Jenesa Jeram: Goals are easy - reducing hardship is tough part

The Children's Commissioner, Andrew Becroft, recommended the Government adopt a material deprivation measure with 17 criteria. Photo / Steven McNicholl

Opinion

As countless others have pointed out, this Government is no stranger to setting targets. Looking to the future, possums, stoats and smokers will be out. Higher immunisation rates and better educational achievement are in. The Government has hardly shied away from difficult policy areas. So why is it dragging its feet on child poverty?

Voices in support of setting a target to reduce poverty have risen to a crescendo these past couple of weeks. Opposition parties, the Children's Commissioner and Unicef are pressuring the Government to establish an official poverty definition.

The Prime Minister responded arguing that choosing a single measure of poverty is difficult. There are many ways of measuring poverty, and it is hard to get people to agree on just one. Advocates of an official measure retort that actually, it is rather easy.

And they are right. If push comes to shove, choosing a poverty measure isn't the hard part. If the Government wanted to, it could even choose a bundle of measures.

But setting targets will not do anything to reduce actual child hardship. Ever heard of the phrase hitting the target but missing the point? Any choice of measure restricts the kinds of policies that the Government could introduce to address poverty. It all sounds a bit wonkish, but that's what you get when you're working with official definitions and targets.

The Children's Commissioner, Andrew Becroft, recommended the Government adopt a material deprivation measure with 17 criteria. He is referring to the DEP-17 Index, developed and used by the Ministry of Social Development.

But even if all political parties were to agree on that measure, we still wouldn't know how many children are living in poverty today. The Ministry of Social Development's latest report said you cannot use the measure to definitively put a number on how many people are in poverty. In fact, it didn't even set a threshold for what constitutes hardship as poverty is not binary.

In any case, the index gives no guidance for how to tackle poverty. Material deprivation measures are composed of things that households might have to cut back on, or go without completely. The DEP-17 criteria includes having to postpone visits to the doctor, lacking home contents insurance, and having to buy cheaper cuts of meat. How is the Government supposed to reduce poverty when that is the measure?

Cash transfers seem like the obvious choice, but they might not reduce poverty according to the material deprivation measure. What if households use that cash on things that are not included in the index? To ensure poverty is reduced, governments might do better just to pay for everyone's home contents insurance, or buy all households better cuts of meat.

Income thresholds are another way of measuring poverty. A common relative poverty measure is if households earn below 60 per cent of the median income. Again, an obvious solution might be to ensure households have more income, either through welfare payments or raising the minimum wage.

But that might not reduce actual hardship. In fact, the overlap between the income-poor and materially deprived is only around 40-50 per cent. People may be income poor but are able to meet their basic needs. Alternatively, people might earn a decent income but are still not able to afford the things they need.

An income threshold calls for income solutions, but struggling households have diverse needs that won't be solved by money alone. To confuse poverty matters further, the cost of housing needs to be taken seriously. Given the rising cost of housing has added a strain on households who can least afford it, there might be a preference towards measuring after-housing-cost incomes.

If it is the cost of housing that is the problem though, it makes a lot more sense to focus efforts on improving housing affordability.

Refusing to set an official definition for poverty or agree on a target is not evading responsibility. Setting the measure is the easy part. It is following through in a way that will meet the target and reduce actual hardship that will be the challenge.

And let's not forget that the Government has set a number of policy targets to address the problems of vulnerable children.

There is more the Government can do to alleviate hardship. The Government must do better (and is increasingly) at measuring the outcomes of policies and vulnerable groups. But when the answer is "buy vulnerable households better meat", perhaps we should look harder at whether we're asking the right questions.

Jenesa Jeram is a policy analyst at public policy think tank the New Zealand Initiative.