Submission on the Child Poverty Reduction Bill 2018

1              Beneficiary Advisory Service (“BAS”)[1] strongly supports this bill.

Our status as submitters

2              BAS was set up in 1992 to promote and protect the legal, social and citizenship interests of people on benefits and low incomes. Our workers, both paid and voluntary, are drawn from this group and derive a wide range of skills and opportunities through the work they do.  Our workers are of Māori and Pākehā/Palangi descent.

3              We are registered as a Charitable Trust under the name of the Christchurch Peoples Resource Centre.

4              Our primary service is to provide individual information, advice and advocacy for people who are experiencing problems in the benefit system. These problems range from simple entitlement questions to complex legal issues. We have dealt with many benefit reviews in Christchurch and we have helped to prepare cases for the Social Security Appeal Authority, the High Court and the Court of Appeal. People who are faced with social security problems can be referred to us if they contact other community agencies.

5              We have around 800 new clients each year and deal with clients from all over the country. This involves giving information and advice, direct negotiation with the Ministry of Social Development, assistance with applications, support with interviews, and representation at hearings. Our referrals come from other major agencies and a wide range of non-community sources. We are unique as a service in terms of a combination of perspective, knowledge and skills.

6              Through our work, we have regular experience of the appalling effect of child poverty on our clients and their families. We have observed these problems become significantly exacerbated when viewed across the past nine year period, whilst simultaneously being politically sidelined.

The background

7              In the absence of any meaningful tracking of child poverty by the previous government, key data from the Child Poverty Monitor 2017 [2] records that:

  • 12 percent of children are living in material hardship. That means 135,000 children in Aotearoa/ New Zealand are in households that are living without seven or more items, from a total list of 17, which are considered necessary for their wellbeing;
  • Six percent of children in Aotearoa/ New Zealand are experiencing even worse material hardship with households missing out on nine or more items from the list of 17.
  • 27 percent of children are living in low income homes. That means that 290,000 children are in homes where money is tight and are considered to be in income poverty.
  • More than seven percent of children are in severe poverty. That means that 80,000 children in Aotearoa/ New Zealand are experiencing both material hardship and living in a low income household. [3]
  • Child poverty is significantly worse than in the 1980s. In 1982, the percentage of children in families experiencing income poverty was 14 percent, compared to 27 percent.

8              Selective use of statistics has seen claims that 85,000 children living without seven or more items had been “lifted out of poverty” since 2011. [4] As other commentators have observed, [5] this was the height of the recession, however, and taking child poverty statistics across the three terms of the previous National-led administrations, the number of children living below 60 percent of the median wage after housing costs (the relative poverty line) is now 290,000 – 30,000 more than in 2008. Of greater importance, between 2008 and 2016, the number of children experiencing the most severe poverty rose from 105,000 to 140,000.

9              We note also that the previous government rejected the recommendations of the Expert Advisory Group on Solutions to Child Poverty in 2012, [6] on which this bill draws, as well as rejecting criticism of New Zealand’s high and persistent levels of child poverty by the UN Committee on the Rights of the Child in 2016. [7]  As the then Prime Minister famously observed, in the government’s view, it was easier to count rats, stoats or possums than children in poverty. Official advice on measuring child poverty was described as “airy-fairy”. [8]

10           For too long, then, clear measurements and targets have been avoided and the issue has been obfuscated by prolonged debate about the supposed inadequacies of competing measures. In each case, the technique has been employed as a political tool to avoid admitting to the existence of the problem; to undermine public support for change; and to further stigmatise low-income parents by arguing that children live in poverty because their parents are “bad” or indifferent to their needs. [9]

11           It was a deeply irresponsible approach, which has contributed to a shameful situation in this country.  As UNICEF has observed, we are talking about some of the most vulnerable members of our community living without the basic things they need to grow and thrive, including a warm, dry home, sustaining food, and adequate clothes and shoes. [10] Or in the words of the Expert Advisory Group, “[it] means, for instance, a much higher chance of having insufficient nutritious food, going to school hungry, wearing worn-out shoes or going barefoot, having inadequate clothing, living in a cold, damp house and sleeping in a shared bed”.

12           If similar statistics and observations attended the treatment of the elderly there would be a political price to pay, and policy choices over recent years reflect this.

13           It is almost trite to observe that Māori and Pasifika children are grossly over-represented in the child poverty statistics. Just under half of children in poverty by current measurements are Māori or Pasifika and rates of poverty (including persistent poverty) for Māori or Pasifika children are around double those for Pākehā/ Palangi.

 

The policy underpinning the bill

14           We have recorded this background because it seems to us to illustrate the fundamental and well-overdue justification for this bill as a political commitment device.

