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    Essential Information on an Essential Issue

    Letter No.37

    19 April, 1996

    April 1996 GROUP of SEVEN JOBS SUMMIT at Lille, France

    The latest research on the face of poverty in New Zealand by the Rev Charles Waldegrave, Paul Frater and Bob Stephens, was presented to the Children's Coalition conference in Auckland earlier this month. The study provoked a fierce reaction from Jim Bolger and government Ministers over the existence of poverty in this country and how it should be quantified. The study, based on 1993 figures, is the most recent research on poverty in NZ since the major social policy changes and benefit cuts of 1991. It shows:
  • 198,242, or 18.5%, of NZ households are below the poverty line.
  • 598,995 people, or 20.5% of all NZers, live below the poverty line
  • 32.6%, or a third, of all NZ children live below the poverty line
  • single-parent households with children are the largest household type living in poverty.
  • 73% of all single parents live below the poverty line.
  • housing costs are the largest single cause of this poverty.
  • 64% of families renting homes from Housing NZ are below the poverty line.
  • the incidence of poverty is two and a half times greater among Maoris and three and a half times greater among Pacific Island families than Pakeha families.

    The researchers set the poverty threshold at 60% of the median equivalent household disposable income. This works out at :

  • $324.83 per wk or $16,891 per yr for two adults with one child
  • $306.03 per wk or $15,914 per yr for one adult with two children
  • $211.14 per wk or $10,979 per yr for a single person

  • The report says that $826m would be needed to bring these families above the poverty threshold, but warns that "eradicating poverty is not as simple as setting aside $826 million..."

    The researchers acknowledge that since 1993, certain conditions have changed which could impact on their assessment of the poverty rate. The full impact of the move to market rentals for state housing did not occur until July 1995. And since 1993, there has been both an increase in the GDP rate, and a drop in the official unemployment rate. And the impact of this year's tax cuts and family support package will also influence the survey results.

    The study was done by the Rev Charles Waldegrave of the Family Centre in Lower Hutt, Paul Frater of Business Economic Research Ltd (BERL) and Bob Stephens of the Victoria University Faculty of Commerce and Administration. The project was funded by the Foundation for Research Science and Technology.

    Source - New Zealand Herald 12 April 1996 "One in three children below the poverty line"

    The Acting Social Welfare Minister Jenny Shipley disputes the findings of the study by Waldegrave, Frater and Stephens, and has attacked the methodology chosen by the researchers. Shipley: "To claim that NZers are living in poverty in 1996, given all the changes the government has made, I think is highly misleading..." She says that the number of people defined as living in poverty would have been below 5% in 1993, if "internationally accepted measures" had been used. And she said that while there was no dispute that some NZ families struggled, many would be offended to be defined as living `in poverty'.

    Source - New Zealand Herald 13 April 1996 "Minister, foes dispute poverty in NZ" and 15 April 1996 "Shipley and welfare agencies debate meaning of poverty"

    Heretaunga MP Peter McCardle says that his commitment to his ideas for tackling unemployment is what drove him to leaving the National Party earlier this month and joining up with NZ First. McCardle is a former Employment Service officer, and in his maiden speech to Parliament in 1990, he advocated the establishment of regional commissioners and committees which would manage the resources presently divided between the NZ Employment Service, the Social Welfare Department, the Education Ministry and Business Development Boards. He is a firm supporter of a compulsory work-for-dole system where the unemployed would be given community work and training in useful skills.

    While National accepted the work-for-dole system as part of its election platform in 1990, once it became government, officials ruled that the idea would be too expensive to run. McCardle and Hawkes Bay MP Michael Laws then developed another proposal for the scheme which would be "fiscally neutral" using only the money that the government was already paying out. They figured that people's dole payments, topped up with council and other local money, could keep the unemployed active nearly full-time on local work projects. But, according to McCardle, the government has consistently rejected this model in favour of the present centralised approach which focuses on job placement through NZES. Watch for: Work-for-dole measures featuring more prominently in NZ First's employment policies.

    Both Peter McCardle and Michael Laws have already put their work-for-dole plans into operation in their own electorates, through employment trusts. The Sunday Star-Times reports that McCardle's Upper Hutt Employment Trust has the support of the local council and has given work to about 300 people, half of whom have gone on to further employment. The workers get the equivalent of the dole through the Taskforce Green budget, plus a top-up payment from the local council, and local donors. The Community Employment Group has funded the administration of the Trust.

    Source - Sunday Star-Times 7 April 1996 " Work-for-dole a success, says peters' recruit" and The Dominion 5 April 1996 "Jobless policy `drove' McCardle to NZ First".

