Latest Official Child Poverty Statistics: 2022/23 Reported Feb 2024

Latest official child poverty measures: 2022/23 (February 2024) 

Every year, StatsNZ reports on nine measures of child poverty as per the Child Poverty Reduction Act 2018. CPAG’s immediate response to this year’s StatsNZ data is that rates on two of the primary measures going up for the first time is a stark warning for New Zealand that progress made in recent years is now going backwards.

Child Poverty Statistics - Material Hardship Measures

Material hardship is defined as scoring six or more on the DEP-17 questionnaire. Using non-income measures provides a direct measure of the actual day-to-day living conditions of households – the basics of food, clothing, accommodation, heating, and transport, and their ability to afford other items that most people would regard as essential.

Material hardship (Primary Measure #3)

Approximately 143,700 children experienced material hardship in the 2022/23 financial year. Material hardship is defined as scoring six or more on the DEP-17 questionnaire.[1] That is about 1 in every 8 children, or 12.5% of the total number of children in New Zealand (1,115,800). Since the 2021/22 survey, this was an increase of 23,400 more children or a 2-percentage point increase. This annual increase is statistically significant.

Here is the rate of material hardship by each ethnic group, ranked from the most to the least intense:

1.        Pasifika –to 1 in every 3.5 children

2.        Māori – 1 in every 4.5 children

3.        MELAA[2] – 1 in every 7 children

4.        Other[3] – 1 in every 8 children

5.        European –1 in every 10 children

6.        Asian – 1 in every 27 children

[1] The Deprivation-17 (DEP-17) questionnaire comprises 17 questions across categories of lack of essentials, economising behaviours, restrictions, and financial stress and vulnerability. A score of 6 to 8 indicates material hardship, and going above a score of 9 or more would put a household under severe material hardship.

[2] MELAA stands for the ethnic collective of Middle Eastern/Latin American/African.

[3] “Other ethnicity” includes Indigenous American, Mauritan, Seychellois, Other South African, New Zealander, and other ethnic identities such as African Coloured, Coloured, others (StatsNZ, 2024).

Severe Material Hardship (Supplement Measure #8/I)

Approximately 63,600 children experienced severe material hardship in the 2022/23 financial year. That is 1 in every 18 children, or 5.5% of New Zealand children. Severe material hardship is scoring nine or more on the DEP-17 questionnaire. Compared to the previous year, there was an increase of 1.5 percentage points or about 17,600 more children in severe material hardship.

Here is the rate of material hardship across major ethnic groups, ranked from the most to the least intense:

1.        Pasifika – 1 in every 7 children

2.        Māori – 1 in every 10 children

3.  MELAA – 1 in every 12 children

4.     European –1 in every 29 children

5.        Asian – 1 in over 100 children

Child Poverty Statistics - Income Measures

Before Housing Costs 50 (Primary Measure #1)

Currently, approximately 146,000 children live in low-income households demarcated by the Before Housing Costs BHC 50 moving line. This is defined as less than the 50% equivalised disposable income before housing costs.

That is about 1 in every 8 children or 12.6% of the total number of children in New Zealand (1,115,800). Since the 2021/22 survey, this was an increase of 11,700 more children or a 1.9 percentage point increase.

BHC50 poverty rates for each major ethnic group are as follows, ranked from highest to lowest:

1.        MELAA – 1 in every 4.5 children

2.        Pasifika –1 in every 6 children

3.        Asian, Māori and Other –1 in every 7 children for each ethnic group

4.        European – close to 1 in every 11 children

After Housing Cost 50 Fixed-Line (Primary Measure #2)

Approximately 202,100 children lived in low-income households demarcated by the AHC 50 fixed poverty line. That is about 1 in every 6 children, or 17.5% of the total number of children in New Zealand (1,115,800). Since the 2021/22 survey, this was an increase of 35,900 more children or a 3-percentage point increase. This annual increase is statistically significant.

The child poverty rate by AHC 50 fixed line for each major ethnic group is as follows, ranked from highest to lowest:

1.        MELAA – 1 in every 3 children

2.        Asian – 1 in every 4.5 children

3.        Māori – 1 in every 5 children

4.        Pasifika – 1 in every 6 children

5.        Other – 1 in every 6.5 children

6.        European –1 in every 7 children

After Housing Cost - Moving Lines 60/50/40 (Supplement Measures 5 -7)

The total count of ethnic children population under the AHC60 poverty line is 434,600 due to multiple counts of individuals identifying with more than one ethnicity. Of these 434,600 children, 187,100 are Europeans and account for 43% of this cohort, making Europeans the largest ethnic group under AHC60. About 42% of children live in severe income poverty, defined by AHC40, amounting to 183,500 children. This makes AHC40 the largest cohort amongst the three brackets of the poverty measure, with 134,300 (31%) children in the AHC60 bracket and 116,800 (27%) children in the AHC50 moving line bracket.

