With so much going this week I’m going to hold the final chapter of the OCC 2012 report over for next week, and focus on current events.
Firstly, of course, the budget. After widely signaling action on child poverty, nothing of any significance happened in the budget. Community groups responded:
Child poverty groups in Christchurch are describing the Budget as empty and a missed opportunity.
Non-government organisations, charities and community groups accused the Government of ignoring the issue of child poverty.
The group Community Campaign for Food in Schools are disappointed that Finance Minister Bill English did not announce on Thursday the provision of breakfasts for children in low-decile schools.
Representatives from a range of non-government organisations gathered in Christchurch on Friday to discuss whether it did enough to tackle child poverty.
The Methodist Mission’s chief executive, Mary Richardson, does not think so: she says the Government’s focus in Christchurch is clearly on rebuilding the city, rather than on families. “We’ve prioritised the establishment of a commercial centre over people’s homes and we’ve thought the economic recovery is about the recovery of business as opposed to economic recovery of families and households. “We still have families living in garages, living in cars, sharing facilities which are overcrowded.”
A senior lecturer in political science at the University of Canterbury also attended the meeting and says child poverty wasn’t even considered in the Budget. …
Every Child Counts manager Deborah Morris-Travers says … “We are really facing a crisis of child poverty,” she says, “when we’ve got a quarter of the nation’s children living in poverty. Some of our neediest families are not accessing the support that they need, and we need some transparency around the take-up rates of benefits and tax credits.” …
A 37-year-old mother of five in Porirua, Tinaka Harrison, says a lot of families she knows are struggling to survive. “There isn’t enough money so they can’t afford to turn on the heater and have a warm house,” she says, “then the kids get sick because it’s cold and they can’t afford to feed them well-balanced nutritional foods.” Mrs Harrison says children are going without food and families are living together to save money. A Porirua schoolteacher who wishes to be known only as Laura says she sees children coming to school hungry. …
Mana Movement leader Hone Harawira, who is trying to secure support for a bill on the provision of food in decile 1 and 2 schools, says the Budget ignores child poverty altogether. … He added: “Given all the positive comments from the Prime Minister over the past few days, and the Maori Party bragging about how hard they’re fighting for the poor, I am bitterly disappointed to see that this Budget has set aside not one cent to deal with child poverty.”
The 2013 Budget has singularly failed to even consider questions of child poverty. The Minister of Finance remains convinced that the only way to lift vulnerable families out of poverty is through paid employment yet he fails to take account of Treasury’s predictions that the labour market will be subdued over the next three or four years. As the economy moves past recession and as Government finances improve there may be scope to consider what new spending priorities might be feasible. Regrettably this Budget does not consider such challenges.
Expenditure on education over the four years between 2013/14 and 2016/17 is expected to grow by just 2.1% in nominal terms to $12.6 billion. If Treasury’s inflation forecasts prove correct this minimal growth in expenditure will represent a real reduction in value of around 6%.
Taking account of expected inflation and population growth, the forecast increase in spending on health looks more modest however. Figure 3 illustrates the real per capita spend on public health since 2008 and includes forecasts offered in the 2013 Budget. In per capita terms spending peaks during 2013/14 at around $3,150 per person but under the scenario offered in the Budget this spend quickly falls away to around $2750 by 2016/17. This is the lowest per capita spend since 2007
The 2013 Budget is the first to budget for the new working age benefits resulting from the Government’s benefit reform programme. These new benefits are the Supported Living Payment, the Sole Parent Support and the Jobseeker Support . Treasury’s estimates of the number of people receiving these new benefits are similar to those presently receiving the older style benefits. It seems likely then that real value of these new benefits will fall with inflation given that total spend is changing very little
Despite its pre-Budget rhetoric there is very little additional money in the 2013 Budget to address housing supply problems. The new initiatives announced in the budget are relatively very minor in budget terms amounting to $102 million over four years.
The 2013 Budget does not address some serious underlying economic and demographic pressures such as those around an aging population alongside youth marginalisation and a growing current account deficit and rising foreign debt alongside a re-inflating housing bubble. Expecting budgets to do all of this is perhaps unfair although there are no signs of any political will to do so at present.
Particularly noticeable by its absence (after hints and teases in the lead up to the budget) was any move to address the thousands of kids are going to school hungry – an issue so ably championed by Mana’s “Feed the Kids” campaign. Why was there no announcement? Key is insisting that it wasn’t pulled from the budget, and that an announcement is due within 2 weeks. Why the delay?
Somehow Campbell live already has the details (video link) (the programme builds on the “Kickstart Breakfasts” scheme already run by Fontera and Sanitarium). It will cost $5 Million and provide breakfasts (wheetbix and milk) every day for every pupil at Decile 1 – 4 schools. After covering the details, Campbell Live looks at the politics of the delayed announcement. A good piece on an issue that this show has been consistently strong on, bravo. Why doesn’t our media do more of this?
A second topic today, CPAG’s court case on the In Work Tax Credit. Recall this announcement from July last year:
CPAG Granted Leave To Appeal High Court Decision On Discrimination Claim Against Children Of Beneficiaries
The Child Poverty Action Group is very pleased the Court of Appeal has today granted leave to appeal against the decision of the High Court in relation to its claim of discrimination against the 230,000 children of beneficiaries. The claim relates to the In Work Tax Credit which is part of Working for Families, a package that has a key aim to alleviate child poverty.
Spokesperson Susan St John said, “Children whose parents are on benefits are excluded from this child payment. The parent may have illness, disability or caring responsibilities or be unemployed because of the recession or earthquake. The In Work Tax Credit provides significant weekly financial support to families with children ($60 for the first 3 children plus $15 for each child thereafter). This support has been denied to children living in all beneficiary families and many are in serious hardship.”
From the latter page:
As Kiwis we like to think of New Zealand as egalitarian, fair and a great place to raise a family. However in comparison to many other developed countries, we have a highly discriminatory welfare and tax system when it comes to children. For example, in Australia, all low income children are treated the same – they receive the same levels of child-related family assistance no matter if their parents are in work or not. This is not the case in New Zealand.
CPAG has been concerned about the impact of such discriminatory policies on child poverty since they were first introduced in 1996. In particular, the misleadingly named “In Work” Tax Credit (IWTC) has been the focus of a long standing court case taken by CPAG against the Government. CPAG has long argued that there are better ways of creating an incentive to work that do not discriminate against children. Not only does it seriously disadvantage children of beneficiaries but it has adverse consequences for New Zealand society as a whole.
I’ll follow up on the hearing in a future edition of Poverty Watch.
Here’s the standard footnote. Poverty (and inequality) were falling (albeit too slowly) under the last Labour government. Now they are on the rise again, in fact a Waikato University professor says that poverty is our biggest growth industry.
Before the last election Labour called for a cross party working group on poverty. Key turned the offer down. Report after report after report has condemned the rate of poverty in this country, and called on the government to act. Meanwhile 40,000 kids are fed by charities and up to 80,000 are going to school hungry. National has responded with complete denial of the issues, saying that the government is already doing enough to help families feed their kids. Organisations working with the poor say that Key is in poverty ‘la la land’.
The Nats refuse to even measure the problem (though they certainly believe in measurement and goals when it suits them to bash beneficiaries). In a 2012 summary of the government’s targets and goals John Armstrong wrote: “Glaringly absent is a target for reducing child poverty”…
The costs of child poverty are in the range of $6-8 Billion per year, but the Nats refuse to spend the $2 Billion that would be needed to really make a difference. Even in purely economic terms National’s attitude makes no sense.