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Budget 05 offers little for child poverty

Budget 05 offers little for child poverty

Child Poverty Action Group (CPAG)'s annual post-Budget breakfast heard on Friday that following this year’s Budget measures our child poverty levels, recently estimated as among the developed world’s bottom four, will continue to be unacceptable for a comparatively rich country like New Zealand.

After last year’s Budget, CPAG cautiously welcomed the government’s substantial Working for Families (WFF) package, saying it represented an important shift towards greater investment in children and would begin to selectively redress decades of spiralling neglect under market-first economics.

However, Dr Susan St John told this year’s gathering that her fears that WFF had been intended not as a start but as a one-off were realised in this year’s Budget, when it became apparent that Working for Families is “it” for the next 3 years.

The package’s assistance is apparently “as good as it gets” for the poorest children, she said, who are rendered "all but invisible" as the package’s efforts focus on "rewarding" those children with parents in work. “Of course work is important, but “just get a job” won’t solve child poverty. The work emphasis has to be balanced by a deliberate, sustained, generous redistribution,” said St John.

Prof Innes Asher noted “This Budget is said to be about securing the future and the social health of New Zealand. However the word “children” appears only 3 times in the 18 page budget speech, illustrating how they are currently undervalued in the future of New Zealand. How wrong and short sighted this is.”

Sick families, like those Asher sees every day, are often not in a position to work. “Income is widely recognized as the most important determinant of health. Without an adequate income safety net, thousands of children are locked into the vicious cycle of ill health and exclusion, due to deprivation in the crucial early years,” she said.

Working for Families does offer a boost to many families in its three-year roll-out, but delays assistance in what St John described as “a cruel wait."

"It was cold hearted, having identified a child poverty problem, to make poor children wait a whole year [until April 05] for their first family support increase, particularly when the problem had already been growing for over a decade” she says.

Working for Families offers the least to the worst off. “The poorest families on sickness benefit have gained only around $7.50pw so far, with nothing more on the cards for another 2 yrs. Meanwhile core benefits and hardship cuts for those with kids, will save government a massive $230m a year,” said St John.

Yet the government has recently been claiming the package will cut child poverty by 70%. St John said that figure not only relies on full take-up of heavily bureaucratised assistance but also an impossibly low poverty line, at 50% of median income. “That’s $23,000 pa for four people. Rent alone could chew up to half of that.”

Is it any wonder, she asks, that despite a sustained economic boom the Auckland City Mission’s foodbank parcel numbers have doubled since 1998. CPAG considers that current levels of reliance on foodbanks like those run by ACM are totally unacceptable in a food-producing country like such as ours.

Nor has the government learnt from its predecessors’ mistakes. “The internationally failed model of discrimination in the payment of child supplements has been allowed to remain; it was introduced in 1996 in the form of the Child Tax Credit, which has been left in place til 2006, when it will be replaced by the In Work Payment. When the next recession strikes, as it will, parents will lose upwards of $60 pw” said St John. Yet a child still has the same needs, whether his or her parents work or not.

Asher, too, is unconvinced by the current level of government commitment to cutting child poverty rates. “There has been little evidence of improvement in child health as a result of new policies like market rentals and Working for Families, because they are not nearly enough to address the shortfall in need resulting from our country’s long term neglect of children. A few hundred new state houses won’t go far to fill a need for eleven thousand of them. The need to fully redress this policy neglect has never been more urgent,” she said.

Among new measures announced, St John credits the Kiwi Saver program with at least not giving more to the rich than the needy, no mean feat in a savings scheme. At the same time, she condemns its total failure to focus on children – "people with children must pay in the same percentage of income as those with none. No child impact analysis was part of the policy development process," she pointed out.

Furthermore, the scheme offers no returns until retirement; thus, in poor families, scarce resources may be diverted from the food needed on the table to feed kids now, said St John. “The government, in rightfully seeking to address the inadequate level of wealth in low income households, would do much better to look at cutting debt levels – to loan sharks, from pokie machines or the outrageously unfair student loan regime, along with rampant WINZ debt, easy credit and the use of retail cards.”

“The scope of the homeowership aspect of the scheme is very limited: another case of too little, too late where children’s needs are concerned. Only 3000 households will qualify for the top rate of assistance, $5000, and only in 2012. For a child born today, the most important developmental years will have long passed.”

Income, now as in the future, determines parents’ ability to afford to heat the home, buy clothing, bedding, soap and towels; pay for phone and transport, for participation in sport, visits to the doctor and prescriptions and to pay for education.

For 300,000 New Zealand children in poverty it is not possible to afford all of these things.

At the Knowledge Wave Conference 2003 Professor Dame Anne Salmond, speaking about NZ society said “If we want a prosperous knowledge economy, …the fate of the bottom 20% of our children should be at the top of our list of national priorities.”

ENDS

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