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How Social and Income Inequalities Damage New Zealand Children ISBN 0-9582263-6-9 © April 2008 Child Poverty Action Group Inc

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How Social and Income Inequalities Damage New Zealand Children ISBN 0-9582263-6-9 © April 2008 Child Poverty Action Group Inc Child Poverty Action Group (Inc) (CPAG) is a non-profit group formed in 1994, and made up of academics, activists, practitioners and supporters. CPAG has a strong education and research role which enables it to contribute to better informed social policy to support children in Aotearoa New Zealand, specifically children who live in poverty. CPAG believes that our high rate of child poverty is not the result of economic necessity, but is due to policy neglect and a flawed ideological emphasis on economic incentives. Through research, CPAG highlights the position of tens of thousands of New Zealand children, and promotes public policies that address the underlying causes of the poverty they live in. If you are not already supporting CPAG and you would like to make a donation to assist with ongoing work, please contact us at the address below or through our website: www.cpag.org.nz Child Poverty Action Group also publishes an on-going series of monographs about government policies and their impact on children: Our Children: The Priority for Policy 2001; 2003 Room for Improvement: Current New Zealand housing policies and their implications for our children 2003 Cut Price Kids: Does the 2004 “Working for Families” 2004 budget work for children? Hard to Swallow: Foodbank use in New Zealand 2005 Workfare: Not fair for kids? 2005 Disclaimer: This publication is intended to provide accurate and adequate information on the matters contained herein and every effort has been made to ensure its accuracy. However, it has been written, edited and published and made available to all persons and entities strictly on the basis that its author, editors and publishers are fully excluded from any liability or responsibility by all or any of them in any way to any person or entity for anything done or omitted to be done by any person or entity in reliance, whether totally or partially, on the contents of this publication for any purpose whatsoever. i Left behind: How social and income inequalities damage New Zealand children ISBN 0-9582263-6-9 © April 2008 Child Poverty Action Group Inc. P. O. Box 56 150 Dominion Road, Auckland. www.cpag.org.nz ii Contents Contents ........................................................................................................ iii Figures........................................................................................................... iv Tables ............................................................................................................ vi Acknowledgements ....................................................................................... 1 Preface............................................................................................................ 1 1. Executive summary ............................................................................ 4 2. CPAG key recommendations ............................................................ 8 3. Introduction ...................................................................................... 11 4. Growing inequality and child poverty............................................ 12 5. Work, families & poverty: Overview of social welfare reforms .. 27 6. Working for Families ....................................................................... 44 7. Tax and redistribution: The re-emergence of the 1980s tax break .................................................................................................. 58 8. Health perspectives on child poverty.............................................. 73 9. A geography of poverty: Housing and neighbourhoods in New Zealand .............................................................................................. 90 10. The 20 hours free ECE Policy ....................................................... 103 11. Some inconvenient truths about education in Aotearoa-New Zealand ............................................................................................ 109 12. Social hazards ................................................................................. 119 13. The way forward............................................................................. 134 Appendix 1. Challenging the In-Work Payment: A summary of the Child Poverty Action Group complaint to the Human Rights Review Tribunal ................................................................. 141 References.................................................................................................. 145 iii Figures Figure 1: Percentage of children (0-17) in households with equivalent income less than 50% of the median income (most recent data)..........13 Figure 2: Child poverty rates in the EU, US, Canada and Australia (%) ca 2003: 60% of before-housing-costs median income ..................14 Figure 3: Changes to Gini coefficient for OECD-15 countries, mid 1980s-2000, disposable incomes...............................................................15 Figure 4: Proportion of children below 60% median income (AHC): constant-value (CV) and relative (REL) measurements compared.....18 Figure 5: Proportion of children below selected thresholds (AHC): 50% of median (CV) and 60% of median (CV).....................................21 Figure 6: Percentage of dependent children under 18 and percentage of those aged 65 and over in hardship, 2004 (ELSI Scale)....................22 Figure 7: Changes to living standards, dependent children under 18 years, 2000 and 2004.................................................................................23 Figure 8: Living standards of families on income-tested benefits, 2000 and 2004. ....................................................................................................24 Figure 9: Number of sickness and invalids beneficiaries, 1980-2005 .........32 Figure 10: Number of food parcels distributed per quarter by Auckland City Mission, first quarter 1996 - second quarter 2007.......34 Figure 11: Real net benefit rates and real net average wage rates, 1981 to 2005 ...............................................................................................42 Figure 12: Net benefits relative to net average wages, UB, single, and DPB with two children..............................................................................43 Figure 13: 1-child maximum real family assistance 1986-2008 ($2004).....49 Figure 14: Disposable weekly income (RHS axis) and effective marginal tax rate for single parent with two children ..........................53 Figure 15: House of tax credits.......................................................................54 iv Figure 16: Tax receipts as percentage of GDP (2004)..................................60 Figure 17: Top tax rates for selected OECD countries ................................60 Figure 18: Annual Household Financial Saving by Income Decile - 1997-98 .......................................................................................................63 Figure 19: KiwiSaver enrolments as at October 2007..................................65 Figure 20: Annual household income of selected family types....................68 Figure 21: Annual tax savings from income splitting ..................................69 Figure 22: New Zealand and Australian tax rates........................................70 Figure 23: Health and safety of children, an overview ................................75 Figure 24: Hospital admissions and deaths due to bronchiolitis in infants <1 year, New Zealand 1990-2006 (admissions) & 1990- 2004 (deaths)..............................................................................................78 Figure 25: Hospital admissions and deaths due to bronchiectasis in children and young people 0-24 Years, New Zealand 1990-2006 (admissions) & 1990-2004 (deaths)..........................................................80 Figure 26: Hospital admission rates (1988-2004) due to serious skin infections for New Zealand children and young people 0-24 years .....81 Figure 27: Hospital admissions and deaths due to gastroenteritis in children and young people 0-24 Years, New Zealand 1990-2006 (admissions) & 1990-2004 (deaths)..........................................................82 Figure 28: Relative changes in median house prices and wages and salaries........................................................................................................91 Figure 29: Changes to home ownership rates in selected countries, 1980/81 - early 2000s.................................................................................92 Figure 30: Percent low-income households (<$30,000) by % single parent households, Auckland City. .........................................................97 Figure 31: Free ECE enrolments as a proportion of 3-4 year old enrolments (excl. Casual Ed & Care), by region. Manukau, North Shore, Waitakere and Auckland city are also shown.................106 v Tables Table 1: Number of Sickness and Invalids beneficiaries, December 2001 and December 2006..........................................................................33 Table 2: WFF weekly support from 1 April 2007- children under 13........46 Table 3: Name changes to family assistance payments................................52 Table 4: Most frequent causes of death in children and young people aged 1 month-24 years..............................................................................76 Table 5: Post-neonatal hospital acute admissions by primary diagnosis in children 0-14 yrs, New Zealand 2002-2006 .......................77
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