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Lift super age 'to beat child poverty'

ROB STOCK
Last updated 05:00 22/06/2014
Child Poverty Book
Authors Jonathan Boston and Simon Chapple

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Child poverty could be addressed with help from money freed up by lifting the age of eligibility for NZ Super, a new book, Child Poverty In New Zealand, out this weekend has claimed.

The book's authors, academics Jonathan Boston and Simon Chapple, said progressively deferring NZ Super until age 67 would be a reasonable step to free up money to reduce the blight of child poverty.

They canvassed various ways to raise the money needed to make inroads into child poverty and therefore lift the trajectory of our economy.

Along with lifting the tax-take and borrowing more, they said: "One option would be to rebalance government spending between younger and older citizens.

"New Zealanders are getting healthier, living longer and voluntarily staying longer in paid employment past the age of 65.

"A case could be made for expecting capable, older New Zealanders to support themselves without the benefit of New Zealand Superannuation for a bit longer," they said.

The authors said many other countries had moved that way. Moving the age of eligibility would just be a start - it should then be indexed to life expectancy as Denmark has done.

That was a better way of reducing costs without cutting NZ Super payments, they said.

NZ Super has a good record for keeping older people out of poverty and the suggested moves could help do the same with children, they said.

That would be more equitable to the nation's children, the book's authors claimed, although they admit thought would have to be given to those who were too unwell to work past 65.

It would be a policy setting that would be "fair to all generations", the authors claimed.

They favoured using the tax and benefits systems to help families rather than lifting the minimum wage.

How much money would be needed to lift children out of poverty is a matter of conjecture.

But the authors estimated the cost of lifting all poorer people to exactly "before housing costs poverty lines" was between $800 million and $1.8 billion a year.

Child poverty, which in New Zealand means relative poverty as opposed to the kind of Third World misery spoken of globally, is wasting human capital, hindering productivity and lumping costs on to the economy through issues like crime, and mental and physical ill-health, they said.

Ameliorating the impacts of child poverty, including from an economically inefficient population, could be as high as 4.5 per cent of GDP a year.

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Some of the money saved could be spent on areas like tertiary education to lift the educational attainments of poorer kids.

The authors called for the end to taxpayer subsidies which keep student loan interest rates at zero, thereby enabling "families with significant savings to maintain interest-bearing investments while borrowing from the state at zero interest".

- Sunday Star Times

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