Child poverty plan and budget both AWOL
Senior associate at the Institute for Governance and Policy Studies, Victoria University of Wellington.
No plan, and no budget: that’s the public state of the prime minister’s much-touted drive to slash child poverty rates in a decade, according to documents released to me under the Official Information Act. I acknowledge, of course, the progress thus far. One of Jacinda Ardern’s first steps on taking power was to bring in the $5.5 billion Families Package, which raised government payments to nearly 400,000 families by $75 a week each. She has also lifted benefits by $25 a week and ensured they will always keep pace with wages.
Under Ardern, child poverty has fallen on every measure, improving the lives of thousands of families. Take, for instance, the proportion of children living in households with less than half the typical income, the point at which basic necessities become severely unaffordable. That figure has fallen from 16.5 per cent to 14.6 per cent, lifting 16,000 children out of poverty.
This solid achievement had put the Government on track to meet its short-term 2020-21 targets. But coronavirus may have derailed that train. And the long-term targets for 2027-28 are extraordinarily ambitious. They require poverty rates to be slashed by two-thirds, falling from 16.5 per cent to just 5 per cent on the above measure.
To free 130,000 children from poverty would be an historic, world-leading achievement. But to get there, the Government will need at least two things: a plan and a budget.
I don’t expect them to know all the details yet, or give away their hand. But I do expect them to have scoped out the options, to have calculated that increasing benefits by $100 a week would lift so many thousand children out of poverty, and so on. If they’d done that, they’d also have a budget, an idea of how much that whole plan would cost.
Of course such calculations are hard to do, and always approximate. But without them, we simply can’t assess whether the prime minister’s pledge to slash child poverty is credible or not.
So I asked the Government for those two things, the plan and the budget. The response? They don’t exist. ‘‘No specific document precisely matches your specific request,’’ the Department for Prime Minister and Cabinet told me. In the documents they did release, Child Poverty Unit officials offer to help the prime minister establish ‘‘an agreed whole-of-government work programme for reducing child poverty’’. The plan is yet to be written, then.
Of a budget there is no sign whatsoever. Perhaps more work is going on behind the scenes. But as it stands, there is no budget or plan publicly available, for one of this Government’s core missions, four years into its term.
Some might ask: does this matter? Can’t the Government just make changes ad hoc?
Not so, for several reasons. Coronavirus has made things much harder. And to make continuous inroads into the poverty numbers, the Government will have to lift families experiencing everdeeper poverty and ever-greater forms of dysfunction. That will take careful, coordinated effort.
It will also be expensive. The documents released to me argue that ‘‘substantial income support packages’’ – that is, benefit and tax credit rises – ‘‘are likely to be required every few years’’. Most experts think it will cost billions of dollars annually to meet the targets.
This presents a colossal challenge for a Government that has shied away from every major tax-raising proposal. There appears, at first glance, a nasty contradiction between the Government’s stated aims and its likely inability to raise the money required.
So we need Ardern to tell us exactly how she will meet her long-term targets, how much it will cost, and where those funds will be found.
The issue also cuts to the heart of her Government’s credibility. Bear in mind that Ardern made herself minister for child poverty reduction. It’s not that she doesn’t care. Nor is she a lightweight: she knows the subject inside and out, diligently reading – I’m told – even the driest of technical papers.
The lack of political courage to raise taxes is a greater problem. So too is the inability to drive change from the centre. More than most governments, this one seems to struggle to identify key aims and force the public service to achieve them.
In the documents released to me, the Child Poverty Unit – which numbers just four full-time staff – notes the need to ‘‘ensur[e] other ministers and agencies are clear about the role … they play in delivering on the government’s commitments in this area’’. I suspect this is code for, ‘‘Ministers aren’t taking the targets seriously enough.’’
I write all this not in anger but in fear – fear that the Government simply doesn’t grasp how big a task it has set itself. Ardern has some immediate opportunities to convince us all otherwise: a Budget next month, an announcement on new child poverty targets for 2024 the month after.
But if her plans remain opaque, the doubts will only grow.
More than most governments, this one seems to struggle to identify key aims and force the public service to achieve them.