Editorial: The Government must act on poverty

23:17, Nov 02 2014

Unicef's latest report on child poverty in rich countries in the years after 2007 includes a special criticism of New Zealand.

"Australia's increase in spending on families had a more positive impact than the ambitious tax cuts implemented in New Zealand, where poverty and inequality stagnated."

The last part, at least, is blunt but fair - whichever way you dice it, poverty levels in New Zealand are flat.

Perhaps, one might argue, that is still an achievement after years of recession. The National Government has not cut such social spending as the Working for Families tax credits, a help to many low-income families during the past 10 years. But Australia's success begs the question: why are we not doing more? Prime Minister John Key says it's all about the economy - Australia famously bucked the global slump after 2007.

"A strong economy is the No 1 way to lift youngsters out of poverty," he says.

This is at least an incomplete view. It must be relevant that the Australian government launched what one group of academics calls a "massive policy response" to the financial crisis, putting "billions of dollars into the pockets of low and middle income families".


Some will argue that New Zealand cannot afford such spending. They will also say that policies to seriously dent child poverty rates are not worth it because they end up discouraging parents from finding work.

Yet those arguments get something truly wrong. What New Zealand cannot afford is to keep leaving so many of its youngest people flailing.

The statistics are complex, but it is fair to say about one in five Kiwi kids is growing up in a house with resources so meagre that they are held back from meaningful participation in society.

Is it any wonder that we keep seeing such figures across all the social indicators? There is a "long tail" of underachievement in our schools. A quarter of people face housing costs so high they are in financial stress. A quarter does not turn out to vote.

Does anyone doubt some connection here? These problems suggest a group cut adrift from the rest of the country.

It is not enough to insist that only a stronger economy can solve these problems. New Zealand's economy today is stronger than it was in the 1980s - the median household income has grown by half.

Yet the number of children in poverty has roughly doubled in that time. If their parents are earning, their real pay increases have been all but eroded by spiking housing costs. If they are not, their benefits have been cut.

Meanwhile, what it means to participate in New Zealand has changed - now it's an internet connection as well as bread on the table and a pair of shoes.

This is about priorities. To hold off spending more on children because it discourages work, or might slow growth, is to have them backwards. Everyone agrees it is unacceptable for New Zealand kids to grow up in deprivation. That must be the starting point here - it cannot be qualified away.

If the Government won't transfer more money to those in poverty, it needs to explain how else it will answer this profound problem.

The Dominion Post