Families package is tip of the iceberg for families in poverty

The Salvation Army’s annual State of the Nations report released today shows that improving incomes will only be the start of reducing hardship among children and families in Aotearoa-New Zealand, says Child Poverty Action Group (CPAG).

The report signals that housing cost and need is a critical issue for those living in poverty.

While the report acknowledges a small reduction in the poverty rates (based on 2015 data), four out of ten children living in income poverty (based on the 60% after housing costs measure) have at least one parent at home working full-time.

“Many working families on low wages are facing increased financial pressure as they struggle to meet housing costs, and food insecurity is a growing problem,” says says Associate Professor Mike O’Brien, CPAG social security spokesperson.

The Salvation Army reported a 13 per cent increase in food parcel distribution last year, while the number of Government hardship grants for food increased has increased by nearly 40,000 since 2015 (December 2017 MSD figures).

“A sudden leap in emergency grants for housing and food last year is evidence of increased housing stress, and inadequate incomes, both for families who are working and those who are in receipt of welfare benefits.”

“There is a serious under-supply of social housing, and many families with children are currently at the end of a very long waiting list. We need thousands more houses built urgently, and increased security for those in private rentals.”

The Labour Government’s Families Package will come into effect on July 1, but low-income families have had to wait far too long. Many have accumulated debt that makes their recovery from poverty so much harder.

“While the changes on 1 July will improve family incomes in the short term, it is not enough for many of the very worst-off families,” says Associate Professor Susan St John, CPAG economics spokesperson.

“If the discrimination from the Working for Families (WFF) In-Work Tax Credit was removed, thousands of children would have a significant boost, and families would be less likely to have to borrow to survive. Given the political will it is feasible for this to happen on 1 July.”

“The Government must commit to properly indexing tax credits and benefits and increasing them yearly, just as the case is for New Zealand Super.”

CPAG says that the Child Poverty Legislation Bill which passed its first reading unanimously last night, sets the framework for changes, but measures and targets must be accompanied by policy adequately designed to achieve them.