Susan St John: Real cash injection needed to curb child poverty

Child poverty has huge personal and social costs, and fixing up the damage will be enormously costly. Photo / Karel Miragaya

Susan St John is an honorary associate professor of economics at Auckland University and spokeswoman for the Child Poverty Action Group.

John Roughan's opinion piece on Saturday comfortingly implied that solving child poverty does not require families be given more money.

He pats National on the back for the "social investment" approach. Just find the ones really in need and help them directly. Get them to sort out their "poor life choices" and "unwise spending decisions". Don't throw money at the problem willy-nilly. Sounds sensible to anyone who has never lived in the constant shadow of not having enough money to care for their children.

Apparently, because the latest child poverty figures are based on 2015 figures and miss the $25 lift in benefit payments in 2016, we don't have the full picture of "the numbers left behind by economic growth" to vote intelligently. Given the way benefits have fallen behind average wages, the lift in benefit payments was a small realignment, such as recommended by the OECD years ago. It should have been paid to all beneficiaries, not just those with children.

Roughan asserts he would "not be surprised if a little extra income has made no discernible difference to the statistics". Yes, because the $25 increase is a drop in the bucket. After offsets, the average beneficiary family got only $17 more a week. For a couple with four children, it is about an extra $3 per person per week.

The child poverty figures Roughan acknowledges are "astonishing" and "appalling" are not touched by this kind of spending, nor are lives measurably improved. So yes, this marvellous gesture, milked for all it was worth by National, can be expected to have little impact on the child poverty figures and has been rightly ignored by the children's movement.

A key driver of child poverty has been the way National has deliberately eroded the working for families weekly payment for children. Just to restore real spending to 2010 levels requires an extra $700 million per annum. Even National is embarrassed by the severity of these cuts and has promised to increase working for families for larger very-low income families if elected.

Like the $25 a week benefit increase, if National genuinely cared it would make those increased working for families payments from 2017, not 2018 as an election bribe.

Another key driver of child poverty is housing costs requiring extra spending on the accommodation supplement as the Government also belatedly acknowledges.

But more reliance on supplementary means-tested benefits is a retrograde step. Better incomes and less conditionality should be the goal. Restoring working for families to 2010 levels is not enough. The terrible division of poor children into deserving and undeserving sees $72.50 of weekly working for families denied to the worst-off families.

This needs another $450m per annum to fix. All of this would go only to those in the worst poverty and would have a substantial impact on hardship and on reducing the demands that overwhelm the charitable sector.

Roughan snipes at "social scientists who never tire of telling us the only thing these people need is more money". For nearly a decade the pension paid to superannuitants has risen every year, along with average living standards, well above other standard adult benefits. We protect the old by paying them more. But we must also protect the young.

Child poverty has huge personal and social costs, and fixing up the damage will be enormously costly as the Government's social investment approach will prove. While this spending is necessary, it has little to with the spending required to prevent child poverty.

If the next government spends enough to improve incomes of struggling families, about a minimum of $1.5 billion to fix working for families and alleviate housing costs, then and only then, will child poverty figures seriously improve.