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Labour promises a bold approach on poverty. But will it be bold enough?

Jacinda Ardern has signalled her focus by adopting a portfolio tackling child poverty. But will the coalition government have the mettle to make the differences needed, asks Jess Berentson-Shaw.

Prime minister Jacinda Arden has shrugged on her swannie, pulled on her red bands, and is wading into the mud to pull out a struggling lamb. By making herself Minister for Child Poverty Reduction the new prime minister has put a bold stake in the ground, one that says, “I commit to the hard work of fixing child poverty”. It is certainly a bolder statement than John Key making himself Minister for Tourism (which was more akin to slipping on a pair of red stilettos and sipping some bubbly). But will it become a rod for her back?

Making yourself Minister for Child Poverty Reduction comes with two big risks: the first risk is that the policy agenda is not one that will work to turn the dial on child wellbeing. The second risk follows from the first, and it is that knowing these policies cannot make a meaningful shift people in government will fall back onto “vanity statistics”. These are statistics that measure something, but not the thing that matters. It is something we saw a bit of in the last nine years. There may be ways to mitigate these two risks. But first, let’s consider the policies that have been laid out and how likely it is that we are going to end up in a vanity stats situations.

Will the policies announced to date work to ensure all children thrive?

Right now, the bulk of New Zealanders are not that into considering progressive policy ideas (maybe all that Think Big stuff that went down in the ’70s freaked people out). The rub is, to really deal with the long term, intergenerational poverty traps, created or reinforced by specific policy choices, the evidence shows that some pretty progressive stuff needs to happen.

What I see offered so far are a range of sensible policies that will help Ardern and people in her government shift the dial slightly on child poverty. There is some stuff that is politically necessary but which could actually make the imbalance between families worse. I also see a few policies that could with the right treatment become “progressive by stealth” policies.

Jacinda Ardern with the nieces of partner Clarke Gayford during at parliament after being sworn in as PM. Photo: Hagen Hopkins/Getty Images

The policies that will help a little bit

Best Start

Labour’s Best Start payment to all families of $60 of week will help for two reasons. It goes to all families with babies and continues for three years for the lowest income families. It is not enough, based on the evidence, to remove the serious economic stress many families on very low incomes face, but it is a start. It is a policy that will help the “near poor” most, I suspect. The unknown here is how it will impact on a whole lot of other income test payments – eg working for families, welfare, childcare subsidies, income related rent subsidies. Extra money can, as I discuss below, sometimes end up costing a family on a low income more.

Free healthcare to under 14s

Removing the direct costs of primary health care visits will help a bit, but we know from research that the associated costs of visiting a GP are very high for parents on low incomes.

Eliminate the gender pay gap (core public sector this term)

The majority of low-income parents are women, the majority of low-income sole parents are women, and women are paid less than men. Anything we can do to remove the pay gap will help improve outcomes for children; however, this is a policy likely to have a larger impact on the middle not the lowest income groups where the gender pay gap is less extreme.

Minimum wage increase

We know that at least half of children who experience material deprivation have a parent in work, so an increase to their parent’s wages will help. However, the same caveat applies as with the Best Start payment, if this extra income pushes parents over subsidy and tax thresholds, the net economic benefit to a family may be nothing, and children’s outcomes will not improve.

Policies that might make inequality and poverty worse

Extending paid parental leave to 26 weeks won’t reduce imbalances between families. Paid parental leave goes to relatively better off families. If you have been in precarious work, on a benefit at some point while pregnant, have a partner who is studying, are studying yourself, have been caring for another child or family member, have been ill, you don’t qualify. This maintains a gap between our poorest families and everyone else during a critical phase in a child’s life.

Progressive policies by stealth

The number of things that won’t be considered by the tax-working group was quite large by election time. However, a bold statement if this group were to fold in the review and payment increases of Working for Families, welfare payments and abatement rates, along with all other family payments (like Best Start and Paid Parental Leave), and look pretty hard at the impact of all these policies on families living with the least. The important step would be to act boldly to break the effective marginal tax trap in the next term.

For families on low incomes the way that income support policies interact with each other and with tax rates is where the real nightmare is.

The Housing Commission

While comprehensive housing tax is clearly off the agenda for the tax working group, perhaps it may come in via a stealth move in the Housing Commission? The impact of a more comprehensive tax on property would be to damn the flood of capital wasted on housing in New Zealand, bring down property prices and diminish the economic devastation housing costs wreak on low income families.

Overhaul of the welfare system

Much is dependent on the word excessive in the “remove excessive sanctions” part of the Labour/Greens agreement. It could mean just one sanction removed, such as having to name a father, or it could mean doing what works and removing all conditions placed on parents of young children. Conditions including forced enrolment in childcare, attendance at work training when you have pre-schoolers, MSD deciding what constitutes a relationship and removing benefits based on an old fashioned idea a new partner will pay for children who are not their own.

If bold enough then such policies may really ensure children from families who are struggling get access to the same opportunities to thrive as other children.

What is the risk of vanity statistics creeping in?

If we assume that only the sensible policies are implemented, then the likelihood of righting the imbalance on children’s wellbeing is pretty low this term. And if the public has little tolerance for slow change then it increases the risk that metrics like “number of families moved over the income poverty line”, are relied upon far too heavily. I am not saying these are not important metrics, but I am saying these metrics tell us little about the outcomes that really matter in families’ lives.

But there may be a few solutions.

1. Change the words

Words matter, they build pictures and stories in our minds, stories that contribute to what we believe the problem is, drive where we focus our efforts, and how we measure our achievements.

Too much talk about “child poverty” cements the idea that children are just the victims of their families and whānau’s poor choices, or even worse totally discrete entities from their whānau. Child poverty is a term that stops us thinking about the issue at the heart of child wellbeing: families, wanting the best and working their hardest, with few real choices. These words conjure a very different picture of the problem (and solution) than “child poverty”.

So why not call it Minister for Improved Whānau Wellbeing? That would focus both the policy and the metrics of success on where it matters – on the parents and children who are doing it alone, parents in low paid jobs (often more than one), parents of children with special needs, our grandparents raising children, all those who have been squeezed and stressed and punished by a series of poor policy choices. The measure of success will not be ‘reducing the number of children in poverty’, rather they will be as I have discussed, something much better: improved wellbeing.

2. Do something clever with social investment for the short-term win for children

On social investment Ardern has said they want to “take some time look at that work”. One way to overcome some of the risk of not achieving real change may be to turn the social investment unit into an experimental policy unit at prime ministerial level. Trialling progressive ideas, the unit could use the data in the integrated data infrastructure ethically. One idea might be to test an unconditional cash payment to sole parents (a group of parents and children who are in real need of massive investment). If you can show that something works on a small scale in the shorter term, the public may have more tolerance for the other metrics not showing change in that period.

3. Turn Whānau Ora into a shining light

Whānau Ora is a very innovative policy approach internationally; it is getting great (but little lauded) results. Why not bring the approach and results into the child poverty unit being set up, and show a commitment to ways of addressing family wellbeing as decided by Māori themselves?

It’s a risky business trying to achieve massive meaningful change after years of inaction on poverty. The hard work of shifting a nation to more progressive thinking is going to take years, and in the meantime the public may not have the patience to wait for change to happen. I hope they do, but I also hope we see some bold moves made, too.


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