Child poverty miscalculation 'hardly ranks' as a scandal

The only impact of Treasury's miscalculations on child poverty will be that the Government will have to cut back on its bragging, it's been claimed.

The number of children Labour's Families Package lifts out of poverty will likely be fewer than predicted, thanks to a coding error.

"This is a deeply regrettable mistake and I apologise for it on behalf of the Treasury," Secretary to the Treasury Gabriel Makhlouf said on Wednesday.

"The Treasury holds itself to high standards and I'm disappointed to have not met those standards here."

The error also overestimated the number of kids who would have been substantially helped by National's rival poverty package.

Veteran political journalist and commentator Richard Harman told The AM Show on Thursday it's a small boo-boo.

"In the great scale of public service cock-ups, this one hardly ranks. If you go back just before Christmas for example, Defence had to admit they had a $148 million cost overrun. Back in June, the Ministry of Health miscalculated the DHB allocations by $38 million, and that had real consequences because DHBs had to cut services.

"Nothing is going to happen as a consequence of this. It simply means the Government's bragging is going to have to be cut back a bit."

The Government has two options, he says.

"Either they stand up and say, 'Oops, sorry - Treasury got it wrong. Not as many people in poverty are going to be helped as we hoped,' or alternatively they're going to have to find some more money."

Richard Harman.
Richard Harman. Photo credit: The AM Show

In December, Prime Minister Jacinda Ardern said the package would lift 88,000 children out of poverty by 2021. National said its package would lift 100,000 out of poverty in the same timeframe.

Both were based on the same flawed Treasury modelling. Mr Harman doubts the coalition Government will try to match the promised targets, because with all its other promised spending, there's no money spare.

"They've got very little fiscal headroom there at all. They've got even bigger problems. In March, for example, they're going to have to start finding money for the replacement of the Orions; they've got to replace a whole lot of school buildings; they've got to build Dunedin Hospital - that could cost $1 billion... anything unexpected that crops up causes a problem."

It'll be about a month before Treasury supplies its revised projections. Mr Makhlouf said it wasn't in doubt the package will help poor kids, regardless of the specifics.

"Our analysis continues to show that the Families Package will substantially reduce the number of children in low-income households."