CHILD POVERTY ACTION GROUP

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CHILD POVERTY ACTION GROUP

• WHAT IS IT
• WHO ARE WE ?

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Poverty in NZ

• Insufficient income for

Nutritious food Adequate housing Clothing Health
care Education
Which age group has most people in poverty?
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Estimate of New Zealanders in poverty
Poverty
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Children in poverty

• 1987/88
• 16 of dependent children
• 2000/2001
• 29 of dependent children
• about 300,000 children
• Ministry of Social Development 2002.

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13 years of research reports galore
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NZ Government Reports June 2002 Governments
aim to end child poverty
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Money isnt everything, but

• Children need
• Stable and secure housing
• Sufficient income
• Without this minimum, any family dysfunction
  cannot be addressed

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Trajectories of Children on the Extremes
High IQ, low SES
High IQ in low socioeconomic families
Low IQ in high socioeconomic families
Low IQ, high SES
Feinstein L. Economica 2003 70 73-97.
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Why are families so poor?
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Specific effects of low family income per se on
children

• Poorer cognitive abilities
• Lower educational achievement
• Behavioural problems

Brooks-Gunn J et al. In Children Poverty 1997
7 55-71 Mayer S. NZ Ministry of Social
Development 2002.
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Education and Health

• The foremost enabler of health is education.
• Maternal education is the strongest predictor of
  child health.
• Professor Sir Geoffrey Rose. The Strategy of
  Preventive Medicine, 1992.

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Auckland City MissionFood Parcel totals as at
31 May
Doubling since 1996
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One child, two parent family on benefit

• Maximum Family Support
• 1986 42 a week
• 47 a week
• Needs to be 75 to have the same purchasing power

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Problems

• Child-related payments are
• too low
• have not been adjusted for inflation
• cut out from low income levels
• are all related to income
• poor children dont get the child tax credit

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2004 Budget

• This is the biggest offensive in the war against
  poverty in decades
• Helen Clark
• Using a poverty value measure of 60 per cent of
  median household income there is expected to be a
  30 per cent reduction in child poverty by
  2007/08.
• 
  Budget 2004

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Budget will help- eventually
For those on benefits
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Other countries do much better

• UK universal child benefit
• 16 for the eldest child
• each other child 11.
• Australia
• Quasi-universal payment of A 21.00
• Only 6 miss out and only when income is
  86,000-126,000.

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Children are 20 of the populationbut they are
100 of the futureGordon Brown, UK, 1999
Target of 25 children out of poverty by 2004
has been met.Institute of Fiscal Studies, UK,
March 2004
UK 1999 commitment to abolish child poverty in
20 yrs
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Working Families

• Face very high effective tax rates
• A 4-child family on over 38,000
• Earns another 1000
• tax 330
• Loss of Family support 300
• Student loan 100
• Retains only 270

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Outcome of 2004 Budget

• Children in poverty must wait until next year
• Significant package 2005-7 but follows years of
  neglect
• Substantial gains for in work families from
  2006
• Inflation- proofing 2008

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To summarise

• Cant rely on economic growth
• Cant rely on provision of work incentives
• Policies like the Child Tax Credit have been a
  failure

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The task ahead

• Provide a child audit of all economic and social
  policy
• Dont expect economic growth or work incentives
  to solve the problem
• Encourage the direction of the budget but as the
  first not last step
• Ask for more immediate action
• Create a climate in which change will be accepted
  and understood
• Support all efforts to redistribute to poor
  families- above all resist tax cuts.