The Minister of Finance visited his local soup kitchen one night last month, and tweeted “Good to catch up with folk I worked with/helped over the years+remember how important it is to give every helping hand we can”. But are Grant Robertson and his colleagues giving enough of a helping hand to those in poverty?
Yesterday’s Political Roundup column looked at the very poor state that the country is currently in with inequality and deprivation – see: How rotten is New Zealand?. The question is whether the Government is doing enough, and what is holding them back from doing more.
Big changes needed say advocates on poverty
The person leading the fight for the Government to do more is the Children’s Commissioner, Judge Andrew Becroft, who has been in the media saying that it’s time for a series of “big, bold” and permanent initiatives such as raising benefit levels. He recently asked: “Why didn’t Grant Robertson spend some of the $12 billion on children and families instead of infrastructure?”
Becroft also went on TVNZ’s Q+A programme recently and accused the Government of being “weak, supine and passive” in the face of overwhelming evidence for the need to make immediate and substantive moves to fix poverty – see 1News’ Children’s Commissioner urges Govt to take action on child poverty – ‘We’ve got the money, now’s the time’.Becroft says the Government simply has to spend more money where it is needed, arguing “we’ve got the money, it’s in the piggy bank, it’s a rainy day – now’s the time to spend it – on children”. And he rejects calls for patience, saying “We can’t fiddle, as it were, while Rome burns. While 100,000 children remain in disadvantage… Change and action is urgently required”.
For more detail on some of the Children’s Commissioner’s concrete suggestions for the Government, see RNZ’s Child poverty: Commissioner says need for housing, income levels to improve. In this, Becroft says “I want to see family incomes dramatically raised by increasing benefits and making the minimum wage a living wage… And the government needs to move much faster at increasing the supply of social housing – building, buying and repurposing – and working closely with community-based housing providers.”
Although the Government have made some useful moves to deal with poverty, Becroft labels them “a fantastic start”, but a “band-aid”. He suggests enduring and transformative change is necessary: “we need to see significant and permanent changes to unlock opportunities for those doing it hardest. One-offs aren’t going to cut it anymore.” Other suggestions include: “free lunches rolled out across more schools, free dental and mental care through to ages 18 or 21.”
Similarly, long-time public policy expert, Victoria University of Wellington’s Jonathan Boston wrote last week that although the Government “has embarked upon some important social reforms”, “Modest adjustments to current policy settings, however welcome, will be insufficient. Transformative change is needed” – see: We need a step change to transform the welfare state.
Boston says, “all is not well with New Zealand’s welfare state” explaining, that “For the most vulnerable people, the welfare state is not delivering an adequate income, accessible public services or even a safe place to sleep.”
Other voices have been an important part of the debate – especially the Child Poverty Action Group, which has reacted to last week’s $12 billion spending announcement, saying the “plans don’t reflect the urgent welfare reforms needed” – see: Evidence of poverty relief lacking in 2020 Budget Policy Statement.
Spokesperson and University of Auckland economist, Susan St John, says “What is urgently needed is a significant increase across all benefits, higher abatement thresholds for earned income, and immediate policy changes to Working for Families”. She also criticises the Government’s Winter Energy Payment, which she costs at $2.4 billion over five years, as being “ill-focused” saying that this year it was provided to nearly 780,000 superannuitants, regardless of their need, and suggests it should instead be “turned into a permanent increase to core benefits”.
St John’s analysis is also reported in a very good article by Sarah Robson, which asks: “What happened to the Coalition government’s promise to overhaul the welfare system and lift families out of poverty?” – see: Solo mums on benefits having to decide between food and fuel.
St John looks at the very few changes that have been enacted as a result of the Welfare Expert Advisory Group, and says “Those two changes are simply completely insufficient as a response”.
The article explains that precious little has come of the report: “Its 200-page report concluded the welfare system was no longer fit-for-purpose and needed fundamental change. It made 42 recommendations. Implementing all of them would come with a price tag of just over $5 billion. So far, the government has adopted just three.”
However, the article reports Social Development Minister Carmel Sepuloni promising that more reform is indeed coming, and she “expects to be taking a three to five year plan for the overhaul of the welfare system to cabinet before the end of the year.”
Sepuloni, doesn’t appear keen to increase benefit levels, however – which was one of the core recommendations of her working group: “She’s defended the decision not to introduce a general increase to benefit levels, saying the previous government’s $25 one-off increase in 2015 was lost with the rising cost of housing.”
