Minister for Child Poverty Reduction Louise Upston. Photo: RNZ / Samuel Rillstone
The coalition government disagrees with advice provided by officials that $3 billion a year is needed to reach the country's child poverty reduction target.
Minister for Child Poverty Reduction Louise Upston said the government was taking a different approach to the previous Labour government.
She told RNZ the government was focused on growing the economy, improving health and education outcomes, and getting more households into work to bring down child poverty, rather than welfare payments and tax credit changes, which she says were pursued by the previous Labour government.
Under that previous administration, a long-term goal of mid-2028 was set to reduce the number of children experiencing material hardship from 13.3 percent to 6 percent.
That target was announced by then-Child Poverty Reduction Minister Jacinda Ardern in 2018, and a shorter term goal of 9 percent was set for June this year.
A ministerial briefing from Treasury, released to RNZ, shows officials in April this year did not believe the poverty targets were "realistically achievable".
Documents showed year-on-year progress was not on track and meeting the targets "would require investment in the region of $3 billion per year".
Officials presented Upston with two alternative targets for 2028 that they believed could be achieved.
However, Upston told RNZ the government "disagreed with the advice and this approach, as it would further entrench long-term welfare dependency and the number of children growing up in benefit-dependent homes".
She said the $3 billion price tag was based on assumptions of "what it would cost to carry on the previous government's approach" through changes to welfare payments and tax credits.
"We know the previous government's approach was not working because all three primary measures of child poverty increased on its watch in 2023 and the number of children in material hardship increased by 4100 over its six years.
"Labour tinkered with welfare payments but did not manage the economy, which saw any progress on child poverty targets quickly erased by the cost-of-living crisis," Upston told RNZ.
Labour's deputy leader and Social Development spokesperson Carmel Sepuloni said Upston's comments were shortsighted and out of touch.
"To suggest we cannot both focus on growing the economy and lifting children out of poverty is insane," Sepuloni said.
"Increasing wages and benefits are one way to help solve the issue. The decision to change the indexation of benefits from wage growth to inflation was praised by the children's commissioner - National undid it.
"Lifting children out of poverty is the moral obligation of any good government. This one clearly doesn't have any morals and continues underhanded action."
Upston said Treasury modelling showed investments in Budget 2024 toward health, education and employment, are estimated "to lift around 17,000 children out of poverty on the after housing costs primary measure by 2026/27".
"We know this approach works, because during the last four full years of the previous National-led government, from 2012/13 to 2016/17, the number of children in material hardship fell by 56,200," she said.
Green Party spokesperson for child poverty Ricardo Menéndez March. Photo: Tom Taylor / RNZ
Green Party spokesperson for child poverty Ricardo Menéndez March told Midday Report $3 billion a year was a worthwhile investment.
"We've got to consider the fact this government has chosen to invest almost the same amount in tax cuts for landlords," he said.
"We've also got to remember the costs of keeping so many children in poverty - it piles on pressure on our healthcare system and our education system."
Menéndez March said funding to pay for these costs could be generated through things like a wealth tax, which the Greens have long campaigned on.
"We've made it clear both to National and Labour that they haven't done enough to reduce child poverty."
In a written statement, Child Poverty Action Group's executive officer Sarita Divis said they could accept ministers may have different approaches, but Upston had not provided any compelling evidence her plan would work.
"Not only has the minister rejected official advice, she has not provided any solid evidence, modelling or data that shows her chosen path will result in us meeting the 2028 goal of halving child poverty," Divis said.
She said Upston had not only rejected official advice, she had also rejected two other specific options presented to her - and instead doubled down on a "more ambiguous plan of 'cutting taxes' and 'growing the economy' in order to lift children out of poverty".
"We know that ending child poverty is the right and compassionate thing to do. We have signed up as a country to halve child poverty and ensure all children have what they need to live up to their potential. The Minister of Child Poverty Reduction needs to be the greatest champion."
