All young families should receive $200 weekly payment Gareth Morgan says in new book

Aspiring politician Gareth Morgan has co-authored a book proposing all families raising a child under 3 years old should receive an unconditional cash payment of $200 a week. Photo/ Nick Reed

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 co-authored by aspiring politician Gareth Morgan.

Morgan, who announced his entry into politics last September with The Opportunities 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-strings-attached 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 Berentson-Shaw 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 hours and casualised labour in the job market.

The authors considered the effectiveness and cost-effectiveness of a large number of popular 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 and nurses in schools, additional cash for families with children, compulsory employment programmes for parents and more.

"Nothing was as powerful in improving lives and preventing negative outcomes for children, as unconditional cash benefits," they said.

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

"Yet achieving a thriving, inclusive, and fair New Zealand is what many of us genuinely want no matter where on the political spectrum we sit."

Moving parents into work was only a viable solution once children were older and when the work was rewarding and adequately paid; and work-focused solutions for parents of young children should be de-prioritised, they said.

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 of such a package would net New Zealand a $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 other commercial water users.