News

Budget Policy Statement Feb 2012

CPAG comments on the Governments Budegt Policy Statement (BPS) released this month, urging for a rethink of fiscal policy.  

CPAG agrees with the CTU that the tax switch policy has been an abject failure. The tax cuts have hugely increased income inequality, with higher GST impacting harshly on low income families.

The changes have been far from fiscally and distributionally neutral as was claimed by National.

BUDGET POLICY STATEMENT FEBRUARY 2012

Child Poverty Action Group calls for an urgent rethink of fiscal policy.

CPAG agrees with the CTU that the tax switch policy has been an abject failure. The tax cuts have hugely increased income inequality, with higher GST impacting harshly on low income families.

The changes have been far from fiscally and distributionally neutral as was claimed by National.

“Worse still, since 1996 successive governments have withheld a significant part of the child-based family assistance from very low income families that could help with the costs of their children” says CPAG spokesperson Susan St John

First the Child Tax Credit (from 1996) and then its replacement, the In Work Tax Credit (from 2006) have been denied to those on benefits. Since 1996 this discrimination has saved the government around 5 billion dollars.

Denying these child-based payments to those who needed them most helped to create the surpluses of the 2000s which in turn funded the tax cuts to the rich.  Christchurch has since raised new needs and the recession has deepened. Now the coffers are bare and there are deficits with calls for cuts to welfare and public services.  This is just not fair to our poorest children.

In the current environment many more families find they don’t qualify for the In Work Tax Credit worth at least $60 a week, while others find it far too difficult to access. 

“CPAG says the only fair fiscal policy is one that raises taxes on the top income earners and wealth holders and redistributes this money back to the families in poverty.”  This would be beneficial not only for children but also economic activity and help to support struggling low income neighborhoods.

Budget Policy Statement 2012: view here

 

SUPPORTING INFORMATION:

Left further behind: how policies fail the poorest children in New Zealand

A Child Poverty Action Group Monograph, available online click here

Edited by M. Claire Dale, Mike O’Brien and Susan St John, September 2011

 

Executive Summary

In 2008, Child Poverty Action Group produced Left Behind, which reflected the position of children in New Zealand. Three years later, the lack of substantial progress on so many issues facing children in this country leads us to rewrite and update that publication.  In this report we reflect what is required to ensure all children have the resources and opportunities to grow and to develop their potential. Recent years and recent policy approaches have focused heavily on supporting, and sometimes forcing, parents (especially lone parents) into paid work. The needs and interests of children require a much broader approach. And in the interests of both children and parents, the work of caring for children needs to be given adequate recognition and support. Children’s wellbeing must be central, whether parents are in paid work or not.

The core message of this publication is simple: ALL children, irrespective of the status and position of their parent/carer, are entitled to the best possible support from their parent/s and all New Zealand society. Together, we share the responsibility of ensuring that children are given that support. While charity can make a useful contribution to assist and support children and families experiencing particular stresses, it cannot solve the problem of poverty, and poverty is the major problem facing around 200,000 New Zealand children. That solution requires collective action from families and communities; and it requires a commitment from the Government to make investing in our children the highest priority.

This publication traverses a wide range of issues affecting our children, including: incomes, health, housing, education, parental support, social hazards, and the lack of job opportunities for young people; and is built around the idea of putting children at the centre of policy decisions. None of the issues can be tackled in isolation. A concerted and coordinated approach to reducing child poverty and improving the wellbeing and opportunities for all children is required. Without such an approach, children will suffer unnecessarily and New Zealand will be poorer economically, culturally and socially.

While each chapter addresses specific issues and recommendations for change (collected as a Summary at the end of this publication), seven key recommendations emerge:

  • Monitor all major indicators of child poverty and report these on a regular basis with specific target reductions to be met on the way to ending child poverty by 2020; and fund child-impact assessments of existing and future national and local policies;
  • Create a senior Cabinet position with responsibility for children, such as a Minister for Children, to support the move toward a child-centred approach to policy and legislation;
  • Remove work-based rules for child financial assistance and pay the equivalent of the In-Work Tax Credit to all low income families. Simplify the administration of tax credits;
  • Acknowledge the vital social and economic contribution made by good parenting: ensure that affordable, appropriate childcare and early childhood education, including kohanga reo and playcentres, is available for all children;  and ensure that training allowances support sole parents’ education where appropriate;
  • Provide free access 24 hours a day, 7 days a week to healthcare for all children under 6;
  • The Government develops and funds a national housing plan to address the emerging housing shortages identified by the Department of Building. In the meantime, ensure that housing is affordable and appropriate (e.g. address overcrowding, dampness, cold);
  • Provide adequate funding for low decile schools to ensure that all children have access to high quality education.

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