For more on this, see Thomas Manch’s Substantial benefit hikes appear off the Government’s agenda. This reports on the Minister addressing a Child Poverty Action Group forum, where she implied there might be some big movements in next year’s Budget: “Excuse me if I haven’t come with all the answers to the short term action you’d like to hear about… Much of what you wanted to hear today … that is the stuff that is budget sensitive”. And in general, she asked them to have “trust in the coalition Government”.
What the Government has already done
Prime Minister Jacinda Ardern campaigned in 2017 on dealing with child poverty, took on the portfolio of Child Poverty Reduction, and then promised that 2019 would be her “Year of Delivery”. She is now being called to account for whether enough is being done.
Ardern answered some of these questions on TVNZ’s Q+A recently, saying she rejects the criticism from the Children’s Commissioner: “the Government has done some ‘significant’ and ‘enormous’ investment into the incomes of families with children in the greatest need” – see 1News’ Jacinda Ardern rejects criticism from Children’s Commissioner over Govt’s response to Welfare Expert Advisory Group.
The PM also stated: “Are we perfect? No. Do we have more to do? Yes. But I do not accept that what we have done has not been significant. It has”. According to this report, she also rejected the statement of the head of Christchurch’s City Mission who told Q+A that his organisation “was underfunded, better off under a National government and that poverty has worsened.”
The Government has some statistics on its side, with the release of a report last month showing that its 2018 Families Package was making a real difference – see Yvette McCullough’s Government quotes welfare stats after child poverty inaction accusations. Carmel Sepuloni is quoted saying “By the time the Families Package is fully rolled out in 2020/21 – 385,000 families with children will be better off by an average of $75 a week.”
Sepuloni also went on TVNZ’s Breakfast to point out the Government was therefore on target to meet their child poverty reduction targets – see 1News’ Government’s $5.5b Families Package on track to lift 74,000 children out of poverty – report.
Universal benefit for kids
If the Government is to do more for children in poverty, an increasingly popular suggestion is the resurrection of the old “family benefit” for families with children, which was abolished in 1991. There are various ways that cash payments could be assigned to children, as explained by Susan Edmunds – see: ‘Pension’ for kids could level income inequality between young and old.
In this, economist Shamubeel Eaqub is reported as saying that “the experience of superannuation showed that a universal payment was an effective way to reduce poverty in a swathe of the population. Doing the same for children would have the same effect, he said”. He is quoted saying: “Would it cost a lot of money? Yes. Would it provide lots of benefits? Yes”.
There are various ways to distribute the money – it could be universal, or targeted. Researcher Jess Berentson-Shaw is cited as proposing a highly-targeted version, while Eaqub favours universalism, albeit paid for by the means-testing of superannuation: “If I had my way you’d take it away from the decrepit old folk and give it to the young ones. Make super means-tested and a benefit for children unconditional. Older people don’t need it, they have money.”
Another advocate, Lana Hart, proposes a “universal child benefit of $60 a week for every child up to the age of 17”, which would cost $3.8 billion a year, and in “one single, bold stroke, we could take the biggest bite yet out of New Zealand’s child poverty problem” – see: Time to make significant inroads into child poverty.
Hart says the Government just needs to be courageous in adopting such a programme that is already relatively popular: “There’s plenty of public backing for the schemes that France, Ireland, Sweden and other countries have already adopted. In 2017, a survey asked New Zealanders if they would support or oppose a basic income payment of $60 per week to all 1.22 million Kiwi kids. More than half (55 per cent) said they would support it and only one in five New Zealanders surveyed said no.”
Also making the case for payments to children, economist and leader of TOP, Geoff Simmons writes today: “All children under three should get $200 a week, no questions asked. We give our elderly an unconditional benefit, so why not our youngest citizens? Currently the group with the highest rates of poverty in New Zealand is families with children” – see: Means-testing pension to free up money for young Kiwis should be a no-brainer.
Simmons also advocates finding the money through cuts to Superannuation. However, it’s worth noting Jonathan Boston’s arguments in his opinion piece that the use of highly-targeted approaches to welfare have reduced public support for such programmes. He advocates less means-testing, saying “Exclusion invariably breeds discontent and overrides compassion.”
Finally, there’s now a scheme for wealthy superannuants to give money to those in need, and for the cartoon explanation of this, see Toby Morris’ The Good Life: How superannuants can change NZ’s inequality story.