Budget’s child hardship package will cost NZ

Budget's child hardship package will cost NZ.

Regardless of who you voted for, you’re likely to be worried about child poverty in New Zealand.

The centrepiece of today’s budget was the Child Hardship Package – a package that appears to give to low-income families with one hand, while taking with the other.

110,000 families will receive benefit increases of up to $25 a week. Additionally, childcare subsidies for eligible families will rise from $4 to $5 an hour for up to 50 hours a week.

But sole parents who are currently expected to return to work when their youngest child turns five will now have to find work when their youngest child turns three – and they will have to work 20 rather than the current 15 hours a week.

At last weekend’s Auckland Writers Festival event Shameful Poverty, Child Poverty in New Zealand co-author Jonathan Boston addressed a full house. He opened with the Nelson Mandela quote, “There can be no keener revelation of a society’s soul than the way in which it treats its children.”

Jonathan said that twenty four per cent of New Zealand children lived in poverty last year – a quarter of our kiwi kids. Six times as many of our children live in poverty than our elderly (those aged 65 and over), and Jonathan argued that this is not accidental – it reflects the policy choices we’ve made as a society.

The state pension is fully indexed to the median wage but social assistance is not, so low income families have become poor relative to average living standards. Unemployment, sole parenthood and housing costs have risen as benefits have shrunk in real terms since the 1990s. Given the social problems that come with poverty, “the net outcome of benefit cuts is likely to be in the negative – but no one has done that detailed analysis,” Jonathan said.

Poverty in New Zealand is about lacking the goods and services that most people regard as essential – shoes, a winter jacket, a bed of your own or a daily school lunch.

Poverty matters because it costs us in so many ways. It leads to lower educational achievement, ill health and shorter life-spans. It causes stress and anxiety in parents, which in turn contributes to increased rates of mental illness and separation. All of this creates costly ripple effects through society.

Jonathan argued that we need a different mind-set, philosophy and moral vision. He would like us to commit to having child poverty rates comparable to those for elderly by 2025. He would like us to increase the stock of social housing, improve the quality of rental housing and have benefits indexed to wages.

“Reducing poverty is a sound social investment. It will lead to a fairer, more cohesive society and a stronger economy with long-term fiscal returns,” he said. “We need to look at this through an investment lens. Poverty lowers everyone’s quality of life. We need to build human capital so that society as a whole is better off. We need a bold vision and an evidence-based policy package – our long-term future depends on it.”

Today’s budget may be a soothing balm to our collective guilty conscience, but it seems far from a bold vision. An additional $25 per family per week is unlikely to be the sustainable, cost-saving transformation we need to drastically improve living standards for our most vulnerable citizens. It doesn’t reflect our egalitarian history, and it doesn’t bode well for our future.  

If you don’t believe the budget has gone far enough to support kiwi kids in poverty, there are practical steps you can take. Find out how you can get involved by checking out the Child Poverty Action Group or KidsCan.

If you have other ideas for ways in which people can help kids in poverty, please share them in the comments.