• Let Children Pay the Price?

    As a young law don at Oxford in the early 1970s, I came to know Tony Lynes, the activist who had recently founded the Child Poverty Action Group in Britain. With his help, I set up a free legal advice centre in Oxford, and I have ever since had a particular interest in the issue of child poverty.

    The report this week on child poverty in New Zealand will, I hope, stir more than a few consciences. How can a country that, despite its economic problems, is still one of the most prosperous in the world tolerate such a large and growing number of young children growing up in conditions of deprivation which threaten not only the health, well-being and life prospects of each child but also our integrity and cohesion as a society?

    Even those who dismiss the growing gap between rich and poor as of no concern would surely not require blameless young children to pay the price for our society’s failings? Why then do we do nothing about it?

    If we were serious about lifting children out of poverty we would address at least three fundamental issues. The most serious cause of poverty in today’s New Zealand is the high rate of unemployment. Every new lay-off or closure – and they are coming thick and fast – means more families left without adequate means to support themselves; the unemployment totals are an indictment of our lack of understanding and concern.

    It is time we stopped deluding ourselves that unemployment is a lifestyle choice. People are out of work because there are not enough jobs. There are not enough jobs because the economy remains stalled in recession mode. We are still bumping along the bottom, not because of the usual excuses – the euro crisis and the Christchurch earthquake – but because we have identified different priorities, rather than getting the economy moving again.

    Getting people back to work should be our top priority. Nothing would do more to relieve family poverty and to give 270,000 deprived New Zealand children a decent start in life. Ironically, reducing the cost of unemployment, limiting the lost production that unemployment necessarily implies, and increasing the numbers who pay taxes and spend their earnings would also be the best way of meeting the government’s goal of deficit reduction.

    The second essential step to reduce child poverty is to improve the living standards of those in work. The working poor are a drag on our economy as well as a continuing reproach to our society. We seem to think that keeping people in poverty is necessary if we are to compete with Australia – but the main economic consequence of holding wages down is that more and more of us cross the Tasman.

    Higher wages would mean families able to support themselves and with more spending power to stimulate the economy. The most obvious means of raising low wages by a small margin would be to raise the minimum wage, but a private member’s Bill to do just that will soon be defeated in parliament. Another obvious step would be not to turn a blind eye to attempts by major employers – in areas like care of the aged or freezing works – to hold down the wages of already low-paid workers.

    The third priority should be to recognise that poverty is a particular feature of families with small children because bringing up children is an expensive business. Governments, in New Zealand and elsewhere, have in the past acknowledged this obvious problem by providing special help through measures like family benefit. We have, sadly, abandoned such efforts, often on the ground that it is up to parents to provide for their own children – a sanctimoniously rigorous thesis which ensures that it is the children who must bear the burden if it proves to miss the point in practice.

    This week’s report is in no doubt that if we want to address the poverty of families with children we would ensure that every family with children would have a basic level of income – one that ensures that children are not disadvantaged. But this, we are told, is resisted because it would deliver benefits to the rich as well as to the poor.

    This objection to a measure primarily designed to help the poor is a little surprising when we consider the insouciance with which advantages have been delivered exclusively to the rich over recent times. But there is in any case an obvious solution to the supposed problem.

    It is clear that the most effective way of getting help to those who need it is to avoid means-testing and pay the benefit to all families with young children, as we have done in the past. That payment is then easily “clawed back” through their income tax returns from those who don’t need it. Modern computerisation makes this even easier than it has been in the past – and it is surely not beyond a government that has been willing, through measures like drug-testing, to ensure that the value of beneficiaries’ entitlements is driven down. Should we not require our government to show equal zeal in tackling child poverty?

    Bryan Gould

    29 August 2012

    This article was published in the NZ Herald on 4 September.