The ethnic composition of the AHC40 cohort is as follows:

1)    European 42.1%

2)    Asian 22%

3)    Māori 20.6%

4)    Pasifika 10.1%

5)    MELAA 4.4%

6)    Other 0.8%

After Housing Cost 60 - Moving Line (Supplement Measure #5)

Approximately 340,000 children lived in low-income households demarcated by the AHC 60 moving line. That is about 1 in every 3.5 children or 29.4% of the total number of children in New Zealand (1,115,800). Since the 2021/22 survey, this was an increase of 20,800 more children or a 1.7 percentage point increase.

Here is the rate of child poverty by AHC60 across major ethnic groups, ranked from the highest to the lowest:

1.      MELAA –1 in every 2 children

2.      Asian, Pasifika, and Māori – 1 in every 3 children

3.      European – 1 in every 4 children

4.      Other – almost 1 in every 4.5 children

After Housing Cost 50 - Moving Line (Supplement Measure #6)

Of the 340,000 children, approximately 237,400 children living in low-income households were demarcated by the AHC 50 moving line. That is about 1 in every 5 or 20.5% of New Zealand children. Since the 2021/22 survey, this was an increase of 19,900 more children or a 1.6 percentage point increase.

Here is the rate of child poverty by AHC50 moving line across major ethnic groups, ranked from the highest to the lowest:

1.      MELAA –1 in every 2.5 children

2.      Asian – 1 in every 4 children

3.      Māori – over 1 in every 4 children

4.      Pasifika & Other –1 in every 5 children

5.      European –about 1 in every 6 children

After Housing Cost 40 - Moving Line (Supplement Measure #7)

Approximately 150,400 children out of the 340,000 lived in households with severe income poverty, as defined by the AHC 40 moving line measure. That is almost 1 in every 7.5 or 13% of New Zealand children. Since the previous survey, this was an increase of 14,900 children or a 1.2 percentage point increase.

Here is the rate of child poverty by AHC40 of each major ethnic group, ranked from the highest to the lowest:

1.      MELAA – 1 in every 4 children

2.      Asian – 1 in every 5.5 children

3.      Māori – 1 in every 8 children

4.    Pasifika & Other – 1 in every 9 children for each ethnic group

5. European –about 1 in every 9.5 children

Income Poverty by AHC60 and Material Hardship (Measure #9)

Approximately 77,200 children lived in households classified as low-income under AHC60 and experiencing material hardship. That is about 1 in every 15 children, or 6.7% of the total children in New Zealand (1,115,800). Since the 2021/22 survey, this was an increase of 10,300 more children or a 0.9 percentage point increase.

Here is the rate of children experiencing income and material hardship simultaneously by major ethnic groups, ranked from the highest to lowest percentage:

1.      Pasifika – 1 in every 6.5 children

2.      Māori – 1 in every 8 children

3.      MELAA – 1 in every 10 children

4.      Other - 1 in every 15 children

5.    European –1 in every 20 children

6.    Asian – 1 in every 59 children

Disability

Two relevant trends are found within disabled children’s datasets.

1)    Through the three moving AHC measures (#5 – 7 ), we can see that the gaps in AHC60 are closing in on each other while the gaps have been closed in AHC50. In the most severe poverty measurement, AHC40, the once-closed gap in 2022 is now diverging from each other, but with the percentage of non-disabled children overtaking disabled children. These developments suggest that the percentage of non-disabled children has outgrown their disabled counterparts.

2)    The two material hardship datasets portray an alternative story. The percentage of non-disabled children has reached a historical peak at 100,700 children, about 1 in every 9 children or 11.1%. At the same time, the percentage of disabled children in severe material hardship bounced back to its historical peak after a dip in 2022 and is now matching the rate of non-disabled children in material hardship at 11.1% or 1 in every 9 children.

Meeting 2023/24 targets and beyond

The Child Poverty Reduction Act 2018 mandated two sets of 3-year targets and a long-term 10-year target to be met by 2027/28. These targets comprise three primary measures: BHC50, AHC50 fixed line, and material hardship, outlined below.

 So, how is our progress towards these three targets of child poverty reduction in 2023/24?

Beyond the first year after the Child Poverty Reduction Act, the pace of child poverty reduction has been slow for all three primary measures, especially amidst the COVID-19 pandemic. For the first time since the 2018 Act, the 2022/23 data displayed growth of child poverty across all three primary measures. This is concerning, given that substantial progress has been made towards legislated targets in previous years. We had met our AHC50-fixed line target in 2020/2021, narrowly missed the material hardship target in the same year and with some more effort needed on the BHC 50 target.

