material hardship.

Overall, 3.9 percent of children were found to be living in severe material hardship - lacking nine or more of the 17 basic items (down from 5.7 percent in 2019). For Māori it was 7.8 percent (down from 11.1 percent) and Pasifika, 10.3 percent (down from 14.1 percent).

Not going backwards - yet

Child Poverty Reduction Minister Jan Tinetti said the figures showed the government's handling of Covid-19 and the "resulting economic shock" had "avoided more children falling into poverty", pointing to the Winter Energy Payments, benefit increases, fuel tax relief, free school lunches and the wage subsidy scheme.

"We've got 77,000 fewer children living in lower-income households on the after housing costs primary measure," she told RNZ's Midday Report. "But then that's different when we're talking about material hardship, so 28,700 fewer children experiencing material hardship since 2018."

When the statistics started being collected after Labour came to power in 2017, the government said its goal was to halve child poverty in a decade.

Tinetti said even one child living in poverty was "too many", however.

"We have to make sure that New Zealand is the best place to be for a child. It's something that I'm absolutely committed to. I've been committed to that my entire working career, and I'm not about to give up now."

The Children's Commissioner said while child poverty had dropped overall since 2019, improvements were not coming as quickly for Māori and Pasifika as other groups.

"I strongly believe the answers lie in agencies working more closely with whānau, hapū and iwi, community leaders, and NGOs," said Judge Frances Eivers.

"These groups are trusted by Māori and Pacific communities that simply do not trust government agencies, and as a result either don't reach out for help, or aren't comfortably sharing fully details of their true situation. Every community knows who needs assistance and how best to deliver that.

"We cannot and should not leave some children behind when we can work together to find solutions within their communities."

'Sad indictment'

The Child Poverty Action Group called the latest figures "a sad indictment on the country'".

"This is an appalling situation," health spokesperson Innes Asher said. "The future is bleak for these children who are languishing in poverty. The country's future is also blighted by this because we're not investing in children."

"How could there be any change in the rate of child poverty in New Zealand when there have been no policies implemented that could turn things around?" added housing spokesperson Alan Johnson.

CPAG urged the government to adopt all 42 recommendations made by the Welfare Expert Advisory Group in 2019, saying not a single one had yet been implemented in full.

The Green Party's' social development spokesperson Ricardo Menéndez March said progress on poverty was moving far too slowly, calling for further benefit hikes and expansions of the Working for Families and Best Start schemes.

"Right now, thousands of people are struggling. Rising inflation does not impact everyone equally, and those on the lowest incomes are being hit the hardest."

Social policy academic Michael O'Brien of the University of Auckland told RNZ's Midday Report the results were "not too surprising".

"They're disturbing, they're upsetting. We... had anticipated and hoped for a kind of improvement, so to have them stalled in this way is certainly very disappointing."

He was also concerned that since the data was collected, inflation has spiked to over 7 percent, sparking the cost-of-living crisis.

"This kind of reflects what we see, what's being reported so widely on the ground in terms of demands on social security agencies, things like food parcels and so on."

The ACT Party singled out welfare dependency for the lack of improvement, pinning the blame on the former prime minister.

"Jacinda Ardern's legacy will be more children growing up in welfare-dependent households with no significant reduction in child poverty," social development spokesperson Karen Chhour said.

"ACT has always said that passing a law and throwing more welfare at families wasn't the answer to child poverty. We were the only party to vote against the Child Poverty Reduction Bill.

"Today's child poverty data from Stats NZ shows it is plateauing and is set to get worse once the cost of living crisis is factored in."

The most recent figures from the Ministry of Social Development show the number of people receiving a benefit (including Jobseeker) has been trending downward since spiking in 2020 as the pandemic hit, but remains higher than it was in 2019.

Unemployment is at a near-record low, at 3.4 percent.

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