Family breakdowns and decreasing marriage rates are costing taxpayers $1 billion a year, a New Zealand Institute of Economic Research (NZIER) report released today says.
The report -- The Value of Family: Fiscal Benefits of Marriage and Reducing Family Breakdown in New Zealand -- was commissioned by political lobby group Family First.
Family First national director Bob McCoskrie said family breakdown and decreasing marriage rates were barely registering a mention or policy in the election campaign.
"Yet this report makes it quite clear that the strengthening marriage and reducing family breakdown is a significant public concern, both in human costs and economically," he said.
The report, by senior economist Patrick Nolan, found a small reduction in family breakdown or increase in the marriage rate "could provide significant savings for taxpayers".
The report found:
* the marriage rate had been declining steadily since 1971 when it was around 46 marriages per 1000 unmarried people older than 16, to 2007 (14 per 1000);
* the teenage birthrate was high by OECD standards, particularly for young Maori and Pacifika women. Having children young interrupted education, reduced earning potential, and cut career prospects;
* in 2006, 30 percent of all families were sole parents with dependent children -- the group that research showed had the lowest average living standards of all economic family unit types;
* tax-benefit programmes created "marriage penalties" -- where people were discouraged from marrying by the system -- or poverty traps, where benefits and benefit clawbacks mean there are "few or no financial incentives" to enter or remain in work, or increase hours of work or wage rates.
Dr Nolan said that while divorce could help avoid high conflict situations, international research said it did carry costs.
Among those costs were increased risks of poverty, mental illness, infant mortality, physical illness, juvenile delinquency and adult criminality, sexual abuse and other forms family violence, economic hardship, substance abuse, and educational failure.
That led to increased costs to the taxpayer, through the increasing number of people in need of programmes such as income assistance, and tax money being spent on fighting crime and poor health outcomes.
Dr Nolan based his figures on expenditure in the 2008 Budget. His assumptions deliberately understated the taxpayer cost of family breakdown, he said.
Annual costs to the taxpayer in his cheapest scenario were: Social Development ($406 million); Working for Families Tax Credits ($290m); Health ($121m); Justice ($6m); Corrections ($38m); Police ($41m); Housing ($34m).
Dr Nolan said there was a need for further research into:
* the relationship between changes in poverty breakdown and decreasing marriage rates, and poverty among families with children;
* the relationship between changes in poverty rates and levels of government expenditure in a range of policy areas.
Despite that, the magnitude of costs indicated a small reduction in family breakdown and increases in marriage rates could "provide significant savings for taxpayers", he said.
