State housing in Lower Hutt. Photo by Hagen Hopkins/Getty Image
State housing in Lower Hutt. Photo by Hagen Hopkins/Getty Image

PoliticsDecember 30, 2018

Grading the government’s first year for children in poverty

State housing in Lower Hutt. Photo by Hagen Hopkins/Getty Image
State housing in Lower Hutt. Photo by Hagen Hopkins/Getty Image

Susan St John of the Child Poverty Action Group assesses the government’s impact on the lives of the most deprived children after its first full year.

For children’s advocates the end of 2018 saw much cause for gratitude and celebration.

Grant Robertson affirmed that Budget 2019 will have a wellbeing focus.  For the first time children are to be prioritised, and it will be acknowledged that a successful economy is much more than budget surpluses and economic growth.

As well, in an historic show of political agreement, we now have a Child Poverty Reduction Act. The new Act sets out poverty measures and ensures targets will be set by government of the day. Expenditures to meet those goals must follow, and cross-party support means the Act should survive changes in government. But groundbreaking as these are, Prime Minister Jacinda Ardern herself said, “these are just the foundations and it’s all about what we do.”

What’s difficult to swallow in amongst all the good cheer, is that promises alone don’t feed hungry children. At Christmas time 2017 there was unprecedented demand at the Auckland City Mission. Families in desperate need were offered promises. They then had to wait for the Families package during a long hard winter until 1 July 2018 by which time it made barely a dent in their distress. The situation has been worse this year. Spreading their Christmas goodwill across three locations now instead of one, the Mission had to turn away hundreds daily as demand exceeded their capacity to help. Families, even with young children, and in inclement weather, were desperate enough to queue all night to be at the front of line.

While some families received an Accommodation Supplement increase on April 1 this year, much was swallowed up by rent increases and loss of hardship payments. Over the course of 2018, the median rent has risen by $30 – and the increases may be as much as $50 in some areas. The Child Poverty Monitor released last week shows that one in five children live in households without access to enough food or healthy food. These children should be the focus of immediate Government action.

The 2019 Budget plan won’t be announced until May 2019, and any actual improvements to incomes may not be implemented until much later. In the meantime, the unremitting poverty families face daily is causing irreparable damage to their lives of their children. 

Families are still paying back debts to the Ministry of Social Development after being housed in motels to avoid being homeless over winter. Solo mothers are still losing $28 or more of their benefit through not identifying the other parent on their children’s birth certificates. Beneficiary families are still missing out on $72.50 each week of tax credit payments because they don’t meet the discriminatory, paid work test criteria while they carry on the challenging work of parenting the next generation.

Next April the minimum wage increases by $1.20 per hour to $17.70 – making those working full-time jobs at the minimum wage nearly $50 gross better-off each week.  This is very welcome and will make a difference to many single low-income earners.

However, many minimum wage working families with two earners are already at or above a combined household income of $42,700. From this income, every extra dollar earned means a 25c loss of Working for Families and a 25c loss of any Accommodation Supplement. Along with tax and student loan repayments there may be very little to show for the increased wage. Let’s hope the Welfare Expert Advisory Group (WEAG) are working that one out and giving the government some clear advice.

Chris Farrelly, the Auckland City Missioner, has outlined a very stark and grim picture of deprivation in Auckland. Many Aucklanders are shocked at what is unfolding amid the clear and growing affluence of the city. The WEAG has been tasked to unscramble the welfare mess but waiting for that report that should not preclude obvious action.

Child Poverty Action Group says there are simple things that can be done to alleviate some of the distress. Some suggestions are: removing punitive sanctions on beneficiaries; wiping all debts incurred through housing grants and other overpayments; removing the discrimination in Working for Families to give the worst-off families an extra $72.50.

In 1936, the first Labour Government made a pledge to improve lives in Aotearoa, setting a precedent by giving a Christmas bonus to all the unemployed. It might be too late now for a Christmas bonus, but it is not too late for a New Year’s bonus package to help struggling families. 

Susan St John is an Hon Associate Professor at the University of Auckland and a member of the Child Poverty Action Group management committee

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