Child poverty not budging
Finance Minister Nicola Willis' view is ''the absolute best thing we can do to get children out of poverty is to support their parents into work and to better-paying jobs''.
But even if that eventually turned out to be true, it does not help the thousands of children suffering now.
Those still smarting from the government's surprise changes to the pay equity regime might well wonder what effect lifting the wages of many more low-paid women, and more quickly, might have had on the status of children of some working poor.
For the last seven years governments have been required to report on progress towards child poverty targets and what difference the Budget might make.
There are three measures - the proportion of children living in material hardship, those living in poor households before housing costs are considered, and those living in poor households after allowing for housing costs.
In the 2023-24 year there was no change from the previous year to the measure of those living in poor housing after housing costs were accounted for, and no statistically significant change in the other two measures.
While both housing measures were better than they were in 2018, material hardship, which had dipped to 12.5 % in 2022 from 13.3% in 2018, was back up to 13.4% last year.
The child poverty report issued this month by Ms Willis says the failure to meet the targets for 2023-24 reflected in part the impact of high inflation at that time on the cost of living.
An estimated 156,000 children are living in material hardship.
The government says reducing child material hardship is a particular focus and a priority in its child and youth strategy, but it is hard to swallow those worthy words when the government's refresh to the strategy downgraded the importance of food security. It also removed the measure relating to house quality.
It should not be forgotten either that the government, without any fanfare, watered down the previous government's 2023-24 target to reduce material hardship last year to 9%, raising it to 11%.
There have been few crumbs in this year's Budget likely to shift the child poverty dial, with Treasury forecasts showing rates of child poverty will change little in the next few years.
Giving 142,000 families an average $7 a week extra from Working for Families is not a game changer.
Nor was last year's poorly planned and oversold FamilyBoost early childhood education policy which voters were told would give relief of up to $75 a week for families earning less than $180,000. The reality was few regularly received the full amount.
Ms Willis may be hoping the tweaks to the system she will announce next month will raise confidence in the scheme, but questions remain about why this was not closely monitored from the outset and any necessary changes made well before now.
The government says its focus is on changing the circumstances trapping people in poverty by providing them with opportunities to make changes and choices.
But with high unemployment rates still biting, the opportunities for changes and choices are not obvious.
In such circumstances, stepping up sanctions for those on jobseeker benefits seems mean-spirited, time-wasting, and pointless.
Continuing funding for foodbanks for another 12 months has been welcomed, but as the Salvation Army points out, this alone does not address the ongoing demand for food security.
There are also concerns housing commitments are insufficient and that changes to emergency housing criteria are resulting in more homeless people.
The government has talked up its social investment approach which it describes as using data and evidence to allow earlier and more effective intervention, but it is hard to see the $275 million allocated for this will go very far.
The government says it is still committed to the 2027-28 10-year targets for child poverty - only 5% of children in poor households before housing costs are included, and 10% once costs are included, and 6% in material hardship.
However, so far its actions are more akin to commitment phobia.
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If they lose their jobs (or their 'roles' as we are now supposed to say), that means a potentially catastrophic loss of household income. (We should note as an example that the New Zealand Polytechnic sector, currently undergoing significant restructuring and financial downsizing, has a particularly important portfolio of older female employees; many of these workers have substantial institutional memory, keeping their organisations functioning more than many of the younger managers appreciate.) MSD should be focussed on helping young people to find paid work, and not having their resources logjammed by older women who would have previously had access to income support without red tape. The Laws of Stimulus The First Law of Holes, is 'stop digging'. (We note that a 'depression' is, literally, a hole.) Finance Minister Nicola Willis is digging furiously, burying alive suffocating Kiwis. The first law of stimulus is to stop public-sector retrenchment. That is the main single lesson from the near-forgotten Great Depression. The second law of stimulus is to have rights-based alternative sources of income that individuals of all ages can fall back on. The third law of stimulus is to stop pursuing a monetary policy that jacks-up interest rates; the 'cost-of-living crisis' is substantially a 'cost of jacked-up interest rates' crisis. (As I have already noted, debt is something that drives more people into the labour force; it's not just the amount of debt, it's also the cost of that debt.) We may note that New Zealand got out of the Great Depression by adopting all three laws of stimulus. And a fourth law, by using the cheap money to embark upon a very successful 'state housing' program, New Zealand recovered in 1936 to 1938 with double-digit economic growth and near-zero inflation. Some of those houses, well-built, are worth a fortune now. Fletchers and other capitalists made a fortune, too; this is the kind of stimulus which would meet Simon Bridges' business-perspective criteria. Homelessness was not acceptable to New Zealanders back then, as it seems to be now. Are we looking at a coming decade of escalating homelessness for older women? When just about every adult is 'in the labour force' – unhidden or hidden – desperately needing income while employment 'roles' are in decline, the social stresses cannot be contained forever. Younger people may revolt, turning to the underclass-politics of the street. Older people are more likely to die unseen, as too many did in July 2022 (many denied desperately-needed second-booster vaccines) when the Covid19 pandemic really hit Aotearoa New Zealand. Do any groups of influential people out there have the imagination and capacity to answer the call for humane economic revival? Or is it a case of those who would can't, and those who could don't? ------------- Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand. Keith Rankin Political Economist, Scoop Columnist Keith Rankin taught economics at Unitec in Mt Albert since 1999. An economic historian by training, his research has included an analysis of labour supply in the Great Depression of the 1930s, and has included estimates of New Zealand's GNP going back to the 1850s. Keith believes that many of the economic issues that beguile us cannot be understood by relying on the orthodox interpretations of our social science disciplines. Keith favours a critical approach that emphasises new perspectives rather than simply opposing those practices and policies that we don't like. Keith retired in 2020 and lives with his family in Glen Eden, Auckland.
