News

Fiscal responsibility requires more focus on children

Child Poverty Action Group (CPAG) says that to be fiscally responsible, an incoming Government needs to stop looking at ways to reduce debt and think about ways to reduce spending on the ambulance at the bottom of the hill, specifically by committing to real investment in the lives of ALL children, who are our nation’s most vulnerable citizens.

CPAG agrees that Labour-Green should be prudent and transparent, but is wary of the concentration on “being careful” and “reducing debt”.

“Significant additional spending on public services and welfare is required to ensure that the needs of all our children are met according to our commitment to The United Nations Convention on the Rights of the Child (UNCROC),” says Associate Professor Mike O’Brien, CPAG social security spokesperson.

It is heartening to hear the parties promise that, “we will not artificially generate surpluses by underfunding key public services”.  If spending is to be in truth ‘responsible’, there needs to be a turnaround for public services and the welfare system, which have been the target of  budget cuts in recent years. These funding cuts have bankrolled emerging budget surpluses and the result is a compromised quality of life for many children in New Zealand.

Restoring these cuts should be the foremost budget priority:

  • Covert, automatic cuts to Working for Families (WFF) rolled out since 2010 have saved the Government a cumulative sum of over $2 billion (see chart);

  • Discrimination against  low-income families in WFF has saved a cumulative $4-5 billion.

  • The Accommodation Supplement has not had a proper review in years, thus subjecting it to similar erosion, while housing prices escalate for families;

  • Understaffed emergency healthcare providers continue to see a rate of preventable illness among children that is almost unheard of in the OECD outside of New Zealand;

  • Funding cuts to ECCE in 2010 have resulted in compromising the quality of care for under-fives and increasing the cost for parents.  

    CPAG supports the NZCTU statement that if an incoming Labour-Green Government  is ”going to really tackle income inequality and our environmental challenges together as a nation, then it will need to be prepared to invest significantly.”

    A target of reducing net debt to 20% of GDP by 2020 is unnecessary. Netting off the NZ Super Fund assets will reduce New Zealand’s net debt closer to 8% by 2020 - a very low level and a much healthier and more honest way of looking at net debt. A continued focus on prioritising debt reduction will inhibit the boldness Government needs to tackle poverty and inequality.