Improving economy brings opportunity to address child poverty

CPAG would like to see a clear political commitment in the 2014 budget that the proceeds of growth will be shared fairly, to support those most in need. 

Associate Professor Michael O'Brien

Will the 2014 budget improve the position of the poorest children and will children be prioritised as the economy recovers?  

Child Poverty Action Group says as the economy moves out of recession and government finances improve, there is increased scope for new spending to address child poverty. 

Spokesperson Associate Professor Michael O'Brien said, "CPAG would like to see a clear political commitment in the 2014 budget that the proceeds of growth will be shared fairly, to support those most in need."

Child poverty is not inevitable.  It can be reduced dramatically by policy change and the government has a major role to play.  Michael O'Brien said, "It is vital that government adopts a comprehensive strategy to reduce child poverty.  While new funding has been signalled to address rheumatic fever, head lice and budgeting services for the 2014 budget, a much broader strategy is needed to address the underlying causes of New Zealand's high rates of child poverty."

Paid work can make a difference for families, but this needs to accommodate the needs of children.

CPAG's economics spokesperson, Assoc Prof Susan St John, said, "The government's focus has been on economic growth and jobs as silver bullet solutions to poverty.  Many sole parents cannot undertake or maintain enough paid work to sustain a family, especially when children are young. Some parents need sickness benefits or other state support. Even families in paid work can struggle, with 40% of all poor children found in such families."

St John said, "Children in all families deserve the chance to thrive.  It's crucial that the social welfare safety net that supports families in tough times is repaired and strengthened.  Job-seekers, carers and disabled people need to have adequate income to raise their children.   Current benefit levels and the lack of proper weekly child tax credits means there is insufficient income to protect children from material hardship and poverty. New Zealand's poorest families simply do not have enough to live on." 

In the budget statement 2014, CPAG believes the main priorities are:

A comprehensive plan to reduce child poverty

To achieve the broad changes needed to tackle this complicated and intractable issue, New Zealand needs a comprehensive government plan to reduce child poverty with targets, measurable outcomes and regular reporting requirements.  

Focus on the causes of poverty

The government's current focus on vulnerable children is too narrow and does not take poverty into account.  It ignores the social and economic conditions that create or exacerbate children's vulnerability and ignores poverty as a major contributing factor to family violence.  It has cherry-picked a handful of policies which address some consequences of inadequate family incomes, such as rheumatic fever, housing insulation and the epidemic of head-lice, without addressing the underlying causes.

Children's dividend  

A growth strategy that will generate meaningful jobs is a key issue, but economic growth alone won't fix the problem, particularly if growth is not distributed equally.  Deliberate and significant redistribution is also required.  The Government must ensure the recovery does not just result in gains only for a privileged few while the poorest miss out yet again.

  • Benefit levels must ensure an adequate income for families to meet their needs, and protect children from poverty and material hardship.
  • All children in low income families must receive full Working for Families tax credits.  
  • Low income families need protection against the gradual erosion of government support, through proper indexation of benefits and tax credits, in the same way as superannuation.
  • Full indexation of all aspects of family assistance is required, not only to protect against inflation but also to reflect the growing economy and higher wages.