Measuring child poverty rates no simple task

As one of her Government’s earliest acts, Prime Minister Jacinda Ardern brought in the Child Poverty Act in 2018. It established ways of measuring poverty and laid out a series of targets against them.

There are three primary measures of poverty in the act, two of which are income based.

For these income measures, a mathematical model is used to ‘‘equivalise’’, or flatten, the incomes of different households.

This allows a consistent measure to be applied across households of all different sizes. Larger households need more income to manage than smaller households do. As a result, there is no specific income figure under which all households are said to be living in poverty.

However, the Government’s first measure for child poverty does say that a child is living in poverty if they’re in a home with an income less than half the average, equivalised disposable household income, before housing costs are deducted. (The average disposable household income, before housing costs, is $46,700 a year, according to Stats NZ).

What do the numbers look like using this measure?

Ardern set a 2020/21 target of lifting 70,000 children above this line. That would mean shrinking the 2018 measure of 16.5 per cent of children to 10 per cent.

As of June 2019, the latest available figures, this measure was down by only 1.6 percentage points to 14.9 per cent. Instead of 183,500 children in poverty, there were 168,500.

There is another, similar sort of measure. Again, a child is considered in poverty if they’re in a home with an income less than half the average, equivalised disposable household income, but this time after housing costs are deducted. (The average disposable housing income after housing costs is $35,800 a year).

The 253,800 impoverished children first counted by this measure in 2018 reduced 2 percentage points in the year to June 2019, to 235,400 children.

A third measure defines a child as impoverished if they live in a home lacking six or more key indicators, such as the ability to see a doctor, or to pay power bills.

On this measure, the number of children in poverty increased by 4100 in the year to June 2019, up 0.4 percentage points to 13.4 per cent. Due to the data lag, it’s hard to know how recent events have affected our poorest children.

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