Report chronicles NZ's rising tide of poverty

The Ministry of Social Development report found a rising number of people living without comforts most take for granted. Picture / Amos Chapple

Close to two-thirds of beneficiary families with children are suffering severe or significant hardship - a 20 per cent increase in four years, a Ministry of Social Development report has found.

Beneficiary families with children account for about 10 per cent of the population, which means about a quarter of a million people in those families fall into this category.

More Auckland families face hardship than those in other regions and Pacific Island, Maori and sole parents are also disproportionately affected.

Critics say the findings highlight the flaws in the Government's Working for Families package, which focused on improving the lot of low-income working families as an incentive to encourage people into work.

National welfare spokeswoman Judith Collins said the research was an embarrassment for Labour which "wrongly claims to be a champion of the poor".

The Living Standards report, released yesterday, measures a snapshot of conditions in 2004 and compares them to 2000 research.

It finds three in four New Zealanders reported a fairly comfortable to very good living standard. Overall living standards changed very little over the four years.

However, it shows that disparities have increased between groups with high and low living standards.

The report also finds that sole parents, those reliant on income-test benefits and large families, have lower living standards than in 2000.

It finds 8 per cent of the population reported being in "severe hardship" - the most extreme category - up from 5 per cent in 2000.

There has been a particularly sharp increase in the number of beneficiary families with children suffering hardship.

The 23 per cent of people on benefits without children reporting severe or significant hardship in 2000 rose to 25 per cent in 2004. But 61 per cent of beneficiaries with children reported severe or significant hardship problems in 2004 - up from 41 per cent in 2000.

The number of those families reporting severe hardship jumped from 21 to 34 per cent over that time.

Overall 10 per cent of Aucklanders reported severe hardship - double the number reporting it in 2000 and several percentage points more than in other identified regions.

Pacific families reported the worst hardship among ethnic groups and the most significant decrease in living standards, followed by Maori.

Of all Pacific families, 27 per cent reported suffering severe hardship.

The figure for Maori was 17 per cent and Europeans 4 per cent.

The report found that although income levels played a significant role in determining people's living standards, there were other relevant factors.

Superannuitants, for example, often received similar incomes to beneficiaries, but reported much higher living standards, partly because they had higher levels of home ownership, more assets and sometimes more education.

The ministry's deputy chief executive of social policy Marcel Lauziere said the research confirmed the value of Working for Families, which largely began taking effect last year.

The package had "already addressed factors that contributed to the decrease in living standards, particularly for beneficiary families, and we expect to see the benefits in future research", he said.

His claim was disputed by a number of groups.

Child Poverty Action Group economics spokeswoman Susan St John said the report showed the proportion of all children in hardship had increased from 18 to 26 per cent.

The Working for Families package had prioritised working families, meaning "many of our poorest families are being left behind".

The Government increased Family Support payments for beneficiary families as part of the package, but had removed other income, leaving many with little extra money, she said.

Because the payments had not been inflation indexed, per-child payments were worth less than in the late 1990s.

Maori Party co-leader Tariana Turia agreed the report revealed the discriminatory impact of the Working for Families package.

It was a "tragic indictment on the focus of this Labour Government ... which talks about supporting families, and yet punishes those who are already hurt most by economic hardship".

Salvation Army social policy director Major Campbell Roberts said the report confirmed there was "inadequate support" for some households.

Benefit levels had to be reviewed, he said.

The National Distribution Union said that the report showed the effects of anti-union and anti-beneficiary legislation from the 1990s and confirmed the need for a $12 minimum wage.


HOW LIVING STANDARDS ARE CALCULATED

* The report uses seven categories from "severe hardship" to "very good".

* It assesses a series of "basics" lacked because of cost and what comforts/luxuries people had.

* People judged in severe hardship lacked an average 39 per cent of basics.

* People in that category experienced at least some of the following: no telephone, no washing machine, less than required fresh fruit and veges, no heating in main rooms, postponed doctor's visits, did not have good shoes or a winter coat, relied on gifts for clothes.


HARDSHIP: CASE STUDY

MSD picture of a person suffering severe hardship:

Catherine is a single mother on the DPB with an 8-year-old son renting privately.

She often goes without fresh fruit and vegetables, buys second-hand clothes. Can't afford contents insurance or buy the new glasses she needs.

She has no secure locks on doors and can't afford Christmas presents for her parents.

She's sometimes unable to pay her power bill on time, is behind on her rent and sometimes late with hire purchase payments.

The house has several maintenance issues and though she can adequately feed and clothe her son, she can't afford the cost of allowing him to bring friends home overnight. She recently had to cancel plans for his birthday party - all of which she finds very distressing.