National sneakily reduces child poverty targets

Written By: - Date published: 9:12 am, July 26th, 2024 - 19 comments
Categories: benefits, Carmel Sepuloni, child welfare, Economy, national, poverty, same old national, welfare - Tags:

It has emerged that National has sneakily reduced child poverty targets.

Without any publicity it has posted this Gazette Notice changing three intermediate targets under the Child Poverty Reduction Act 2018.

For the next year the figure for less than 50% of median equivalised Disposable Household Income before deducting housing costs has been increased to 12% from the previous target of 10%.

And the measure of children in material hardship has increased to 11% from 9%.

The figure for less than 50% of median equivalised Disposable Household Income after deducting housing costs has been actually decreased from 15% to 14%. Clearly National believes its rhetoric that giving landlords $3 billion in tax cuts will reduce rental levels.

Minister Louise Upston has used the only response she knows, this is all Labour’s fault. The sneaky way she went about changing the targets suggests that her belief in this is somewhat half hearted.

A historical analysis of what was achieved suggests that Labour achieved gradual but significant improvements until 2023 when inflation clearly placed pressure on household budgets.

Here is the graph. The 2024 figure is National’s target.

National’s goals for material hardship and less than 50% of Disposable Household Income before deducting housing costs are less ambitious than Labour actually achieved in 2022.

It is clear why National has changed the goals. It is an acknowledgement that giving landlords hugh tax cuts has to be paid for some how.

Carmel Sepuloni has been scathing about National’s change. From this press release:

“Officials warned the Government the number of children living in poverty would likely increase by 7,000 in four years as a result of these benefit indexing changes. One estimate predicted that as many as 13,000 extra children would be in poverty by 2028.

“Make no mistake, the Minister for Social Development Louise Upston is well aware of these figures but continues to press on regardless. This underhanded behaviour is what this Government is well known for.

“In Budget 2024 the Government made tax changes knowing that 9,000 beneficiaries would be worse off, did nothing to ease cost-of-living pressure and is letting unemployment continue to rise.

“Increasing wages and benefits are key to lifting children out of poverty. Labour lifted 77,000 children out of poverty between Budgets 2018 and 2023.

“Lifting children out of poverty is the moral obligation of any good government. This one clearly doesn’t have any,” Carmel Sepuloni said.

Tax cuts for landlords and condemning more children into poverty. How very National.

19 comments on “National sneakily reduces child poverty targets ”

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  1. Kay 1
    26 July 2024 at 11:25 am

    Is anyone really surprised?

  2. Patricia Bremner 2
    26 July 2024 at 11:45 am

    No Kay. Sadly, they had already done that going from lunches to bread and snacks, taking work from their parents as well. Just petty and mean all round.

  3. Barfly 3
    26 July 2024 at 11:47 am

    As I have gotten older I find long stayements really challenge my focus and I have come to prefer a more pithy approach maybe something like "Children will go hungry so landlords can profit. This Luxon led government is depraved"

    • joe 3.1
      28 July 2024 at 1:50 pm

      I think that is your problem and not one that is of any interest to the majority on here.
      I like to read a full-blown version even though I am 72+.

  4. tsmithfield 4
    26 July 2024 at 12:11 pm

    Perhaps the restoration of interest deductability (enjoyed by every other business), might be having the desired effect.

    • Barfly 4.1
      26 July 2024 at 12:36 pm

      That's hilarious – personally I'd put that very tiny blip down to the Coalition of Clowns deliberately crashing the economy and pushing outward migration.

      • tsmithfield 4.1.1
        26 July 2024 at 1:13 pm

        Net migration is still overwhelmingly positive, despite the high number leaving. So, that doesn't suit your argument unfortunately.

        • mpledger 4.1.1.1
          26 July 2024 at 3:21 pm

          But we are losing highly skilled workers and gaining lowly skilled itinerant workers.

          • Barfly 4.1.1.1.1
            26 July 2024 at 3:47 pm

            Unsurprisingly lowly skilled imported workers frequently are packed in like sardines

            https://www.rnz.co.nz/news/indonz/505911/migrant-workers-settling-down-slowly-after-struggling-for-months

            Now if you can put 30 people in a house you will need less houses. Is that an economic success story TS?

