Minister defends lowered child poverty targets as 'achievable'

A child poverty advocate says Social Development Minister Louise Upston made no mention of weakening the government's poverty targets when they met last week.

In 2021 the government set targets of reducing the number of children experiencing material hardship from 13.3 down to 9 percent by 2023/24. The government's new target for 2026/27 is 11 percent.

Upston has rejected criticisms of lowering the targets, saying they are now achievable and ambitious.

The earlier targets for low-income households on the before-housing costs measure was set at 10 percent, but the new one is for 12 percent.

The target for low-income households on the after-housing costs measure went from 15 percent to 14 percent.

Upston made the change through a Gazette notice on 27 June, 2024. In Question Time, Green MP Ricardo Menéndez March asked why.

The minister said it was because child poverty rates had worsened the previous year, so the previous targets were "miles behind what was forecast when the last government originally established the targets".

The child poverty report released alongside the Budget in May showed that although that target had reduced to 10.5 percent in 2021/22, it went back up to 12.5 percent in 2022/23. The AHC measure went from 14.4 percent to 17.5 percent and the BHC measure went from 11.7 percent to 12.6 percent.

The report said the changes reflected "at least in part, the impact of high inflation on the cost of living, which has made it harder for families to afford the basics in the year to June 2023".

Upston said the new target was "both ambitious but, importantly, achievable".

Child Poverty Action Group executive officer Sarita Divis told Morning Report on Friday she was "shocked" not only by the changed targets, but the lack of fanfare.

"There was no press release or any kind of indication. In fact, CPAG and some organisations on the frontline of child poverty, we just met with minister Upton last week and we talked a lot about the child poverty targets, and this wasn't mentioned at all."

Labour social development spokesperson and former minister Carmel Sepuloni said the Gazette notification was a "sneaky way to do it".

"She snuck it through by gazetting it without really informing us or the public appropriately about the significant change," Sepuloni told Morning Report on Friday.

"It is indicative of the government's priorities. They are not prioritising the reduction in child poverty, and many of the changes they've made to date - just in the last eight months - are actually counter to reducing the number of children in poverty."

Divis said the change meant the government would "accept" an extra 17,350 living in poverty on top of the previous target, set by the previous Labour government.

"We're saying to these children, 'We see you, we know you exist, but we just don't think we can help you. Maybe someone down the track will.'"

Divis said child poverty indicators were "tracking alright, we were going down" until this year.

"So this is a point where you sort of say, 'OK, we need to do something about it, and we need to do a concerted effort.' So I'd like to say to the minister, you know, I can accept that there's different opinions on how we're going to reach the goal of halving child poverty, but reducing the target is not a solution. It's basically giving up."

'Complete and utter disregard'

When reporters asked Upston about the change, she said it was "sort of an administrative thing really".

Speaking to Morning Report on Friday morning, she said the government "wanted to… set a target not just based on the last target, but based on where we are today".

"What we have to deal with is what we know the actual rates are, and unfortunately we've seen the number of material children and material hardship go up under the previous government.

"So we've used the actual figures that were published in February this year to then look at where we should set the next three-year target.

"Where it is now is 12.5 percent. We've set it at 11 percent, which is still ambitious. The thing that affects children and material hardship the most is the cost of living, and unfortunately, that is why we've seen the number of children in poverty increasing.

"Our government's focus is on the cost of living - that will have the greatest impact on reducing the number of children in poverty."

Stats NZ data showed while there was a rise in 2023, child poverty rates - according to the 'material hardship' and 'severe material hardship' measures - fell between 2017 and 2023, when Labour either led or made up the entirety of the government.

Morning Report host Ingrid Hipkiss asked Upston why the government would shift the target instead of trying harder to meet the original goal.

"We have to deal with reality, and unfortunately, the numbers have gone up. While we'd like to sit here and say they haven't, our government deals with the reality. We've set an ambitious but achievable target - and that will mean 17,000 fewer children living in material hardship [within three years]."

Upston said the 2024 Budget would lift 17,000 children out of poverty, despite a change to how benefits were indexed that would reduce future increases, through other assistance, like the FamilyBoost tax credit and other strategies focused on the cost of living.

"We're taking practical steps that will make a difference for households that are really struggling because of the cost of living crisis."

Labour and the Greens said the government was shifting the goalposts and diluting the targets to make them easier for the coalition to achieve.

"The government has watered down our child poverty targets by stealth, a decision that will plunge thousands of children into material hardship," March, the Green Party's social development spokesperson, said.

"There has been no announcement and they have shown no accountability for this. This is just the latest example of the government's complete and utter disregard for our communities. This decision shows the government is comfortable with nearly 17,000 more children being in material hardship."

Labour social development spokesperson Carmel Sepuloni said on Friday, immediately after the news broke, it was a new low for the National-led government.

"They have already made a conscious decision to increase the number of children in poverty by changing the way benefits increase to pay for tax cuts, we knew that they were plotting something callous," she said.

"Officials warned the Government the number of children living in poverty would likely increase by 7000 in four years as a result of these benefit indexing changes. One estimate predicted that as many as 13,000 extra children would be in poverty by 2028."

"In Budget 2024 the Government made tax changes knowing that 9000 beneficiaries would be worse off, did nothing to ease cost-of-living pressure and is letting unemployment continue to rise."

The Child Poverty Reduction Act 2018 also requires the minister to "promptly after setting or changing targets, present to the House of Representatives a copy of the targets or changes". This week was the first sitting week since the changes were brought in.

On Morning Report on Friday, Sepuloni said the government did not take the targets seriously, or they would "have been implementing policies that helped them achieve it".

Ministry data showed there were nearly 30,000 more people receiving a main benefit now, compared to a year ago, largely driven by an increase of people recieving Jobseeker Support.