    Bill Birch has set his Budget night as Thursday 23rd May.

    A new study on the government's tax cuts package shows that the rich will benefit most from the coming tax cuts, contrary to the government's stated aims. The report, Poor Policy, by economist Paul Dalziel (and prepared for the Council of Christian Social Services) challenges Finance Minister Bill Birch's assertion that all families will benefit from the package "but the largest gains are reserved for low and middle-income working families..."

    Dr Dalziel calculates that 60% of the benefits of the so-called "hand-up" package will go to the wealthiest 40% of the households, and that well over one third of the benefits will go to the top 20% of households. In contrast, only 7% of the programme's total benefits will go to the poorest 20% of households over the next two years.

    Source - The Dominion 10 April 1996 "Economist disputes benefits of tax cuts"

    The 400% explosion of gang membership in the last decade has been blamed on government policies that have killed the 80s style of work schemes. Mongrel Mob Advisory Panel national co-ordinator Harry Tam says that the static gang membership of the 80s coincided with the then National Government's comprehensive programme of work schemes to assist at-risk unemployed people, including gang members. The Labour Government closed down these work schemes and did not replace them, despite warnings from the 1979 Select Committee on Violence, the 1981 Committee on Gangs and the 1987 Ministerial Committee of Inquiry into Violence. Tam says that all these committees stressed the importance of providing support for gangs in employment, education, accommodation and recreation.

    The Figures: Harry Tam says that in 1981 gang membership was about 2300 people. By 1986, police figures showed there were only 2209 gang members, prospects and associate members. Today, according to latest Police Criminal Intelligence Service figures, there are an estimated 4000 patched gang members, with an extra 4-6000 prospects and associates.

    Source - The Daily News 9 April 1996 "Gang popularity blamed on Government"

    Amidst calls from Phil Goff to cut government funding to gangs, Employment Minister Wyatt Creech reports that government-funded employment spending on gang affiliated groups accounted for only 1% of the total financial support for groups and communities in the last five years.

    His figures: The Community Employment Group reports that it allocated only $665,000 to groups with gang affiliations since 1992, compared to the more than $61 million allocated to other community-based employment projects. Dennis O'Reilly of Internal Affairs says that since 1992 the Lotteries Board gave less than $50,000 to gangs and their associates out of a pool of $379 million. O'Reilly says that compared to the early 80s, gang funding had shrunk.

    Source - The Dominion 16 April 1996 "Funding for gangs 1% of total pool, says Creech.

    Teaching jobs. Briefing papers to Wyatt Creech, in his capacity as the new Education Minister, show that an extra 3700 teachers and 5000 new classrooms will be needed in the next 10 years. Mr Creech describes the situation as a "big challenge" rather than a crisis. The PPTA says that the figures could well be higher, especially if the impact of increasing numbers of foreign fee-paying students and new permanent residents is taken into account.
    Source - The Dominion 6 April 1996 "3700 teachers needed in 3 years" and 8 April 1996 "Teacher supply notes doubted"

    There are plenty of job opportunities in the area of food and product demonstrations, according to the Auckland firm Fieldforce, an agency which places demonstrators in supermarkets and retail stores nationwide. Fieldforce directors Carey Palmer and Robyn Kurth told the New Zealand Herald they could easily place 100 people in Auckland, 20 in the Waikato and 60 in Wellington.

    Fieldforce says that six years ago they were turning many people away after advertising for staff, but today they are hardly getting any response at all. 95% of the demonstrators are women who work part-time clocking up 20hrs over a three-day period from Thursday to Saturday. It is considered hard work because the demonstrators would probably speak to 1500 people in that three-day period, and are on their feet all day.

    Source - New Zealand Herald 15 April 1996 "Big demand for demonstrators"

    The Sydney 2000 Olympics is already opening up job opportunities for NZ builders. The New South Wales government reports that up to 26,000 extra workers would be needed in the city during the next four years.
    Source - New Zealand Herald 15 April 1996 "Jobs in Sydney"

    "In Parliament, Mr Bolger stood by remarks he made that he went into many schools each year and had not seen any sign of poverty in terms of children looking hungry.
    "Some children looked quite plump, he said..."
    -- report in the New Zealand Herald, 17 April 1996

    "In this country we have seen a 600% increase in people needing food parcels. People have not become 600% more lazy or irresponsible. The reasons are structural. Structures and policies are not inevitable or outside our control, but are based on choices that we have made collectively. As such, they are subject to the same scrutiny as our individual actions, based on values or community and justice and the common good..."
    -- Dr Ruth Smithies, Director of the Catholic Office for Justice, Peace and Development

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