Surprise! More money reduces poverty!

Child Poverty Action Group strongly endorses Income Equality Aotearoa who say: “What poor families really need is more money.”

The key reason poor people are poor is because they don’t have enough money, and it is not a huge surprise that giving them money is a great way to reduce that problem. Because they have less money, the lowest socio economic groups have more health problems, particularly their children; inadequate, unhealthy and expensive housing; and lower education outcomes than needed to participate in and contribute fully to society. Crucially the safety net for families has not kept pace with increasing costs.

Research by the Centre for Global Development on giving cash transfers to poor families found a range of impacts including: lower crime rates, improved child nutrition and child health, lower child mortality, improved school attendance, and declines in teenage pregnancy.

The Government has made a start by increasing benefits for families with children by $25 a week starting 1st April. For families not on a benefit, there may be an increase of up to $12.50 a week but only if they meet the required paid work hours each and every week.  

Associate Professor Susan St John, economics spokesperson for Child Poverty Action Group says: “Many of the worst off families miss out on any extra from Working for Families on 1 April, and higher income families will see their payments disappear more quickly.”

CPAG believes that the government needs to spend $1 billion per annum on fixing Working for Families to make the step change required to significantly reduce child poverty in New Zealand.  

The changes to be implemented from April 1 will increase the In Work Tax Credit part of WFF to $72.50 per week. When work is insecure, and hours are irregular poor families may not meet the conditions to access this important weekly payment for their children. Those on benefits likewise do not qualify.  To make serious cost-effective inroads into child poverty, CPAG urges the government to extend this tax credit to all low income families.