Covid-19 deals big blow to reducing child poverty in NZ

Source: 1News

The Covid-19 economic shock has dealt a blow to the Prime Minister’s mission to reduce child poverty, with 70,000 more children expected to plunge into poverty due to the crisis.

That would bring the number of children living in poverty in New Zealand to at least 300,000 according to the Child Poverty Action Group (CPAG), which crunched the numbers.

It’s the first snap shot of the damage Covid-19 could do to children on the breadline.

One measure of poverty is a household living off less than 50 per cent of the median income after housing is paid for. This is the measure the CPAG based its assessment on.

During the global financial crisis of more than a decade ago about 350,000 children were living in poverty.

The expected 70,000 increase represents about 6.5 per cent of children.

The CPAG report said it’s driven by growing unemployment and the inadequacy of core benefit payments.

Unemployment is currently at 4.2 per cent but Treasury has forecast it could peak at 9 per cent later this year.

Lucy Shah Mohamady from the Community Service Connect Trust helps support struggling families.

We met her as she was loading up van of necessities for a woman left jobless by Covid and with two children to support. She said the children didn’t have beds.

“She's done her budget and she's left with 38 dollars a week for food,” said Ms Mohamady.

The CPAG is urging the Government to boost benefits and expand the in-work tax credit so that beneficiaries can also receive it. It said that would add about $70 a week to trhe pockets of beneficiaries.

"She's [Jacinda Ardern] created enormous political capital in the last few months. We would be very keen to see her put some of that on the table now, with really shifting benefit rates and then making a real impact on child poverty numbers," said CPAG’s Mike O’Brien.

Pre-lockdown, the Government increased all main benefits by $25 a week and doubled the winter energy payment.

But CPAG research has found most beneficiaries with children are living about $110 a week below the poverty line.

Ms Ardern said seven out of nine of the poverty indicators has improved under her watch.

“We know there is more work to do we want to be in the position to keep doing it," she said.