Fam­ily ben­e­fits set to hit high­est in 37 years

Herald on Sunday - - THIS WEEK - By Si­mon Collins

Wel­fare ben­e­fits for fam­i­lies with chil­dren are set to rise to their high­est rates in real terms for at least 37 years, as the new Labour Gov­ern­ment acts against child poverty.

A Her­ald on Sun­day anal­y­sis of the fam­ily pack­ages of­fered by Labour and Na­tional in the elec­tion has found both par­ties would have fi­nally re­stored the real value of ben­e­fits to where they were be­fore the 1991 ben­e­fit cuts.

Chil­dren’s Com­mis­sioner Judge Andrew Be­croft is now call­ing for a for­mal cross-party ac­cord, sim­i­lar to the 1993 su­per­an­nu­a­tion ac­cord, to com­mit to long-term tar­gets to re­duce child poverty based on the promises both par­ties have made.

“It would be ter­rific for New Zealand chil­dren if the is­sue of child wellbeing was taken out of pol­i­tics.”

Be­croft was “ready, will­ing and avail­able” to bro­ker cross-party talks if asked.

The num­ber of chil­dren in poverty, mea­sured by those in house­holds earn­ing be­low half the me­dian net house­hold in­come af­ter hous­ing costs, more than dou­bled from 7 per cent in 1990 to 17 per cent in 1992, and was still 17 per cent last year.

Ben­e­fi­cia­ries’ in­comes have been raised in real terms twice since the 1991 ben­e­fit cuts — by Michael Cullen’s Work­ing for Fam­i­lies pack­age in 2005, and by Bill English’s $25-a-week in­crease in all ben­e­fits for chil­dren from April last year.

But cur­rent ben­e­fits and fam­ily tax cred­its for a sole par­ent with two chil­dren un­der 12 are still about $30 a week be­low what they were be­fore the 1991 cuts in real terms.

On top of that, hous­ing costs have dou­bled to a half of af­ter-tax in­comes of the poor­est fifth of work­ing-age house­holds since the late 1980s.

Na­tional’s tax cuts pack­age in its 2017 Bud­get would have lifted fam­ily tax cred­its for a sole par­ent with two chil­dren un­der 12 by $36 a week from next April, fi­nally sur­pass­ing pre-1991 lev­els for the first time.

Labour has said it will can­cel the tax cuts and use the money partly to add an­other $11 to the fam­ily tax credit for a first child on top of Na­tional’s $36 in­crease, and pay all ben­e­fi­cia­ries a $700 win­ter en­ergy pay­ment.

This means that sole par­ent ben­e­fi­cia­ries with two chil­dren un­der 12 will get more in real terms than at any time since at least 1980.

How­ever ben­e­fits are still much lower rel­a­tive to av­er­age wages than in the 1980s, be­cause ben­e­fits have been in­dexed to con­sumer prices which have risen less than wages.

And that’s be­fore al­low­ing for hous­ing costs. Both par­ties have promised iden­ti­cal in­creases in ac­com­mo­da­tion sup­ple­ments from next April that will only partly ease the pain.

Prime Min­is­ter Jacinda Ardern has per­son­ally taken a new port­fo­lio of Min­is­ter for Child Poverty Re­duc­tion and promised a bill to set child poverty re­duc­tion tar­gets within her first 100 days in of­fice — by Fe­bru­ary 2.

Na­tional op­posed set­ting tar­gets while in Gov­ern­ment, but English said in a tele­vised de­bate with Ardern on Septem­ber 4 that his 2017 Bud­get would lift 50,000 chil­dren above the poverty line and added: “If we can get elected, within two or three years we can have a crack at the next 50,000 chil­dren, get­ting them out of poverty.”

An end to child poverty? p20-21

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