15           We echo the approach of one commentator [11] who notes that the bill:

  • will encourage successive governments and the wider community to focus on the challenge of child poverty and take active measures to address it;
  • can be expected to enhance political accountability for child-related outcomes by requiring governments to set transparent targets periodically and regularly report the results; and
  • should also mobilise and direct the resources of various government agencies to pursue the task at hand.

16           We now turn to the elements of the bill.

 

Measurement

 17           We support the suite of measures in clauses 9 to 13 of the bill.

18           We agree with the Departmental Disclosure Statement that these measures are essential to properly monitor the significant financial or material disadvantage referred to as “poverty”, because:

  • material disadvantage is multi-dimensional and therefore more than one measure is needed to properly assess trends and to recognize which groups are over-represented;
  • even when using multiple measures, at some points an assessment will be required as to where on the spectrum a particular level of poverty sits (poverty measurements having proved to be contestable in the past and subject not only to reasoned divergence of views, as the Disclosure Statement notes, but also to politically motivated obfuscation); and
  • poverty trends can be different at different levels of socio-economic disadvantage.

19           We support the bill in recognizing that poverty is intrinsically multi-dimensional and in avoiding an attempt to impose a single poverty threshold.

20           An example of the latter is the belated reference to a poverty measure based on households receiving less than 50 percent of the median household disposable income before deducting housing costs, employed by the previous government late in the 2017 election campaign. Against this approach, a significant number of families in this bracket experience significant material hardship. Further, as recognized by the Expert Advisory Group on Solutions to Child Poverty, rising housing costs take up a large proportion of the income of many, if not most, families in poverty, so there is good reason to use a poverty measure that accounts for this. [12]

21           In contrast, the four “primary” measures in clauses 9-13 and the six “supplementary” measures in clauses 14 – 20 are wide-ranging, clearly defined, and include a range of income-related factors. The combination will provide a more accurate picture across a multi-factorial issue.

22           We welcome in particular:

  • recognition of the impact of housing costs against a fixed reference year (clauses 16 – 18); and
  • the measure of poverty persistence as a primary measure in clause 13: in our experience, some of the children most harshly affected by poverty experience this as an enduring feature of their lives over a lengthy period. Evidence from sources such Otago University’s NZ Child and Youth Epidemiology Service demonstrates the appalling long-term impacts of exposure to child poverty, especially in the early years.[13]

 

Targets

23           We support the provisions of clauses 21 – 29 requiring the Government to set, publish, and periodically review targets to reduce child poverty and socio-economic disadvantage, using the primary measures.

24           We particularly welcome the fact that the targets are evidence-informed and take into account – among other things – measurement of income after housing costs are taken into account (clauses 16-18, 20).The income measure of 40 percent of disposable household income after housing costs in clause 18 is particularly supported, since children in this bracket experience the very worst poverty and are at greatest risk.

25           We accept that the length of the 10 year target that sets out the Government’s long-term objectives for reducing child poverty is a probably a regrettable necessity, given how deeply entrenched child poverty and the associated generational damage has been allowed to become.

26           In this context, the target is realistic. It is also consistent with this country’s commitment to the UN’s Sustainable Development Goals, under the previous Government. These include the goal of reducing by at least half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions by 2030.

27           We welcome the use of population percentages to determine the rate of reduction, enabling the target to remain consistent as the population increases.

28           The 10-year target will hopefully operate to encourage successive governments to take actions that have positive effects not only in the short term but in the long term also.

29           We also strongly support the 3-year intermediate targets that indicate how the Government will be working towards the long-term targets. These are a necessary step towards informing and assessing progress towards the long-term goals and should operate to facilitate integrated planning.

 

Reporting

 30           We support the requirement in clauses 30 and 31 for the Government Statistician to prepare a report in each financial year that measures child poverty, including a statement of the percentage of children living in households that fall within each primary and supplementary measure.

31           We particularly support the requirement in clause 32 that the Government Statistician, and the Chief Executive of the Ministry of Social Development (when consulted) must act independently (clause 32); the requirement that the Reports be published (clauses 35 – 36); and the need for the Minister to give reasons for non-compliance with the targets (clause 27).

32           It is highly regrettable that past neglect of the issue means that no current suitable data base and benchmarks exist.

33           We are encouraged that supporting information for the budget for the year commencing 1 July 2019 must include a report discussing progress made towards the targets and indicate whether proposed budget measures will affect child poverty (clause 38).

34           We note that clause 6 requires the Government Statistician to make decisions on concepts and terms used in the specified measures, as part of the statistical methodology under clause 33. These terms include “household income”, “housing costs”, “material hardship”, “persistent poverty” and “severe material hardship” and (with the exception of “persistent poverty”) must be defined within two months of the legislation coming into force. We understand the desirability of avoiding lengthy and technical definitions in primary legislation but we hope that there will be consultation on this issue with representative groups prior to these definitions being adopted.