A bounce back of the poverty rate and tracking for growth in the previous year suggest that meeting our 2023/24 targets would be challenging, and substantial focus would be warranted if the Government were to change the trajectory of the child poverty rate towards reduction. As shown in the table below, the reduction in three measures averaged between 0.15% to 1% per year since the 2018 Child Poverty Reduction Act.

Author’s Reflections

1)    The relationship between after-housing cost moving lines and material hardship is a peculiar emerging trend. Data from Pasifika and Asian ethnic groups highlight this concern more vividly below. As these graphs and previous tables demonstrate, income poverty has been reduced substantially for Pasifika children between 2021/22 and 2022/23, particularly a significant reduction in the number of children under the AHC40 measure. There is also a slight reduction in Pasifika children falling under the AHC50 moving measure, while there is a slight increase in those falling under the AHC60 measure. This would suggest that, in general, the household income of Pasifika children has increased in the past year, and a substantial number of them have exited from the most severe poverty. However, the two measures of material hardship suggest otherwise. Both measures have grown substantially in the past year for Pasifika children, with an increase of 3 percentage points for material hardship and 4.2 percentage points for severe material hardship.

On the other hand, there is a reverse trend in the Asian child poverty data, as shown in the graph below. Income poverty by all three measures has grown in the past year with concerning growth in the number of Asian children falling under the AHC 50 and 40 poverty lines. Despite the data suggesting that more Asian children are living in households with income poverty, the rate of material hardship has stagnated. In contrast, severe material hardship has continued to decrease in the past two years.

These two trends, in tandem, invite questions about how a better understanding of the relationship between income and material deprivation can improve child poverty reduction measures. The Pasifika ethnic data, despite setbacks in data collection and sampling, unravel some of the complexity of poverty reduction – why are more Pasifika children experiencing material hardship while their disposable household income is trending upwards? The same question could be raised for the data on Asian ethnic groups as more Asian children are falling under the most severe poverty threshold; many saw a general improvement in their material well-being.

These questions also relate to StatsNZ’s struggle with extremely low-income households experiencing great material well-being. As indicated in the technical appendix accompanying the release of 2022/23 child poverty statistics, StatsNZ has decided to exclude very low-income households who sometimes reported negative income but simultaneously reported a higher-than-expected material standard of living.

2) Mirroring concerns previously raised by CPAG (St John, 2022), which of these poverty measures stands for a livelihood that is deemed unacceptable? In other words, what degree of financial hardship are people willing to disregard? Welfare Expert Advisory Group’s (2018) modelling suggests that beneficiaries in private housing need around 45% of AHC median income to meet core expenditure in 2018 and 50-55% of AHC median income to have some capacity to participate in our society. However, the above trends in the relationship between household income and material hardship may suggest that the issue is more complicated than a balance sheet.

This leads to questions for us and the current Government – how is poverty experienced, materialised, and sustained for people in need? This is a poignant question to be asked with the induction of the 4th primary measure – persistent poverty. As the current Prime Minister Christopher Luxon declared that he aimed to deliver for all New Zealanders and meet their needs during his election night victory speech, the latest child poverty statistics should provide sharp points where New Zealanders’ needs are. The looming 2023/24 child poverty reduction targets and future reporting of persistent poverty are important reminders to the children that are, and will continue to be, affected by the “fragile” economy as declared by PM Luxon and highlight the urgency for the current Government to deliver to the dire needs of these children.

3)    It is of grave concern that Statistics New Zealand has been asked to make a 7.5% cut to its budget, given the paramount duty of the department to monitor a panoply of ongoing issues in New Zealand (RNZ, 2024). More resources are needed for StatsNZ to adequately track our progress on child poverty reduction as mandated by the 2018 Act.

Update 28/04/2024

When I originally concluded this year’s update to the child poverty statistics on March 19th, I hoped that data collection and therefore research on social issues would remain protected. As quality data is the cornerstone to informed policy making. However, only a little over a month later, we witness the scrapping and fund withdrawal from critical longitudinal studies, Living In New Zealand and Growing Up in New Zealand, that would provide critical insights to child poverty.

The Child and Youth Wellbeing team is also on their way out of the Department of Prime Minister and Cabinet and reshuffle into Ministry of Social Development at the April. This move is presented as a decision for better coordination and comprehension in address children and youth wellbeing.

Reference List

Radio New Zealand. (2024, January 26). The public service agencies asked to cut spending. Retrieved from https://www.rnz.co.nz/news/political/507659/the-public-service-agencies-asked-to-cut-spending

St John, S. (2022). Improving the child poverty reduction framework. Child Poverty Action Group. Retrieved from https://www.cpag.org.nz/s/0513_CPAG-improving-the-framework-23-May-2022.pdf

StatsNZ. (2024). Child poverty statistics: Year ended June 2023. Retrieved from https://www.stats.govt.nz/information-releases/child-poverty-statistics-year-ended-june-2023/