Budget 2026 Analysis: Child Poverty Action Group

The Child Poverty Reduction Act (2018) and its amendments to the Public Finance Act (1989) require the New Zealand government to produce a child poverty report as a part of the yearly Budget process.

The report requires the Government and the Minister of Finance to report on progress towards the set child poverty reduction targets in the previous financial year and indicate how the appropriations of the current budget impact child poverty. Put simply, the central idea is to enhance accountability through integration of two monitoring streams – public finance and child poverty. Moreso, the binding of the two Act’s demonstrates the significance of governmental spending in child poverty reduction. 

Under this context, the forecastable measures – AHC50-fixed[1] and BHC 50[2] – shows little or no improvement and is projected to miss both the 2027 child poverty reduction targets and the10-year targets by 2028. Specifically, AHC50-fixed stands at 17.8% in the latest 2024/25 data and will stay exactly at 17.8% by 2030. For BHC50, the latest rate is reported at 12.6% and, similarly, stays at 12.6% in 2030. Thus, Budget 2026 and its policy initiatives are projected to have zero impact on reducing child poverty. Arguably, current inactions actively jeopardise our obligations under the targets set under the 2018 Child Poverty Reduction Act. 

[1] 50% of median after-housing-costs income, fixed to 2018 median income

[2] 50% of median before-housing-costs income relative to the current year