A poor start: addressing child poverty

Jean Simpson, director of the New Zealand Child and Youth Epidemiology Service, University of Otago.
Jean Simpson, director of the New Zealand Child and Youth Epidemiology Service, University of Otago.
Tracey England (43), of South Dunedin, is concerned a lack of money means her son cannot...
Tracey England (43), of South Dunedin, is concerned a lack of money means her son cannot participate in normal teenage activities. Photo by Craig Baxter.
Behind on electricity payments and unable to afford a warrant of fitness for her car, Kylie...
Behind on electricity payments and unable to afford a warrant of fitness for her car, Kylie Foxton-Smith (37) worries what the remaining winter months will hold for her and her family. Photo by Bruce Munro.

Poverty affects up to a quarter of all children in New Zealand, researcher Simon Chapple says. Is this the one issue which - because of its complexity, because it will take time, money and consensus to tackle, because it is so unbelievably prevalent - is fast becoming our greatest, not-so-hidden, national shame? Bruce Munro investigates.

On Friday, Tracey England sold her car to buy groceries.

It was a simple matter of necessity. When you are on your own, and your son's uncontrolled diabetes makes full-time work impossible, you do the maths and then you do what you have to.

Miss England's welfare benefit and her teenager's sickness allowance add up to $468 a week.

On the other side of the ledger, rent for the two-bedroom, back end of a South Dunedin villa costs $230 a week; power, insurance, a dentist's bill and other fixed costs swallow most of the rest; leaving about $60 for food, clothing, doctor's visits and transport.

Which, of course, is not nearly enough.

To try to bridge the gap, Miss England (43) does casual work at Forsyth Barr Stadium. But when there is no work for a few weeks, you still have to eat.

So she sold her car, for $550. As is, where is, because she had not been able to afford the registration or warrant of fitness for the past couple of months.

''I'm running out of things to sell when I'm in [a hole],'' she jokes, sitting at one end of a couch in a spartan, unheated living room, her hands cradling a hot cup of tea in a pink mug emblazoned with the words ''The Queen of ****ing Everything''.

She is not complaining. Others are much worse off than her and her son, Miss England reckons.

At least her son's school fees and uniform costs are taken care of, courtesy of her former husband's father who does not want his grandson teased for lack of the necessities, she says.

It is a positive way of thinking. Perhaps the sort of flying-in-the-face-of-evidence attitude you have to adopt to get through.

But criteria used by the Ministry of Social Development to measure child hardship (see graphic) puts her son firmly in the child poverty camp.

Purchases are often delayed, she says.

''I can't afford to buy him clothes. He has one pair of pants to get him through winter.''

Hanging behind his door are no clothes suitable for special occasions.

He does have one pair of shoes other than school shoes, but they were bought using birthday money he was given.

Miss England has used a foodbank four times in the past year.

''But we try to get by without that. I don't like to take.''

And at Christmas, for the first time since her marriage ended seven years ago, she borrowed some money to get through.

''We hadn't had Christmas celebrations since 2007. No presents, nothing. It [borrowing money] was worth the smile on his face.''

Outside of school hours, her son does not play sports or belong to any clubs.

''He wanted to play soccer. He's also asked to join an art club and do karate.

"He'd love to do this and that. But he can't, simply because there isn't the money. So he sits at home instead and reads.''

Alone in his room, but far from alone in being impoverished.

Simon Chapple, co-author of a new book, Child Poverty in New Zealand, says it is a large and often downplayed crisis that needs considered but urgent action.

The University of Otago senior research fellow in the Department of Social and Preventive Medicine says between 130,000 and 285,000 New Zealand children are living in poverty; up to one-quarter of all New Zealanders under 18 years old.

The higher of the two estimates results from taking housing costs into account; an important factor given the impact housing has on children's wellbeing, Wellington-based Dr Chapple says.

NO matter which poverty threshold is used, the numbers surged higher in February when Statistics New Zealand and Treasury admitted errors had understated the number of children in poverty.

