'Disastrous' rise in Kiwis needing charity under National - poverty activist

Nine years of a National-led Government saw a "disastrous" rise in poverty, it has been claimed.

Susan St John of the Child Poverty Action Group told The AM Show on Friday they're celebrating having "a Government that is prepared to put children at the centre".

"National ran down Working for Families and it really did need a boost of extra money, and money matters," she told host Duncan Garner.

The Labour-led Government on Thursday unveiled its biggest spending plans to date - a $5.5 billion package it says will halve New Zealand's woeful child poverty statistics in four years.

From July 1 next year:

  • parents of newborns will get $65 extra a week for a year, with the poorer getting it for three years
  • pensioners and beneficiaries will get extra money to help pay for heating over the winter
  • the independent earner tax credit will be back
  • the Orphan's Benefit, Unsupported Child Benefit, and Foster Care Allowance will all be increased
  • Working for Families tax credits will be expanded and increased.

"There's children who are in very, very low-income families," says Ms St John. "Some of those children will not be lifted enough in this package, so there's a lot more work to do."

She acknowledges while money isn't everything when it comes to improving children's lives and opportunities, it's difficult to achieve much without it.

"If families don't have enough money to budget, then there's no point in giving them budgeting services. They're queuing up at the food banks. There's been a disastrous increase in the demand for charities to help these families. That's no way to run an economy."

National called Labour's families package "all smoke and mirrors", saying it will raise fewer children out of poverty more slowly than its now-cancelled tax cuts would have.

"Comparing apples with apples, during the same period National would have lifted about 100,000 children out of poverty, whereas Labour only plans to lift 88,000," said children spokeswoman Paula Bennett.

"We were the first Government in 40 years to lift benefits and the results are beginning to show."

The Children's Commissioner disagreed, crediting charities with lifting children out of material hardship.

The latest statistics in the annual Child Poverty Monitor only measured up until 2016, before National's benefit hikes came into effect. Andrew Becroft told The Nation at the weekend the biggest decrease came in material hardship, which charities alleviate; while income poverty - which the Government has a bigger hand in - only declined very slightly.

Ms Bennett also criticised the package's "$3000 baby bonuses that go to everyone, irrespective of whether they need it or not".

Some families still missing out

While a start, Ms St John says the Government needs to go further in its reforms if it's going to wipe out child poverty, rather than just halve it.

"Some low-income families don't get the full package - they've been excluded right from the beginning. They're families who are on benefits, families that don't work enough hours - they miss out on $72.50 a week. There could be about 200,000 children in that category."

Child Poverty Monitor
Photo credit: Child Poverty Monitor

Revenue Minister Stuart Nash said around 670 families would be worse off under the changes because of "complex interactions in the tax and transfer system", but a transitional fund has been set up to help them.

Another criticism Ms St John had of the package is that it doesn't appear to be indexed to wages or inflation, like superannuation.

"[Super is] linked to wages, which is why we don't have a huge problem of poverty amongst old people."

She says there is a bias against beneficiaries and low-income earners.

"We give older people enough money, and we don't say, 'Are you going to spend it on the pokies or cigarettes?'"

She hopes the Government's upcoming legislation to measure child poverty will look at a range of measures, rather than just material hardship or income poverty, for example.

"The jury is out."