Child Poverty in New Zealand
Jonathan Boston and Simon Chapple
Bridget Williams Books, $50.00,
“New Zealand has the necessary resources to reduce child poverty, and equitable and efficient ways to secure these resources are available. The question is not about our capacity, it is about our political will.” This is the unequivocal conclusion of Jonathan Boston and Simon Chapple in their book Child Poverty in New Zealand. They base it on their exhaustive analysis of the scale, complexity and damage of child poverty, and the myriad ways we could tackle it.
We have to confront the scale. Between 130,000 and 285,000 of our children live in poverty, the number depending on the measure used. But any fair measure accounting for deprivation puts the number at the top end. This ranks us 18th among developed countries with 18 per cent of our children impoverished, triple the rate of the best countries, which are the Scandinavians plus Luxembourg.
We have to confront our failures. So many of our policy responses to child poverty are deeply compromised by political expedience and economic short-termism, Boston and Chapple reveal with scholarly and clinical precision. In essence, we have failed to put children first in the policies affecting them.
One of their most striking examples involves the “active employment system”: that is, the range of government programmes that help people train for and find work. The sums aren’t large – 1 per cent of GDP ranks a country in the top five of the OECD, although the biggest spender is Denmark at 2.3 per cent. Notably, these leading countries are among the most innovative and resilient.
Work matters because, as the authors note, “finding parents sufficient hours of employment, even at existing low pay rates, goes a long way to pulling children out of poverty.” Yet our spending on active labour market programmes plunged from 1 per cent of GDP in 1992 to 0.3 per cent in 2011, ranking us 22nd in the OECD. People, and the economy, are poorer for it.
We have to confront the cost of these failures. The negative impact of child poverty on wages, crime, health and welfare in New Zealand is a loss of 4.5 per cent of GDP. That completely negates the economic gains we derive from five million cows in the dairy sector, this author adds.
Yet, we need to spend only a couple of billion dollars a year to substantially reduce child poverty and mitigate some of the negative, compounding impacts on it from poor housing and inadequate education, Boston and Chapple estimate. This equates to just over 2 per cent of the government’s budget this fiscal year. Such investment would reap substantial rewards for individuals and society, such as healthier and more productive people, and reduced social and welfare costs in the years ahead.
Moreover, the authors identify four ways to fund this investment in society: raising additional revenue; shifting some government expenditure from older to younger New Zealanders; treating the investment in reducing child poverty as a capital rather an operating expense; and using some of the fiscal headroom arising from the projected fall in the relative cost of welfare expenditure over the medium term.
Theoretically, our current government is thinking along some of these lines. For example, it has set itself 10 goals in its Better Public Services programme. The first is to reduce long-term welfare dependence. The target is to “reduce the number of people continuously receiving Jobseeker Support for more than 12 months by 30 per cent, from 78,000 in April 2012 to 55,000 by June 2017.”
But while the government has programmes to help people train for and find work, the greatest determinant of success will be the vigour of the economy. Yet, forecasts show the economy is slowing, drifting down towards its long-term growth rate of around 2.5 per cent. Moreover, even work is not a panacea. Some 10 per cent of impoverished children live in working families.
“Supporting vulnerable children” is the theme for goals two to four of the programme. The targets here are to increase participation in early childhood education and immunisation programmes, and to reduce incidence of rheumatic fever and assaults on children. These are vital child-centred goals. But they are not specifically targeted to reducing child poverty. The remaining six goals – focussed on skills, employment, crime and interaction with the government – are even further removed from children.
The government is also experimenting with an investment approach to social challenges. Investing in solo teenage mothers is the single existing example the government cites. It says its newly customised, intensive support for those young women will make for better mothers and healthier children.
Long-term, society will benefit from stronger families and more productive people. Thus the cost of looking after them is dramatically reduced, representing an impressive return on the initial investment, says Finance Minister Bill English.
Paula Bennett was champion of the programme when she was Minister of Social Development. Now she is Minister of State Services tasked with applying such innovation more widely. English says this partial shift from spending to investment allocations will become the biggest change in budget architecture in a generation.
But note that the Finance Minister talks more about money than people. Where is the compassion in this? Where is the understanding of the particular circumstances and wider societal issues that laid a person low? Where is the deeply personal help they need to rebuild their lives?
That said, the investment approach is commendable, but piecemeal and not explicitly tied to eradicating child poverty. Worse, it likely lacks wider political support. Broadly speaking, parties to the right of National want less social spending and more radical innovation in, for example, education; and parties to the left want more spending and less innovation. Ample funding and effective innovation could prove politically elusive.
So how might we achieve a political consensus? How might we commit to a Child Poverty Act, as Boston and Chapple advocate, to focus our efforts, set hard targets and measure our progress?
The authors help by debunking myths about child poverty, as a way of building popular support for action. They also suggest ways to overcome politics’ left-right divide, such as common ground and policy variations with factional appeal, which together would reduce child poverty. Above all, they offer a wealth of research, analysis, recommendations and ethical reasons for why and how we can do right by our children. “All New Zealand children, regardless of the family into which they are born, ought to have a fair opportunity to thrive and belong. Such a goal should not be controversial politically,” Boston and Chapple say.
Yet, for all the power and persuasion of their work, which is the definitive primer on the sociology, economics and policy of child poverty, something is missing – as it is from the Herculean efforts of the Children’s Commissioner, the Child Poverty Action Group, churches and other advocates of social justice for children.
But the failure is ours, not theirs. As a society, we talk and lament, but we have yet to act decisively. We have lost our moral compass. Unless we find it, we will keep failing our children.
Rod Oram is a business journalist. He contributes weekly to the Sunday Star-Times, Nine to Noon, Newstalk ZB and Kiwiki, his Facebook page on the economy. He is a frequent public speaker on business and economic issues and he Tweets a bit.