            • Will 4.1.1.1.1.1
              26 July 2024 at 4:16 pm

              If I read the article correctly, Vinu came to NZ under the AEWV scheme. That scheme was set up by Labour in 2022, and a review (initiated by Andrew Little after whistle blowers exposed the exploitation) found that "it had led to migrants being able to buy jobs, but would be exploited when they arrived. Some workers were not getting paid, and ineligible employers were being granted accreditation." This is not about economic success or failure, but about illegal employer exploitation.

              Accredited Employer visa set for changes 'urgently' – Minister | RNZ News

              Also, Vinu is a welder. I'm not sure that is classified as 'lowly skilled'.

              • Barfly …
                27 July 2024 at 11:35 am

                "Choodal, 36, was one of the 115 workers trapped in six properties across Auckland"

                The point remains if Kiwis are fleeing overseas as their 'occupation' density is far far lower than your replacement immigrants you can create empty houses effectively by 'sardining ' the new immigrants.

                And seriously do you think this doesn't happen currently? This is not an error it is a bloody feature of how these schemes work regardless of who is in government.

                Oh and rent has fallen in Auckland by 0.0%

                • Will …
                  27 July 2024 at 12:15 pm

                  "This is not an error it is a bloody feature of how these schemes work regardless of who is in government."

                  I agree. That's why I made the point that This is not about economic success or failure, but about illegal employer exploitation. It's like most things in life; there will always be some who seek to exploit others for their own gain.

                  Oh and rent has fallen in Auckland by 0.0%

                  I would suggest to you that migrant exploitation is having a miniscule impact on rents. 115 people living in 6 properties is disgusting, but it is statistically insignificant to the number of rental properties and renters across NZ. Rents will fall (or at least increases slow) as the costs of providing rental housing drop and supply increases. Both are currently happening, and so the market delivers.

    • Kay 4.2
      26 July 2024 at 3:41 pm

      My rent has just gone up again. Where can I demand a decrease?

    • SPC 4.3
      26 July 2024 at 5:42 pm

      The high level of consents in 2022 has resulted in a lot of new housing coming onto onto the market.

    • georgecom 4.4
      26 July 2024 at 11:29 pm

      $3 billion tax cuts for a $5 pw reduction in rents

      • PsyclingLeft.Always 4.4.1
        27 July 2024 at 8:36 am

        Aye ! Of course thats all perspective. Luxons lucky landlords (tax breaks, new tenants rules, etc etc ) are surely well up on that deal.

      • joe 4.4.2
        28 July 2024 at 1:52 pm

        I know of no one who has had a reduction recently but, I admit, I do not know every renter in the country.

        • lprent 4.4.2.1
          28 July 2024 at 2:54 pm

          I haven't seen any evidence of rental rates reducing in the economic data. Just as I didn't see any evidence of rental rates rising to cover the costs of taxation on interest. Nor did I see any actual evidence of efforts (ie not just claims that they would) for landlords to exit owning properties.

          What I see is that changes in the government and bank policies about leverage and the rates of interest have had an effect. It makes it harder for investors to use existing ownership of properties to purchase more properties.

          The best data for new rentals being taken is available from MBIE via tenancy services as bonds reflect rental rates.

          It'd be nice if they broke it down by beds. But they don't.
          https://www.tenancy.govt.nz/about-tenancy-services/data-and-statistics/rental-bond-data/

          All that data shows is a continued rapid rise in rental prices across all regions. I can't see any real reductions, even when you factor straight inflation into it. Actual rental rates most likely directly reflect rises in inflation and wage increases to get to a market rate.

          Overall, I think that the economic evidence shows that rentals in a constrained availability are directly reflective of what the market will bear and can pay.

          It has little to no relationship to the costs/returns of being a landlord. It may have some relationship for some small investors who need to top up the difference between interest rate costs and actual returns. But they're a minority in the market anyway.

          Essentially housing in NZ is an has for a long time been run as a ponzi scheme for mining capital gains. In the absence of a increase in affordable housing where it needs to be for employment, it will continue to be so.

          Needless to say National isn't building those anywhere that is at all useful for workers. They're building effectively more housing for property investors to sell to people who are already affluent. That leaves the older properties and apartments to be scooped up by landlords for farming for capital returns.

          Which explains exactly their plans for dismantling Kainga Ora's building programs. Also their de-emphasising of concern on child poverty which is mostly driven by housing and the demands of landlords. I’d expect that their next moves will be to stop measuring things that embarrass them – like child poverty.

  5. adam 5
    26 July 2024 at 2:44 pm

    I would have thought the financialization of tragedy is vulgar enough.