Child Poverty: We No Longer have a Welfare Net. Government Needs to Get a Move On

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Janet McAllister* let's fly at our collapsed "welfare system" and Government sluggishness in tackling the child poverty problem.                                    
Here is what she has to say. For the full article,  click this link.

Due to inflation and rising rents, we do not currently have a welfare net; it’s more of a platform submerged so deeply in water that people who fall on to it can’t breathe, even standing on tip-toes.

We need to spend serious money to eradicate poverty, and the longer we do nothing (or not enough), the more it’s going to cost us.

As well as Best Start and other initiatives and increases, July’s Families Package increased the money spent on “Working for Families” (WFF) family support by around $900 million to $3.2 billion.

Again, that amount seems very generous and yet, alas, when the inflation erosion of the last 8 years is taken into account, the WFF total now only is not much more than the WFF total in 2010 – in real terms, annual spending on WFF was $700m less in 2017/18 (just before the Families Package) than in 2009/10.  And of course we already had a serious and chronic child poverty problem in 2010. 

The current government has better, more visionary goals to live up to than simply “being a bit more generous to poor kids than the first-term Key government”. 

Meanwhile, because it’s not indexed to inflation, the amount spent on Working For Families is eroding again, even as we sit here. The government could, and should index it immediately to wages – it’s possible, even under the government’s self-imposed fiscal restraints, because indexation is by its nature incremental future-proofing and doesn’t cost much right now.

Although, let us be clear: those of us on reasonable incomes need to be willing to pay more tax – willing to show more love – so that all of us can eat. 

Next election, we need to vote in a government who’ll make this happen. Even if the current government spends a good portion of its newly-announced $5.5 billion surplus on welfare –and it should, people need it now – we’ll still need more.

The government needs to get a move on

We haven’t seen nearly enough urgency from politicians or bureaucrats; they’ve forgotten what it’s like to struggle to scrape money together for bus fare, if they ever knew.

The Welfare Expert Advisory Panel is not due to release its recommendations until February. Yet haggling over next year’s Budget has already begun. 

So , even before specific initiatives are known. Otherwise the government will unconscionably be making children wait yet another year for the relief that some of their parents needed 25 years ago.

What could be done immediately

And there are several things that the government could implement today, right now, without fear of pre-empting the Welfare Experts’ findings, such as a moratorium on sanctioning women on Sole Parent support who do not name the father of their children. This would fulfill a currently broken election promise at the low estimated cost of $25 million a year. 

CPAG is offering a number of other sensible and necessary ideas, to make “Welfare Fit for Families”. Removing the discriminatory criteria of paid work from the WFF In-Work Tax Credit is a no-brainer in a “fiscally constrained” environment – this would direct funding only to our very poorest families.

It’s still possible for Ardern and her government to be heroes – budget time in May next year will be their last chance, although ideally they’ll start saving the day earlier than that. 

And now that they’ve hit their debt reduction target four years earlier than expected, they can. 

For the sake of compassion, the time for politeness and complacency is over; the time for demands and action is now. My demand of two years ago remains: show us the money. And, in the form of tax, we’ll give you ours.

*  The Spinoff  guest writer and temporary contract researcher for the Child Poverty Action Group (CPAG).

Related
UN shocked by NZ Child Poverty
Adern outlines Child Poverty Reduction Bill (video)

Note
 In their 2018 working paper How effective are 2018 policy settings for the worst-off children? published by Victoria University of Wellington’s Institute for Governance and Policy Studies, Susan St John and Yun So calculate that families across New Zealand, with at least one dependent child, who are paying the rent at the level required to receive the maximum Accommodation Supplement in their area and who are receiving full entitlements of Job Seeker or Sole Parent Support plus the Family Tax Credit – that these families have only 21% to 35% of the equivalised median income after housing costs. 

Sole parent families on benefits with children sit at only 25-35% of the median, and couples with children sit at only 21-33%, depending on where they live and how many children they have. 

That’s between 1.7 and 2.85 times lower than the “60% of the equivalised median income after housing costs” poverty line measure – so saying they need “roughly two times” as much income after they’ve paid the rent to be on the 60% poverty line is a conservative estimate for most situations.