Poverty Reduction Continues Despite Challenges

  • Hon Jan Tinetti
  • 77,000 fewer children living in low income households on the after-housing-costs primary measure since Labour took office
  • Eight of the nine child poverty measures have seen a statistically significant reduction since 2018. All nine have reduced
  • 28,700 fewer children experiencing material hardship since 2018

Measures taken by the Government during the COVID-19 pandemic and resulting economic shock have avoided more children falling into poverty according to official statistics released today.

"Despite the most challenging economic conditions in a generation or more, actions taken by the Government have ensured that New Zealand children have not fallen backwards," Minister for Child Poverty Reduction Jan Tinetti said.

"It's a challenging environment but child poverty figures staying steady this year is encouraging. It shows the Government's policies targeting kids and families are helping, despite the pandemic and tough economic times.

"Programmes like the COVID-19 Wage Subsidy Scheme, the doubling of Winter Energy payments and increases to Working for Families and benefit levels have ensured child poverty rates have continued to track down.

"The extensive package of income and other supports put in place since the start of the COVID-19 pandemic, as well as a very effective public health response, have helped avoid the big increases in child poverty rates in 2021/22 that some feared and expected.

"We know families are doing it tough right now. But the changes we have implemented over the past five years to support families such as our $5.5 billion Families Package, successive main benefit increases, minimum wage increases, Working for Families increases, and the implementation of our Healthy School Lunches programme are really helping at the moment.

"In spite of the economic challenges we are continuing to move towards our poverty reduction goals. Across the three primary measures, we are closer to both the intermediate and 10-year child poverty targets than reported last year.

"We are starting to see the longer term benefits to the changes we have implemented over the last five years since taking office. Reducing child poverty will take time, but the evidence shows we are moving in the right direction.

"The fact that eight out of nine child poverty measures have seen a statistically significant decrease since 2018 shows the effectiveness of the measures we have put in place to support families over several years. Last year, there were only five measures that had moved a statistically significant amount.

The Stats NZ 2021/22 data shows some statistically significant signs of improvement in poverty rates for some population groups.

  • There are 15,700 fewer tamariki Māori living in poverty on the after-housing-costs primary poverty measure compared to 2018/19
  • There are 20,700 fewer children impacted by disability living in poverty on the after-housing costs primary poverty measure compared to 2019/20).

However, as in previous years, disparities continue to be evident for Māori and Pacific children, and children impacted by disability, compared to New Zealand children overall.

"We know that there's more work to do to achieve our target of more than halving child poverty within 10 years - and we're absolutely committed to doing so, "Jan Tinetti said.

"Looking ahead, the Government's biggest priority is to support New Zealanders facing cost-of-living pressures - particularly low-income households and those affected by Cyclone Gabrielle and recent flooding.

"The bread-and-butter package of support announced last week will be critical in helping approximately 1.4 million people with the cost of living. Families are also benefiting from earlier measures including the extension of half-price fares on public transport, fuel tax cuts, and minimum wage increases.

"There is still so much more to do and the Government won't let up on our goals of reducing child poverty," Jan Tinetti said.

Editor's note

The full release by Stats NZ today is available at https://www.stats.govt.nz/

Stats NZ has released guidance for interpreting whether the child poverty targets have been met here. This year isn't a year when the three-year targets are assessed. The Government met two of the three child poverty targets for the first intermediate target period set out in the Child Poverty Reduction Act last year.

The child poverty data released today is drawn from the 2021/22 Household Economic Survey and covers annual incomes across a reference period from mid-2020 to mid-2022. This means that the reporting includes the significant impacts of COVID-19, along with impacts from more recent global cost-of-living pressures and the Government's policies in response. Stats NZ advises that this year's rates are subject to greater uncertainty due to a much smaller sample size than normal - just under 9,000 households, rather than the targeted 20,000. Data collection was disrupted as a result of COVID-19 lockdowns and restrictions.

Stats NZ also advises that the disruption doesn't affect the quality of the 2021/22 data for child poverty reporting under the Child Poverty Reduction Act 2018 (the Act). However, users should note that the reduction in sample size means that the statistics are subject to higher sampling error. Caution is advised when interpreting statistics for subpopulations, where the sampling error and risk of bias are higher.

The reporting for 202122 does not yet include the impact from initiatives announced in Budget 2022 and subsequently (eg, the child support pass-on and the $350 cost-of-living payment).

Key actions the Government has taken to help reduce child poverty since Labour took office

    • $5.5 billion Families Package increased financial support for low-income families, including increases to the Family Tax credit, Accommodation Supplement changes, and the introduction of the Best Start Payment and Winter Energy Payment
    • Indexation of main benefits to average wage growth for the first time in New Zealand's history
    • Successive increases to main benefit rates. Most recently, lifting the main benefits by 7.22% in line with inflation, meaning a family on a benefit with children will receive an extra $40.86 a week and a sole parent will receive an extra $31.83 a week from 1 April 2023
    • The largest increase in abatement levels in over two decades, increasing the amount beneficiaries can earn before their benefit reduces
    • Lifts to the minimum wage, from $15.75 in 2017 to $22.70 an hour from 1 April 2023
    • $2.8 billion COVID income support package, which permanently increased benefits by $25 per week, doubled the Winter Energy Payment for 2020, and broadened eligibility for the In-Work Tax Credit
    • The COVID Income Relief Payment (June 2020 to February 2021) and the residential rental freeze (March to September 2020)
    • Introduced a suite of improvements to WFF, that will increase the incomes of 346,000 families by an average of $20 a week from April 2022
    • Introduced indexation of Childcare Assistance income thresholds, so they increase every year in line with wage increases, as well as a further increase to the thresholds that will come into effect from 1 April this year
    • Introduced measures to stop predatory lending that often impact low-income families
    • Expanded school-based health services and making doctors' visits free for children under 14
    • Reduced education costs, by removal of NCEA fees, and increased funding so parents of Decile 1-7 schools don't have to pay school donations
    • Improved the quality of housing and conditions for renters by implementing the Healthy Homes Guarantee Act 2017 and through changes to the Residential Tenancies Act 1986
    • Expanded free healthy lunches in schools to over 220,000 children by August 2022
    • Rolled out free period products for all students across New Zealand.
    • Delivered more public housing, with over 18,000 places due by 2024 through the public housing build programme
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