Child Poverty – New Zealand’s Shame

Reprinted from The Common Good, No 65, Pentecost 2013

Susan St John

The Child Poverty Action Group (CPAG) is aiming to hold the government accountable for the failures of the In Work Tax Credit to provide for our most vulnerable children.

CPAG argues we have seen negligible political progress on reducing child poverty since the introduction of Working for Families. We argue that the design of that programme has got a lot to answer for in the perpetuation of child poverty in many families. When so many low income families are systemically left out of provisions designed to reduce poverty it is no wonder that we see the distress in our communities. Badly designed policy contributes to the huge social distress evident among low income families without adequate work and works against the common good.

Badly designed policy contributes to the huge social distress evident among low income families without adequate work and works against the common good.

At CPAG we believe private charity alone, important as it is, cannot solve this problem and that major changes to government policy are needed. But how is change to be achieved?

The Working for Families package has been widely criticised for the speed at which it was passed into law and the lack of transparency around its development – there was no public consultation – no green paper, no white paper, no select committee process and it was passed into law in one day. No account was taken of the 230,000 children who would miss out, despite New Zealand’s human rights commitments to protect all children.

As low income families lose hours of work through the troubling redundancies we are seeing or by losing work in the earthquake, their children become un-entitled to this very significant payment, even when no benefit is being accessed. We know of many instances first hand where families have been affected by the loss of this support.

Under the UN declaration on Human Rights – everyone has the right to social security measures such as family assistance payments to the caregiver aimed at reducing poverty. Maori and Pacific Island children miss out disproportionately so the policy is also racially discriminating in outcome.

In Work Tax Credit

In particular, a specific component of Working for Families – the In Work Tax Credit, a child-related family assistance payment – unfairly discriminates against 230,000 of our poorest children. This adversely affects the children of those not in paid work meaning that these children – through no fault of their own – do not receive the same financial support as others.

Children of beneficiaries have the right to be treated like all other low-income children. But it is not only beneficiaries’ children. As low income families lose hours of work through the troubling redundancies we are seeing or by losing work in the earthquake, their children become un-entitled to this very significant payment, even when no benefit is being accessed. We know of many instances first hand where families have been affected by the loss of this support.

Worse, the caregiver in these families can get bills from IRD for any overpayment made during this time. Some families may eke out an existence for weeks before going on a benefit and they may then find they are charged for overpayment as they were not meeting the hours of work rule for the IWTC.

In Australia, all low income children are treated the same, making their system much more effective than ours in reducing child poverty. We used to do that too until this element of the undeserving poor crept in, first in 1996 and then intensifying in 2006 under ‘working for families’.

A child’s needs don’t change just because the work status of their parent does. The extra $60+ per week the family misses out on currently could make a huge difference to their well-being. Since 2006 around $3 billion dollars has been denied to the poorest families. It is no wonder we are seeing such distress.

In Australia, all low income children are treated the same, making their system much more effective than ours in reducing child poverty.

Because the government is not listening to calls to improve the common good, CPAG has been pursuing the issue in the courts since 2008. We argue that this policy discriminates against children on the basis of their parents’ work status, which is prohibited under the Human Rights Act.

Court of Appeal Hearing

Our case has reached the Court of Appeal and we are committed to fighting for the rights of 230,000 New Zealand children. The ability to challenge the government in the courts has set a precedent. It affirms the right of non-government organizations to challenge policy on human rights grounds, on behalf of others, without the organizations having to be directly affected by discrimination.

As Professor Jonathon Boston, co-chair of the NZ Children’s Commissioner’s Expert Advisory Group on Child Poverty says, ‘Why are so few older people materially deprived? The answer, very simply, is that governments have implemented policies to minimise deprivation among the elderly. By contrast, New Zealand society has chosen to tolerate significant child deprivation. We could choose otherwise.’

The Child Poverty Action Group’s appeal against this discriminatory government policy will be held in the Court of Appeal in Wellington 27-28 May 2013. We are seeking widespread support for our action. Messages can be sent to Susan St John, CPAG, Pvt Bag 92019, Auckland, or email – admin@cpag.org.nz, or phone 027 5364 538. Check our webpage – www.cpag.org.nz.

Help fight the injustice of discrimination against 230,000 children. Please support CPAG’s legal challenge in the Court of Appeal.

Susan St John QSM is Associate Professor of Economics at Auckland University and economics spokesperson for the Child Poverty Action Group.

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