Cost of living, inflation push more children into poverty

Tens of thousands more children are living in poverty, a backwards slide reflecting the cost of living crisis and high inflation, new data shows.

Stats NZ data for the year to June 2023 shows an increase in child poverty rates in two out of three primary measures compared to June 2022.

The most commonly referred to measure — 'children living in material hardship' — jumped from 10.5% to 12.5%. That's one-in-eight children, or 143,700, living in material hardship compared to 120,300 in June 2022. It marks a decline to levels last seen in 2019.

A child is in material hardship if they go without at least six essentials, including fresh fruit and vegetables, heating and regular doctors visits.

For Māori children, one-in-five or 21.5% were living in material hardship, with no statistically significant change compared with 2019.

On the measure of children living in households with less than 50% of the median income after housing costs, there was a 3% increase to 17.5%, that's 202,100 children or one-in-six. It's the worst rate since 2019.

On the other key measure of children in households with less than 50% of the median income before housing costs, there was no statistical change — 12.6% of children lived in such households, or 146,000.

It's the fifth year of reporting of statistics since the Child Poverty Act came into force in 2018.

Child Poverty Reduction Minister Louise Upston said the worsening child poverty rates support the coalition government's focus on reducing the cost of living and getting people into work.

"This government has inherited major challenges, and it's clear a new approach is needed to addressing child poverty," Upston said.

"Supporting parents into paid work and breaking the shackles of welfare dependency will be the cornerstone of this government's strategy for lifting families out of hardship and reducing child poverty rates.

"We also plan to lift the incomes of working households experiencing hardship by providing tax relief, easing mortgage pain, unlocking housing supply, making childcare more affordable, and lifting skills and education to provide our children with greater opportunities," she said.

"We've already committed to increasing the Working for Families In-Work Tax Credit from next year, putting up to $25 more per week into the pockets of low-and-middle-income working families. This tax credit hasn't gone up since the National Government increased it in 2015.

"We're also bringing in our FamilyBoost childcare tax rebate, which is expected to help 130,000 low-and-middle-income families keep more of what they earn, with up to $75 more in their after-tax pay each week.

"This government is committed to bringing down the cost of living and helping lift more families and their children out of hardship."

Responding to the findings, Chief Children's Commissioner Claire Achmad said "concerted and urgent action" is needed.

She zeroed in on the situation for Māori, Pacific and disabled children.

"This latest official data shows that a continued focus on reducing poverty must be an ongoing project of national significance — our nation's children are rightly asking us to prioritise action to end poverty, and it is possible," she said.

"Every child is born with incredible potential, but right now, far too many children's dreams are sadly only for the simplest things.

"Every child in Aotearoa New Zealand should be able to dream bigger than this, rather than have the ceiling closing in on their potential because of poverty."

Achmad said there were increases across three of the nine official measures of child poverty.

"I'm very concerned that we are seeing rates of child poverty increasing for the first time since 2018.

"At a time when the cost of living combined with low-wage work and inadequate benefits is pushing families to breaking point, we must see the Government investing in those most in need, so their children can thrive in ways that are consistent with their rights as children.

"As a relatively small, wealthy country, it's not good enough to see our progress to reduce poverty taking a backward step."

KidsCan said the worsening child poverty shows urgent government action is needed.

"We're deeply concerned, but sadly not surprised by these figures. The cost-of-living crisis is having a devastating impact on children's lives."

KidsCan's chief executive Julie Chapman said that in a recent survey of its partner schools, KidsCan asked if poverty was improving or worsening in their communities.

"Sixty-five per cent of the 347 schools who responded said it was getting worse. Fifteen per cent said it was static. Just 6% thought it was improving.

"Hundreds of teachers shared stories of worsening poverty, reporting students surviving on instant noodles, siblings sharing uniforms and shoes, and petrol costs affecting attendance."

She said unaffordable housing was also a major factor, with schools reporting children growing up in motels, tents, and overcrowded homes.

"Housing costs are consuming far too much of people's meagre incomes, forcing families to work multiple jobs to put food on the table. And it's not just parents working — it’s their children too. It comes at the expense of their education, and that's not something we should accept," Chapman said.

Forty-seven KidsCan partner schools reported students who had taken on part-time jobs to help their families survive, or left school altogether to work.

"We want to see housing become much more affordable, and we must wrap support around children so they can stay in school. Education is their pathway out of poverty," Chapman said.

Child Poverty Action Group (CPAG) spokesperson associate professor Mike O'Brien said a lack of discussion about child poverty from the new government is "concerning".

"The government has obligations, enshrined in law, to reduce the number of children who are living in hardship and this data should be of huge concern to all New Zealanders.

"Decisions taken by the coalition government so far, including indexing benefits to inflation, is one example of how policy will lock even more children into a cycle of poverty."

Salvation Army concerned about 'blaming narrative'

The Salvation Army said it is concerned that a blaming narrative around those on the lowest incomes — along with current policies being enacted — is not helpful for those experiencing hardship and can increase their distress.

"Historically, such narratives have been accompanied by increases in child poverty and hardship," the Salvation Army's Ian Hutson said.

"The Salvation Army welcomes the Minister for Child Poverty Reduction Louise Upston's reaffirming the Government's commitment to child poverty reduction targets.

"We call on the Government to set out in detail how they plan to achieve further reductions in child poverty. Such a plan needs to ensure all households with children have an adequate income, regardless of the employment status of the adults in the household. This means ensuring welfare payments deliver liveable incomes, as well as finding proactive ways to get those who can into work that is stable, with income that can sustain the family."

Hutson also remarked headwinds such as the increasing cost of living are making it more difficult for people to afford essentials like food and rent.

"This is reflected in the child poverty statistics released today, such as the increase in material hardship."