There’s no such thing as ‘child’ poverty
Much has been made of the focus on wellbeing in the latest Government Budget and the $1.1 billion dedicated to ‘‘child poverty’’ measures.
There are many children living in poverty in New Zealand and it is admirable indeed to find ways to increase their living standards, but let’s get one thing straight. The reason children are living in poverty is that their parents, caregivers or wider family are living in poverty.
We don’t have child poverty in New Zealand, we have poverty. The term ‘‘child poverty’’ is a construct of politicians seeking votes and charitable organisations raising funds. Put the word child in front of any cause – child poverty, child cancer, child abuse and so on, and it creates an instant emotional effect leading to support for a cause – either political or charitable.
We have poverty in New Zealand. We have single parents going without the necessities of life for the sake of their children. We have elderly people suffering quietly in their homes, putting on more clothes instead of their heaters, struggling to pay rent, and isolated from their communities. We have people of working age with mental health issues, unable to find employment or support their families.
Focusing on children living in poverty implies that there is an intergenerational cycle – that bringing children out of poverty will ensure they stay out of poverty in adulthood. While there is no doubt some degree of correlation between childhood poverty and poverty in adulthood, it is a nonsense that the majority of adults living in poverty do so because they were impoverished in childhood.
Children live in poverty because the people responsible for their welfare and upbringing are living
in poverty. Getting to the root of poverty is a matter of addressing four key factors – incomes, the cost of housing, the cost of food and mental health. Look at any personal budget and the two biggest expenses by far are housing (rent or mortgage payments, rates and house insurance) and food. This applies to any age group.
In previous generations, the elderly retired with a mortgage-free home and the pension was enough to cover living costs. Nowadays, there is an alarming increase in the number of retirees who are either still paying off a mortgage or renting and, even with accommodation supplements, the pension is just not enough. Solving the housing crisis is vital to stemming poverty. The issue with housing is the cost relative to incomes. The increase in the cost of housing has far exceeded the increase in average wages and benefit payments. Either the cost of housing needs to go down or incomes need to go up to restore standards of living.
Mental health is important for two reasons. Firstly, it impacts on the ability to earn income and secondly, it affects the ability to make sound financial decisions. Mental health issues are a significant cause of overspending, gambling and risk-taking which lead to poor financial outcomes.
Wellbeing requires a certain standard of living but it is much more than being free of poverty.
The OECD has for some years been working on a framework for measuring wellbeing. Within this framework are two key measurement areas – material conditions and quality of life. Measures of income and wealth, jobs and earnings and housing are what determine material conditions, while quality of life is measured by such things as health status, work-life balance, education
Children live in poverty because the people responsible for their welfare and upbringing are living in poverty.
and skills, social connections, environmental quality and personal security. In New Zealand, Treasury is working on a framework for measuring wellbeing, based largely on the OECD framework.
It’s all very well to measure wellbeing. It’s another thing to improve it. There is a limit to what central government can achieve simply by allocating more money for health, education, housing and so on.
Other countries are succeeding with what is called a collective impact approach, whereby organisations in the public, private and not-for-profit sectors work collectively and systemically towards shared objectives of reducing poverty and increasing wellbeing.
Much of the impetus for change needs to come from the grass-roots level – from local communities. The Tamarack Institute based in Canada is a catalyst in advancing community-led change in North America and collaborates with Inspiring Communities in New Zealand, who provide training, support and resources to bring about community-led change.
There is no question that reducing poverty and increasing wellbeing require systemic change. But let’s be clear, we need to change the focus from child poverty to wellbeing for all New Zealanders.
Liz Koh is an authorised financial adviser and author of Your Money Personality: Unlock the Secret to a Rich and Happy Life, Awa Press. The advice given here is general and does not constitute specific advice to any person. A disclosure statement can be obtained free of charge by calling 0800 273 847.