Ignoring child poverty won't make it go away | The Jackal

24 Sep 2012

Ignoring child poverty won't make it go away

Unless you're an Ostrich with your head firmly buried in the sand, you'll be aware that New Zealand has a pervasive and growing poverty problem that is largely being ignored by the current government.

This is particularly concerning in terms of the start a child gets in life, with childhood poverty having a significant detrimental impact on society estimated to be in the billions of dollars.

The real unfortunate thing is that instead of recognizing the problem and doing something proactive about it, many on the right-wing are rubbishing the statistics and trying their hardest to ignore the many thousands of New Zealand children who are trapped in poverty.

Yesterday, the NZ Herald reported:

Children must rely totally on parents and caregivers. On their own, they're destitute.

And yet we have a report boldly titled Child Poverty. That tugs at the heartstrings and makes great newspaper copy but it's wrong. The report should properly be titled family or household poverty.

Actually the report is called 'Left Further Behind: how policies fail the poorest children in New Zealand' (PDF). It talks about household incomes, but focuses on the issue of child poverty. The fact that low household income causes childhood poverty is really a no-brainer. Hide's not going to let the facts get in the way of his propaganda though...

But even that's misleading. The 270,000 "child poverty" figure refers to relative poverty. Your children suffer in "poverty" if your household's net income is less than 60 per cent of your equivalent household's median income. The cut-off income for a couple with four children is just over $1000 a week. Net.

It should come as no surprise that Rodney Hide is entirely wrong! The median household income calculation is done before housing costs (BHC) while the 60% moving line concerns after housing costs (AHC). This is important because of our overpriced rental accommodation in New Zealand, which reached a peak of 50% of household median incomes in the late 1990's.

Rent in comparison to median income is calculated at just under 25% by CPAG, when in fact it's currently 33%. This is important because 70% of poor children live in rental accommodation. Any increase in overal rental costs has a greater impact on the poor and unfortunately, since 2007, rental prices have increased at a faster rate than property values.

If the median income is $1000, the amount of disposable income AHC for the example impoverished household will be 60% of $670 per week. Anybody who can bring up four children on $452 per week with housing costs of 25% deserves an award... On $402 per week with housing costs of 33% they deserve more money... But of course that solution is far too simple for the likes of Rodney Hide.

The reality of the situation makes Hide's pontification about there not being a child poverty issue feckless! One can only assume that Hide is either seriously stupid or he's promoting disinformation because he's a sadist who doesn't care about the harm impoverished children suffer.

It's no wonder that one child in four lives in "poverty" - $1000 a week in the hand is well above any lack of comfort let alone starvation. But for the experts, that's "poverty".

Except it's not $1000 per week in the hand, the calculation is 60% of the median household income (approximately $1289 in 2011) After bloody housing costs. It appears that Hide doesn't know what AHC means or is simply making shit up.

Even with the median at $1289, according to the 60% moving line measure with rent at 25% or $322 per week, a household is classified as impoverished when disposable income is $556 or less per week (not $1000). That's almost half the amount Hide is trying to sell to the public.

When you apply the more strict 50% line measure, 170,000 of children are found to be living in serious hardship, hence the no school lunches that was reported by Campbell Live last week. That's what the ignoramus Hide is trying but failing to respond to.

A windfall that doubled all incomes wouldn't budge the child "poverty" figure. There would still be 270,000 poverty-stricken children. That's because experts define "poverty" in reference to the middle income.

Wrong again Hide... Here's what the CPAG report states:

Between 2004 and 2007 the numbers declined on all measures and that can be attributed to the effect of Working for Families. Since then, relative poverty has increased while the numbers under the fixed line have fallen slightly. The latest figures for 2010 are based on incomes in 2009 and do not reflect the effects of the tax changes in 2010, nor the full impact of the recession, or the Canterbury earthquakes.

Interesting that the amount of childhood poverty has increased at the same time rents started to increase dramatically. The other sad fact is that the 270,000 children living in poverty, according to the 60% AHC moving line measure, is based on income figures from 2009, and the problem is likely to have gotten a lot worse since then. In fact the Ministry of Social Development recently reported that median household incomes fell by 3% in 2011 for the first time since the early 1990's.

In my opinion it's a complete travesty that in such a plentiful country the amount of impoverished children is at epidemic levels and growing. With the right-wing's reluctance to even accept there's a problem, it's likely there will need to be a change in government before anything is done... Meanwhile the children continue to suffer.