As of March 1, between 15,000 and 40,000 more children were in poverty than previously believed.

What fascinated and disturbed Dr Chapple was Treasury's assertion the revised figures did not warrant a change in its policy advice to the Government.

''That's a hell of a lot more poor kids than we used to think,'' he says.

''How much bigger does that figure have to go before we start taking it seriously?''

But poverty is relative. Only having one pair of shoes, putting up with a cold house and rarely eating fresh fruit or vegetables is not that bad compared with what some children face in other countries, right?

That is just the point, Dr Chapple says.

''Poverty is a relative phenomenon. It's about having sufficient income to fully participate in a way that is considered acceptable in the society that you live in. It's about including people.''

Take, for example, the seemingly insignificant issue of tradeable picture cards.

''The kids at my local school have these ... [supermarket] cards. You get one for every $20 you spend,'' he says.

''It's fine for my kids because I spend money there. But I can quite imagine kids from a council house going along to school and having nothing to swap with the other kids, nothing to talk about in the playground that all the other kids are talking about. They are excluded.''

Persistent childhood poverty also has a big bearing on what happens during adulthood, he says.

Children growing up poor are more likely to have health problems later on, they are more prone to get involved in crime, and they have a greater chance of being in low-paying jobs or dependent on welfare.

Each of those has implications, not just for the individual, but for government budgets, economic productivity and social cohesion.

And the same arguments apply in Otago, Dr Chapple says. Childhood poverty may be greater elsewhere in New Zealand, but the exact number of poor children in Otago is unknown.

Older housing stock and colder weather also means Otago's poor children face some hardships not faced further north.

''And no man is an island,'' he says.

''Otago people are linked to other provincial residents and to the rest of the country.''

Child Poverty in New Zealand offers some controversial suggestions as to what could be done if New Zealand was to stop taking sideways glances at child poverty and instead look squarely at the problem.

It is co-written by Jonathan Boston, who is director of governance and policy studies, Victoria University.

In writing the book, Dr Chapple has drawn on his experience as a Reserve Bank economist, co-author of the first OECD report on child wellbeing in developed countries, and as a researcher for the Family Commission's 2011 Expert Advisory Group on Child Poverty (EAG).

His firm view is that focusing effort and resources on getting poor parents into full-time employment is better than trying to increase wages. It is likely to generate fierce debate, particularly among the left-leaning end of the political continuum.

''It will be very controversial,'' he agrees.

But it is simply what the research reveals, he adds.

''The modelling work that we did showed that if you worked full-time, even if you were on the minimum wage, providing you got your full entitlements to payments and the accommodation supplement, it would be sufficient to shift most families with children over even the highest poverty threshold.''

Substantially raising the minimum wage, however, could do more damage than good, Dr Chapple asserts.

In New Zealand, the minimum wage is already high relative to median wages, both in comparison with other OECD countries and compared to historic ratios in this country.

The bulk of a minimum wage rise would disappear in a puff of tax and reduced benefit entitlements. And minimum wage rises also result in the loss of some jobs, he says.

''The evidence is that this disemployment effect is not very large. But the problem is, once you move outside the bounds of your historical experience, the predictions get much more unreliable. So any time you raise the minimum wage, you are rolling the dice on the jobs of the least advantaged.''

The prospect of a living wage, an increase of nearly a third for those on the minimum wage, would be ''a bloody big roll of the dice'', Dr Chapple says.

''So there is a really important question here for people who favour raising the minimum wage. Are you happy rolling the dice on those people?''

Getting people into full-time employment, however, is predicated on there being enough suitable jobs in the first place. Dr Chapple argues it is achievable if it is made a priority.

''Some jobs are already there, and the aim is for people on a benefit to find them quicker. Others will be created via a more productive workforce and by enhancing demand through subsidies.''

An idea the political right could have trouble swallowing is a universal child payment made to all parents with children under a certain age. Such a payment would help children in poverty.

Making it universal would dissuade future governments from tampering with the payment lest they face the wrath of middle-class voters enjoying its benefits.

