Child poverty rates unknown as targets about to become law

Jacinda Ardern's Child Poverty Reduction Bill has passed its second reading - but her statisticians can't say what the current child poverty rate is. Photo / Mark Mitchell

Child poverty rates for the past two years have been wiped because of a survey mishap, just as targets for reducing the rates are about to become law.

The Ministry of Social Development (MSD) has decided not to publish child poverty rates for 2016 or 2017, saying there appear to have been unusually low response rates by low-income households with children which have skewed the results.

The decision comes as Prime Minister Jacinda Ardern's signature Child Poverty Reduction Bill, which requires the Government to set targets to reduce the child poverty rate, passed its second reading in Parliament today.

The bill has been endorsed by the National Party, making it certain to pass into law.

Family First director Bob McCoskrie, who revealed the ministry's decision not to publish the latest statistics today, said the statistical uncertainty made the targets "meaningless".

"We are trying to solve a problem that we are struggling to define," he said.

"If we can't identify the actual issue with accuracy and certainty, then it makes it very difficult to determine solutions to a problem when you can't actually specify it."

Bob McCoskrie says the lack of base data on child poverty makes the Government's targets "meaningless". Photo / File

MSD's annual household income reports show that the proportion of children living in households earning below half of the median household income per person after housing costs doubled from 12 per cent in 1986 to a peak of 24 per cent in 2001, and then declined only slightly to 21 per cent in 2015.

Raw data from Statistics NZ household surveys show that this child poverty rate dropped to around 19 per cent in 2016 and 2017 - apparently lifting about 20,000 children out of poverty.

Ardern's target is to reduce this child poverty rate by 4 percentage points - about 40,000 children - by 2020-21.

A spokeswoman for Ardern said the base to calculate the 4 per cent reduction would be data for the year to June 2018, which is due to be released next February in the first of a series of annual child poverty reports required under the new law.

The new reports will be published by Statistics NZ, not MSD.

MSD says the apparent undercount of low-income families in the 2016 and 2017 surveys is due to including only 3500 households in the surveys. Statistics NZ has been given extra funding to expand the sample size to 20,000 households from July this year.

"Our child poverty reduction programme is on track with cross-party support," Ardern's spokeswoman said.

"Under the bill, the Government will use child poverty rates published early next year as the benchmark for progress on child poverty reduction. These will be based on improved data methodology published by Statistics NZ."

Jacinda Ardern has set targets for reducing child poverty, but statisticians say the current child poverty rate is unknown because of a low response rate in the latest surveys. Photo / Mark Mitchell

The MSD reports also measure "material hardship", defined as households with at least five out of 13 hardship items such as not being able to keep the home warm, not being able to afford meat or fish at least every second day, and falling behind on power bills, rent or mortgage payments.

These items have only been measured since 2007. Children in material hardship on this measure increased from 16 per cent in 2007-08 to 20 per cent in 2011 after the global financial crisis, and dropped back to 14 per cent by 2015.

MSD's raw data shows a dramatic further drop to only 9 per cent in 2016 and 2017 - a bigger fall than Ardern's target of a reduction of 3 percentage points by 2020-21.

However, MSD has told Social Development Minister Carmel Sepuloni in a briefing note that "there were no economic, housing market or policy changes that were strong enough to explain the declines".

The raw data for children also showed different patterns from households without children, whose poverty rates actually increased slightly in 2016 and 2017. Their material hardship rates fell "a little", in line with the improving economy, but not as dramatically as the apparent child hardship rates.

Judge Andrew Becroft is "disappointed and concerned" at the lack of statistics on child poverty this year. Photo / File

Children's Commissioner Judge Andrew Becroft, whose office publishes an annual Child Poverty Monitor, said there was "no question that poverty continues to be a persistently harsh reality for too many young New Zealanders".

"The indicators we have followed in recent years show little sign of a significant increase or decrease," he said.

"While we are, of course, disappointed and concerned at the lack of statistics being released this year, we look forward to robust and comprehensive figures from the government in the future."