Child poverty fight requires political consensus

The hardest task the child poverty bill faces will potentially be retaining cross-party support in the long term, writes Professor Jonathan Boston.

Profesor of Public Policy Jonathan Boston
Professor Jonathan Boston, who assisted government officials in drafting the Child Poverty Reduction Bill, discusses its four main elements.

Prime Minister Jacinda Ardern has released her government’s Child Poverty Reduction Bill and its bold objective is to achieve a ‘significant and sustained reduction’ in childhood poverty and material hardship in New Zealand.

Morally, the goal is worthy. Practically and politically, there is a good case for placing the measurement, monitoring and reporting of poverty rates on a firm legislative basis.

The Bill has its origins in the recommendations of the Expert Advisory Group (EAG) on Solutions to Child Poverty established in 2012 by the then Children’s Commissioner, Dr Russell Wills.

Drawing on the EAG’s work, Ardern, who was then-Labour’s spokesperson for social development, crafted a Member’s Bill on Child Poverty Reduction and Eradication. The new government’s legislation is modelled on this Bill, albeit with some notable modifications.

Four main elements of the Bill

The Child Poverty Reduction Bill has four main elements. First, it requires governments to measure child poverty annually using 10 specified and clearly defined measures—four referred to as ‘primary’ and six as ‘supplementary’.

Recognising the multi-dimensional nature of poverty and the absence of any single, universally agreed poverty threshold, these 10 measures include a range of income-related measures, several material hardship measures and one measure of poverty persistence.

Second, the legislation obliges governments to set intermediate (i.e. three-year) and long-term (i.e. 10-year) targets for each of the four primary poverty measures. Governments will be free to determine their preferred targets and amend them as deemed appropriate.

In this regard, the proposed legislation differs from the former British Child Poverty Act (2010), which embraced legally binding targets. The recently enacted Child Poverty Act in Scotland follows the UK approach. By contrast, under the New Zealand model, the required targets will be politically binding; they will have no legal force. In my view, this constitutes a more sensible approach.

Third, the Government Statistician will be required to report annually on rates of child poverty based on the 10 measures enunciated in the legislation. She will also be responsible for deciding various technical matters, such as how the required poverty measures are defined, interpreted and applied.

Fourth, the Child Poverty Reduction Bill requires governments to develop, publish and subsequently review a comprehensive child wellbeing strategy. While such a strategy must consider the interests of all New Zealand children, the legislation obliges governments to give particular attention to reducing child poverty and overcoming socioeconomic disadvantage.

Standing back from the particulars, the Child Poverty Reduction Bill is essentially a political ‘commitment device’. It is designed to encourage successive governments and the wider community to focus on the challenge of child poverty and take active measures to address it.

By requiring governments to set targets periodically and regularly report the results, the legislation can be expected to enhance political accountability for child-related outcomes. In so doing, it should also mobilise and direct the resources of various governmental agencies to pursue the task at hand.

But realistically, what are the chances of the Prime Minister’s Bill achieving a ‘significant and sustained reduction in child poverty’? Is there, for instance, a reasonable chance of halving poverty rates, as required by the Sustainable Development Goals to which the former government committed New Zealand?

Failure of the British Child Poverty Act

The British Child Poverty Act was largely a failure and has been repealed. This was despite almost universal multi-party support when the legislation was enacted in 2010.

What went wrong?

To start with, the British Conservative party was never strongly committed philosophically to the idea of legally binding child poverty targets. Equally important, various leading Tories disagreed with how poverty was defined and measured under the Act, notwithstanding the fact that the legislation followed widely accepted international practice.

Instead, they favoured using other social indicators, such as rates of joblessness, sole parenthood and addiction. Moreover, in response to the global financial crisis (GFC), the centre-right coalition adopted a strategy of fiscal austerity. This included significant cuts in family assistance and major changes to income support arrangements. As a result, child poverty in the UK has worsened since 2010.

A similarly bleak outcome is highly unlikely in New Zealand. The macroeconomic context has much improved since the immediate aftermath of the GFC, and the Government’s families package—which takes effect later this year—will enhance the disposable incomes of many disadvantaged families.

The Government is also committed to additional policies to reduce family hardship, especially in relation to housing affordability and access to welfare assistance. Collectively, such initiatives will contribute to a ‘significant reduction’ in child poverty—on most, if not virtually all, of the primary and supplementary measures.

But can these expected reductions be sustained? And can New Zealand aspire to having child poverty rates as low as those in Scandinavia? This would entail rates, on various measures, around half those of recent decades.

Sustaining significant poverty reductions will require a multi-party commitment to low rates of poverty, ongoing community support, continued economic prosperity, and well-designed policies. Such policies must include a comprehensive system of price and wage indexation across most forms of social and family assistance.

Unlike their Conservative counterparts in Britain, few senior National MPs have seriously challenged how social scientists internationally interpret and apply the concept of poverty.

Significantly, too, National party leader Bill English committed his party during the 2017 election campaign to reducing child poverty by around two-thirds (at least on one particular measure) if his Government were to be re-elected. This provides grounds for hoping that National will ultimately support the Prime Minister’s legislation and its underlying goals.

The harder task will potentially be to retain this cross-party support over the longer-term. Maintaining low rates of child poverty involves upfront fiscal costs. These costs are often more visible than the economic and social benefits associated with reduced family hardship. They can thus be politically inconvenient.

That is why it will be crucial to retain strong public backing for anti-poverty objectives, together with the ethical values on which such objectives are based—a commitment to social justice, compassion, inclusion, and a prosperous long-term future for everyone.

This commentary originally appeared in Newsroom, 30 January 2018.