Morgan’s $ 200 plan for young families

Paying parents more effective than current policies, book claims

Payments of $ 200 a week to all New Zealand families raising a child under three and additional payments for low- income families are among proposals to tackle poverty in a book coauthored by aspiring politician Gareth Morgan.

Morgan, who announced his entry into politics last September with The Opportunity Party, said giving people more money was not only the most obvious way to help families, it was also the most effective.

In Pennies from Heaven, due out in March and co- authored by science researcher Jess Berentson- Shaw, it’s argued new ideas were needed to create a fairer country for all Kiwis.

Low- income families weren’t the problem, Berentson- Shaw told the Weekend Herald, the problem was the stress caused by being poor.

“We’re conditioned to think people on low incomes are there because of some kind of personal failing,” she said.

“What I’m trying to emphasise is this isn’t about low- income families, it’s about all families and what happens to us when we end up poor.”

Scientific research showed financial stress narrowed people’s cognitive abilities to make decisions and parental stress could also affect children’s brain development, she said.

Families were more than their financial struggles, she and Morgan said, and policy should trust low- income parents to make their own decisions for their families while giving them the financial resources to be able to make good ones.

They proposed unconditional cash benefits would be more effective at helping low- income families than current social policies.

The concept of a no- stringsattached cash injection into families’ weekly budgets aimed to remove the stressful, punitive conditions attached to the claiming of current benefits, which Berentson- Shaw said “cancelled out” the stress- relieving benefits of increased income.

A $ 200 a week “thriving child” universal payment for all families with a child under 3 years old was one of the book’s core proposals.

Morgan, a vocal supporter of a Universal Basic Income ( UBI), likened the payment to a “child UBI”.

UBIs work in a similar way to superannuation, giving unconditional amounts of money to all citizens on a regular basis.

The “thriving child” payment would recognise the financial strain having children can put on families, with more than half of Kiwi families suffering income poverty after having children, Morgan and BerentsonShaw said.

An additional basic income for lower- income families extending the current Working for Families in- work tax credit of $ 72.50 a week was also proposed.

It would remove the need for parents to work 30 hours a week ( 20 hours for single parent households) in the face of increasingly unstable job hours and casualised labour.

The authors considered the effectiveness and cost- effectiveness of a large number of interventions on improving children’s wellbeing before coming up with the proposal.

These included intensive in- home pre- schooling, parental training, housing interventions, in- kind services such as food in schools, additional cash for families with children, compulsory employment programmes for parents and more.

Morgan and Berentson- Shaw acknowledged some people might find the idea of giving low- income families with young children unconditional cash “challenging”.

Moving parents into work was only a viable solution once children were older and when the work was rewarding and adequately paid.

They calculated a “gold standard package” delivering free universal early childhood education, increased childcare subsidies for low- income parents for under- 3- year- olds, the “thriving child UBI” and a basic income for low- income families would cost roughly $ 3.3 billion per year.

However positive social outcomes as a result would give New Zealand a net $ 1.9b gain, they said. Free early childhood education was also a policy put forward by The Opportunity Party, announced on Monday.

Other party policies proposed by Morgan included increasing taxes for the wealthy with a home ownership tax aimed at reducing property speculation and a pollution tax for farmers and commercial water users.