Promises and plans to change poverty in New Zealand

By Kieran Madden February 20, 2018

A few weeks ago, my colleague wrote about Prime Minister Jacinda Ardern’s “courageous move” to introduce the Child Poverty Reduction Bill requiring governments to set poverty targets. I was reminded how in classical times, Aristotle claimed that virtues like courage lie in the “golden mean” between two vices. Courage taken too far, he said, is recklessness; not taken far enough, cowardice.

By introducing this legislation, our Prime Minister is no coward. The Bill shows great promise to be a catalyst to ignite and a framework to support serious action towards reducing poverty. Ardern will need to steer the course carefully, however, as some of the proposed measures introduce serious potential for political and fiscal recklessness without necessarily changing the lives of those really struggling. In other areas, the Bill doesn’t go far enough.

Some of the proposed measures introduce serious potential for political and fiscal recklessness

There are no actual targets in the Bill, just measures, leaving it up to successive governments to set their own. This is wise—similar legislation in the UK has floundered in large part due to making this mistake. While we wait for the (hopefully equally courageous) targets to be set by this Government, the proposed measures in the Bill highlight some of the pitfalls along the way.

Targets set using the first two primary measures—the internationally agreed-upon before and after-housing cost income measures—can, theoretically at least, be easily hit by the Government using the levers of the tax and benefit system. If targets based on these kind of income measures are to make a serious dent in our poverty figures, however, it would involve a radical increase in redistribution. Enacting these policies usually comes at significant political cost, and will certainly come with a fiscal cost. Ardern certainly has a ridiculous amount of political capital to invest on this (and I’m glad she’s chosen this cause), but Treasury doesn’t necessarily have deep enough fiscal pockets to sustainably influence these measures. Solely focusing on these measures would help many families finding it hard to get by, but not necessarily those most at risk.

This is why it’s heartening to see the second two primary measures which are, in my opinion, the ones to watch for families with complex, long-term and overlapping problems. Material hardship measures track outcomes like if kids get a meal with meat every few days or raincoats and appropriate footwear—things which are not necessarily provided even with more money coming in. The other persistent poverty measure tracks how many households are in a long-term low-income situation—which can sometimes endure across generations. Targets set using these measures will be more difficult to hit as Government alone can’t shift them like the other two, they will need to rely on other non-government organisations that can build relationships with these families, to discern their needs and how best to assist them.

This Government realises that there are limits to what they can achieve

The difference between being in Government and being in opposition is stark. Many may be unaware that back in 2014, Ardern submitted a Member’s Bill called the Child Poverty Reduction and Eradication Bill, based on the Children’s Commissioner’s Expert Advisory Group recommendations and the UK’s Child Poverty Act. It was never picked from the ballot. Now in Government, Ardern’s new Bill has left out the “Eradication” part. This signifies that this Government realises that there are limits to what they can achieve. When setting their actual targets, it will be important that these are reasonable too—over-ambitious targets can do more harm than good. 

But it’s important not to set the bar too low either. Ardern’s previous Member’s Bill also included measures called Child Poverty Reduction Indicators, starkly missing from the current Bill. As the 2014 Bill argued, “[f]or the purpose of addressing child poverty, measures of income are not sufficient.” These Indicators, also recommended by the Children’s Commissioner’s Experts Advisory Group and Maxim Institute, included measures that tracked outcomes associated with the causes and consequences of poverty like education, health, social inclusion outcomes. Material hardship measures will be critical, but these related indicators are a necessary complement to bring a wider picture and track some of the causes of poverty. The National-led Government’s Better Public Service Targets (things like increasing immunisation rates and reducing the number of assaults on children), were a little like this. The Government, however, has just scrapped these, signifying an ongoing ideological shift from specific, tailored policy towards universal, system-wide programmes. Unless the Government introduces these in some form (re-branded is fine), they haven’t gone far enough.

Courage taken too far, he said, is recklessness; not taken far enough, cowardice.

The proposed Bill sets out enduring measures, but calls for each successive New Zealand government to devise “a comprehensive strategy that will set actions across Government that enhance and promote the wellbeing of children in New Zealand.” By including the material hardship and persistence measures, the Government has effectively committed themselves to some form of targeted policy if they are to make a real difference; the kind that National zealously devoted itself to under Social Investment. There were problems with Social Investment and the Better Public Service Targets, but the policy baby needn’t be thrown out with the bathwater. It’s about getting the balance right. Ardern is full of courage, let’s hope this translates to making the hard decisions to help the children in struggling families enjoy a better future.

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