Child poverty has dropped back almost to pre-recession
levels, as New Zealanders' jobs and incomes finally climb out
of a five-year downturn.
The Ministry of Social Development's latest annual report on
household incomes says the number of children in households
earning below 60 per cent of the median wage fell by 25,000
to 260,000 last year, the lowest number since 2007 when there
were 240,000 children in poverty.
The overall inequality rate measured by the Gini coefficient
widened slightly, but the data has been volatile through the
recession and the ministry said the trend line had been flat
since the mid-1990s after a sharp increase in inequality in
the decade before that.
However, beneficiaries slipped further behind average incomes
because benefits are adjusted in line with prices, not
incomes, so inequality worsened at the bottom of the income
"While there is no evidence of growing income inequality in
the population overall or between high income households and
the rest in the last two decades or so, there is evidence
here that there is a growing gap between the incomes of those
heavily reliant on the safety net provided by main
working-age benefits and the rest," the report says.
"Housing costs accounted on average for a much greater
proportion of household income for low-income households in
2013 than in the 1980s. This increased cancelled out the
gains in before-housing-costs incomes for low-income
households, leaving after-housing-costs incomes for bottom
decile households lower in real terms in 2013 than in the
1980s, and much the same for those in the second decile."
Social Development Minister Paula Bennett said the figures
showed that Kiwi households had bounced back from the
"In the past year 84,000 more jobs have been added to the New
Zealand economy, 8,600 sole parents have come off benefit in
the past year and there are nearly 30,000 fewer children in
benefit dependent households compared to two years ago," she
"Nevertheless the Government recognises more needs to be done
to support our most vulnerable families. Which is why, on top
of free breakfasts to all schools that want it, a social
worker in all decile 1-3 schools and warming up nearly
300,000 homes, we are in this year's budget investing nearly
$500 million over four years in services and support for
But Unicef advocacy manager Deborah Morris-Travers said
poverty rates were still much higher for children (22 per
cent) than for any other age group, measured by those below
60 per cent of 2007 median incomes in 2013. Comparable rates
for other age groups were 17 per cent for young adults aged
18 to 24, 16 per cent aged 25 to 44, 13 per cent aged 45 to
64 and 7 per cent aged 65 and over.
"Given what we know about the importance of a child's
development when they are young, this failure to protect
children from the harms of poverty is a costly mistake," she
The report effectively reverses an unexpected increase in
child poverty reported in February, when officials discovered
a mistake in previously reported data which pushed the number
of children below the 60 per cent line up from 265,000 to
The latest report confirms that children in poverty peaked at
300,000 in 2010 and has now fallen back two-thirds of the way
to the 2007 level of 240,000.
The proportion of children in beneficiary families who earned
below 60 per cent of the 2007 median dropped from 75 per cent
in 2012 to 65 per cent last year as some beneficiaries found
The proportion of children in working families below the same
threshold was stable at 12 per cent.
On the same basis, child poverty rates dropped for most
ethnic groups: from 17 per cent to 15 per cent for European
children and from 34 per cent to 30 per cent for both Maori
and Pacific. There was a slight rise in poverty from 27 per
cent to 28 per cent for Asian and other ethnic groups.
- By Simon Collins of the NZ Herald