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Progress towards child poverty targets

June 2021: This analysis reflects StatsNZ's revised figures released in April, and is now up-to-date.

The Child Poverty Reduction Act (2018) requires each government to set 10-year and 3-year targets on three child poverty measures. The current 3-year targets (baseline 2017/18) are to be reached by 2020/21 (reported in 2022). For an explanation of the measures see Latest Child Poverty Figures.

Progress at a glance:

A: BHC moving line:          

  • 2021 target: 10.5%.
  • 2020 (pre-COVID) actual: 13.8% 

B: AHC fixed line:   

  • 2021 target: 18.8%.
  • 2020 (pre-COVID) actual: 18.4%

C: Material hardship:        

  • 2021 target: 10.3%.
  • 2020 (pre-COVID) actual: 11.3%

Measure A: Before-Housing-Costs income poverty

Percentage of children living in households with less than 50% median equivalised disposable household income (moving line) before deducting housing costs (BHC). Source: StatsNZ.

Target: Looking at income before housing costs are taken into account, the Government aimed to reduce the child poverty rate by approximately a third between 2018 and 2021, from 16.5% to 10.5% of children over the three years, a reduction of around 65,000 children. In numerical terms, this is the most ambitious of the current 3-year targets.

Progress to date: On this measure, between 2018 and 2020 (to March, pre-COVID), the rate has dropped 2.7 percentage points (26,000 children) to 13.8% (approx. 158,000 children). So after two-thirds of the 3-year time period, the Government is not quite half of the way to its Measure A target.

The slight increase from 2019 to 2020 is not statistically significant, although it is in line with Treasury predictions that child poverty rates on this measure would drift slowly upwards after a drop triggered by the 2018 Families Package, unless there were further policies implemented to reduce child poverty.

2019/20 rates of poverty for tamariki Māori on this measure are 24% higher than the national average: 17.1% of all tamariki Māori or approx. 50,000 children live in Before-Housing-Costs poverty. This over-burdening of tamariki Māori is a reflection of ongoing colonisation, discrimination and breaches of Te Tiriti o Waitangi.

Looking ahead: Due to the moving-line nature of the measure, it is possible that poverty rates on this measure will decrease slightly (even if children no longer included in this measure are still in hardship), depending on how COVID-19 affects median incomes.

Measure B: fixed-line income poverty

Percentage of children living in households with less than 50% median equivalised disposable household income (fixed line 2017/18) after deducting housing costs (AHC). Source: StatsNZ.

Target: Looking at income after housing costs are taken into account, and comparing every year to the 2017/18 median income (“fixed line”), the Government aimed to reduce the child poverty rate by approximately a third between 2018 and 2021, from 23% to 18.8% of children, a reduction of around 35,000 children.

This is the least ambitious of the three targets due to the nature of the measure. Fixed-line reduction targets like this one are a "backstop for preventing deterioration" whereas moving-line targets are a "target for progress": "reducing poverty measured by a fixed line is a minimum test of progress during growth, but during periods of economic decline it sets an important backstop." (Corak, 2005, Unicef Innocenti working paper, emphasis added).

Progress: On this fixed line AHC measure, between 2018 and 2020 (to March, pre-COVID) the rate has dropped 4.4 percentage points or 43,000 children to 18.4% (210,000 children). The Government met its Measure B target within a year of setting it.

2019/20 rates of poverty for tamariki Māori on this measure are 15% higher than the national average: 21.1% of all tamariki Māori or approx. 61,000 children. This over-burdening of tamariki Māori is a reflection of ongoing colonisation, discrimination and breaches of Te Tiriti o Waitangi.

Looking ahead: Government officials have warned Jacinda Ardern, the Minister for Child Poverty Reduction that post COVID-19, poverty rates for children on this measure are expected to rise. Therefore, meeting the target may be in jeopardy as it is possible the rates will increase back over the 18.8% target.

Child Poverty Action Group is of the firm opinion that COVID-19 is not a valid reason for the Government to miss any of its targets to reduce poverty for children.

Measure C: material hardship

Percentage of children living in households in material hardship Source: StatsNZ.

Target: The Government aims to reduce the rate of material hardship (scoring 6 or more on the DEP-17 deprivation survey) for children by three percentage points between 2018 and 2021, from 13.3% (147,500) to 10.3% of children, a reduction of one fifth, or around 30,000 children.

Progress: Between 2018 and 2020 (to March, pre-COVID) the material hardship rate for children has dropped 2 percentage points or 18,000 children to 11.3% (130,000 children).

2019/20 rates of poverty for tamariki Māori on this measure are over 70% higher than the national average: 19.5% of all tamariki Māori or approx. 56,000 children. This over-burdening of tamariki Māori is a reflection of ongoing colonisation, discrimination and breaches of Te Tiriti o Waitangi.

Looking ahead: Government officials have warned Jacinda Ardern, the Minister for Child Poverty Reduction that post COVID-19, that material hardship rates for children are expected to rise strongly.

Child Poverty Action Group is of the firm opinion that COVID-19 is not a valid reason for the Government to miss any of its targets to reduce poverty for children