A universal child payment makes sense for many of the same reasons New Zealanders support universal national superannuation, Dr Chapple says.

''We need ... to build a tax income support system which gives children the same levels of dignity and low levels of poverty that we think is right and just, and which older people have in New Zealand.''

When the EAG proposed such a payment in 2010, Prime Minister John Key labelled it a ''dopey idea''.

Then last year, Mr Key gave an impassioned defence of superannuation, using many of the same arguments used by proponents of the child payment, Dr Chapple said.

''I'd say, `Great, John. All those reasons also apply to the same idea for children. Is it really so dopey after all?'.''

A spokeswoman for Mr Key said national superannuation was universal for good reasons. Other ''cash transfers'' such as the accommodation supplement and Working for Families were targeted ''to ensure help is going to those who genuinely need it'', she said.

Other poverty-busting suggestions include a capital gains tax to make buying a house more affordable; an in-work payment to encourage beneficiaries into employment; and a Child, Parent and Family Service addressing families' social, psychological and economic needs.

Tackling child poverty head-on would cost serious money; between $1 billion and $2 billion, the researchers estimate.

It would require an integrated approach and would take time. But it would be worth it, Dr Chapple says. An obvious example is the cost of incarcerating prisoners, he says.

''If you can divert one kid from a life of crime, there will be a direct fiscal saving of $100,000 a year from not going to prison.''

Dealing with child poverty would mean ''fewer children who grow up with a poor education; children whose bodies and minds are healthy, with everything that means for future costs in terms of the health system and their ability to support themselves as adults''.

''We would have a generation better able to generate the incomes to pay for the retirements of us ageing baby-boomers.''

But that sort of long-term thinking is not natural to politicians with one eye always on the next election, operating in a system which favours simplistic put-downs over evidence-based consensus.

What is needed, argues Dr Chapple, is a mechanism to ''incentivise'' governments to get serious about child poverty for the foreseeable future; a lever such as a Child Poverty Act, which would require Government to measure, target and report on child poverty.

It is an idea which has strong support from Jean Simpson, who is director of the New Zealand Child and Youth Epidemiology Service, University of Otago.

The service wrote the technical report used in last year's inaugural Child Poverty Monitor, co-produced by the university, the children's commissioner and the J. R. McKenzie Trust.

''Legislation would be most effective in addressing child poverty if it has the mandate to ensure a positive impact for the children and their families in areas such as housing, employment, education, health [physically and emotionally], justice, and social support,'' Dr Simpson says.

''Regardless of where you live in New Zealand, child poverty is an indictment. It simply should not be happening in a rich nation such as New Zealand.''

It will not be until a majority of voters feel as strongly about the problem that politicians are likely to saddle themselves with anything like a Child Poverty Act.

Public concern about child poverty is increasing.

A nationwide UMR Research survey conducted last year showed in the past decade the percentage of people who wanted all New Zealanders to have greater income equality increased from 21% to 31%.

And a Colmar Brunton poll in February showed child poverty was among the top five issues for voters.

There is still a way to go before public outcry reaches a volume capable of triggering systemic change.

Dr Chapple hopes his book will contribute to that process by opening the eyes of open-minded people.

In Dunedin's hillside suburb of Wakari is an ordinary looking two-storey four-bedroomed brick house.

It is home to Kylie Foxton-Smith, her husband and their three children. Mr Foxton-Smith has terminal cancer. Mrs Foxton-Smith lost her job last year.

Their youngest is losing her sight to a rare eye condition. Almost half the family's welfare-derived income goes on rent.

When other bills are paid they have $260 a week for food, clothing, transport and other incidentals.

More than $700 is owing in unpaid electricity bills. The children do not go to the movies, the public swimming pool, or into town for the occasional fast-food treat with friends.

''They understand. But it doesn't make it any easier for them,'' Mrs Foxton-Smith says.

Most people are probably rubbing shoulders with child poverty every day through school, family or community interactions, Dr Chapple says.

But it requires eyes that see the reality plus the conviction to change it.

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