35           In terms of reporting generally, we support the misgivings of the Child Poverty Action Group that the use by Statistics New Zealand of the Household Economics Survey, from which the Household Incomes Report is drawn, can lead to reliance on data that may be up to two years’ old. We support the suggestion that official data should be supplemented by a range of other more timely measures of child well-being, such as the uptake of food bank support services; in school charity services such as KidsCan; admissions to hospital for poverty-related diseases; and the prevalence of homelessness among families with children. [14]

 

The amendments to the Vulnerable Children Act 2014

36           We support the related changes made to the Vulnerable Children Act (now to be renamed the Children’s Act under clauses 41 and 42) in Part 3 of the bill.

37           The requirement to develop, publish and review a comprehensive child well-being strategy, with particular attention to child poverty and overcoming socio-economic disadvantage, is long overdue. It should support a strong preventative framework and better reflect the new aspirational focus in the bill.

38           Renaming the legislation by removing the word “vulnerable” not only reflects its broadened scope but also removes the stigmatization implicit (and perhaps intended)  in that terminology, when applied to children and their families who already face massive challenges in their day-to-day existence.

 

Summary

39           We applaud the political courage underpinning the introduction of this bill, with its long overdue implementation of the recommendations of the Expert Advisory Group on Solutions to Child Poverty in 2012.

40           Whilst outside the scope of this particular bill, we observe that the improvements to the disposable incomes of many families, through the Government’s Families Package, will not occur until July 2018. As well as dealing with issues such as school costs and accumulated debt, by this stage weekly outgoings such as rent may have increased. Additional policies that may contribute to reducing child poverty – such as housing affordability, industrial relations changes benefiting the low-paid, and improved access to social security assistance – will take longer.

41           In this context, and in the short term, we urge the Government to consider measures to meet the urgent and immediate needs of families in poverty through the revision of relevant ministerial programmes under the current Social Security Act 1964 and the extension of the Working for Families package to all low-income families.

42           In the longer term, we support calls for a comprehensive system of price and wage indexation to apply across most forms of social and family assistance, including tax credits and housing assistance, as the most effective lever to apply. [15] 

 

Written submission only

43           We do not wish to make an oral submission on this bill.

 

[1] Our postal address is: Christchurch Community House, 301, Tuam Street, Christchurch Central 8011. Telephone: (03) 377 3560 or (03) 377 8787. Email: bas.cprc@gmail.com. Facebook: @BeneficiaryAdvisoryService. Website http://www.bas.org.nz

[2] Available at www.childpoverty.co.nz

[3] A small drop in the number of children living in low income households was recorded in each case, as compared with 2016, following the 2015 increase in benefit levels and other adjustments (and the necessarily increased role of private charities).

[4] As, for example, in claims made by the Deputy Leader of the National Party in the first reading debate on the bill. https://www.parliament.nz/en/pb/hansard-debates/rhr/combined/HansDeb_20180213_20180213_16

[5] Susan St John, available at https://www.auckland.ac.nz/en/about/perspectives/opinion/opinion-2018/quarter-1/national-digs-itself-into-child-poverty-hole.html

[6] Expert Advisory Group on solutions to Child Poverty, Solutions to Child Poverty – Evidence for Action, Children’s Commissioner: 2012. Available from: http://www.occ.org.nz/assets/Uploads/EAG/Final-report/Final-report-Solutions-to-child-poverty- evidence-for-action.pdf.

[7] Available at https://www.scribd.com/document/326804085/Int-Crc-Coc-Nzl-25459-e#from_embed New Zealand is also a signatory to the UN Sustainable Development Goals, which include the goal of “By 2030, reduce by at least half the proportion of men, women and children of all ages living in poverty in all its dimensions according to national definitions”.

[8] Available at https://www.radionz.co.nz/news/political/314747/video-easier-to-count-rodents-than-kids-in-poverty,-suggests-key

[9] For these and other myths and misconceptions, see chapter 3 of Jonathon Boston and Simon Chapple, Child Poverty in New Zealand, Bridget Williams Books, 2018.

[10]  Available at https://www.unicef.org.nz/stories/election-17-ending-child-poverty-in-nz

[11] Jonathon Boston, available at https://www.victoria.ac.nz/news/2018/01/child-poverty-fight-requires-political-consensus

[12] Jonathon Boston, available at https://www.stuff.co.nz/national/politics/96509155/jonathon-boston-finally-after-a-poverty-of-debate-parties-commit

[13] Available at http://www.otago.ac.nz/wellington/otago069936.pdf

[14] Available at http://www.cpag.og.nz/news/new-child-poverty-measures-will-provide-a-broader-picture

[15] See chapter 6 of Jonathon Boston and Simon Chapple, Child Poverty in New Zealand, Bridget Williams Books, 2018.