2015 Budget signals important change in approach to child poverty

Child Poverty Action Group says  it is heartening to see the first real increase in beneficiary incomes since 1972 announced in Budget 2015.

CPAG is pleased to see the government begin to honour its commitment to tackling New Zealand’s high rates of child poverty.  However, while this is a good start,  there is still much work to be done and  it is concerning that there is no immediate relief for poor children.  They must wait another year before anything changes for them.

Spokesperson Associate Professor Mike O’Brien says, “This budget signals an important change in the approach to child poverty in New Zealand, as it recognises that the best way to help children in poverty is to give more income to low income families.  

Mike O’Brien, says, “This increase recognises that families reliant on benefit income have fallen  behind other households over many years. Even a small  increase in family  income will make an enormous difference to the food on the table.  We know that the increased money which goes to parents will be spent on their children, in both beneficiary households and those in paid work.”

It is worrying that the range of assistance families  currently receive will reduce the effect of the benefit increase. Where families receive entitlements such as the accommodation supplement or supplementary hardship assistance, this will erode the value of the benefit increase. In real terms, $25 may become $10-$15 for many families.  These families are likely to be in the poorest circumstances and will effectively remain in significant poverty.

The changes to Working for Families impose more complexity on an already complex system and do not address the discrimination against children in beneficiary families whose parents cannot meet the required work expectations.

CPAG is concerned that, in a challenging work environment, where many regions have high levels of unemployment, the increased work expectations will be difficult for many families and are not necessarily in the best interests of children.

The budget provisions are an important first step, but they are only a first step.  The long term effectiveness of the changes will depend on the development of a comprehensive plan to build on what has been signalled in the Budget.

CPAG has prepared a brief summary of the 2015 budget and its implications for children and families. A full Budget Review will be available on our website shortly.