To this Letters Main Page

To this Letters Features

To this Letters Diary










To the Index


Search












Stats


Hotlinks






Subscribe






home


To JRT
    Addressing Poverty

    from The Jobs Letter No.85 / 27 August 1998


    The Hikoi of Hope calls for income and benefit levels that move people out of poverty. Every day social service agencies are dealing face-to-face with families and individuals who are poor and whose basic needs for jobs, housing, education and health care are not being adequately met. These agencies are seeing an intolerable level of pain and distress in our communities. At the same time, those New Zealanders who are well-off are getting richer.

  • New Zealand has no set poverty line. Unlike Australia, Britain, the United States and many other developed countries, all of which have varying degrees of official recognition of poverty. A poverty line enables a country to determine the number of its citizens who do not have sufficient income for essential items such as food, housing, heating, clothing and doctor's visits.

  • The 1991 social policy changes that reduced benefits and increased rentals affected low-income households severely. The poorest 20% of households lost around 24% of their income.

  • Research data tells us a very large number of New Zealanders now live in poverty and the situation is getting worse. Figures supporting this come from research on income levels, housing, health, employment and education.

    For example: Indicating the impact of the social policy changes, one study showed the proportion of all households in New Zealand living in poverty grew from 12.9% in 1990 to 16.3% in 1993.

    Soon after Easton's study in 1993, the New Zealand Poverty Measurement Project, estimated 18.5% of New Zealand households were living below the poverty line. This included 33% of all children living in this country.

    Of all people living below the poverty line in New Zealand, two thirds are Pakeha. However the incidence of poverty overall is greater among Maori and Pacific Island New Zealanders (even though these populations are smaller, a higher proportion of their households are poor).

  • The 1990s has seen a rapid growth in the number of foodbanks in New Zealand. In the Auckland metropolitan area alone the number of foodbanks rose from 16 to 130 between 1989 and 1994. In the same period the client list for Salvation Army foodbanks grew from a little over a thousand clients to nearly fifteen thousand.

    The Department of Social Welfare estimated that 40,000 food parcels were provided each month by 365 foodbanks in New Zealand in 1994. We know the figures are higher now. The Salvation Army, one of the main providers of this essential assistance has seen a 22% increase in the use of foodbanks in the first quarter of this year compared to the same time last year.

  • Some people think that only careless spending and poor budgeting lead to poverty. Social service providers know that this is often not the case. A survey of foodbank clients who used church budgeting services found that 75.5% of people who used a budgeting agency did so, not because of poor money management, but because their incomes were too low.

    Expenditure on housing is the single biggest factor affecting low income households. Poor families spend more on housing than anything else. The poverty lines used in the New Zealand Poverty Measurement Project are not generous. They are minimal. They allow for example, only $16 a day for food costs for a family of 2 adults and 3 children.
    "The social and economic reforms have not benefited all New Zealanders. Too many people are now living in considerable hardship."

    On the other hand, the Department of Social Welfare does not estimate or publish budgeted household costs when setting benefit levels. In this sense benefit levels are arbitrary and there is no guarantee that they provide enough income for people to live adequately.

    It's not only beneficiaries who are struggling. Nationally, around 10% of Salvation Army foodbank clients are in jobs and in some areas the proportion of clients in jobs is more than 20%.

  • The gap between rich and poor is growing faster in New Zealand than most developed countries. Between 1984 and 1996, the very rich have become richer, while the bulk of the population became poorer in relative terms. The bottom 80% of households had a reduced share of the "national cake" while the top 5% got 25% more.

    The government's tax reduction and social policy programme of 1996 resulted in two rounds of tax cuts that cost $3 billion. Research has shown that the programme has not significantly benefited low and lower-middle income families. Instead the households who do best out of the programme are high-income dual earner families (whether they have children or not).

    While considerable tax breaks have been given to middle and upper income groups, further reductions to benefit levels were announced in this year's Budget.

    The Budget introduced further cuts to some benefits and a new sanctions system that could see some beneficiaries losing a significant proportion of their benefits.

  • The Anglican Church, at its General Synod/Te Hinota Whanui (May 1998) considered the erosion of benefit levels has gone too far. The social and economic reforms have not benefited all New Zealanders. Too many people are now living in considerable hardship. The Anglican Church is asking New Zealanders to acknowledge the growing levels of inequality in our country and the human and economic cost of poverty.

  • The Church is not promoting unnecessary handouts or welfare measures that are not affordable. Nor does it want to see people trapped in poverty and hardship with almost no opportunity to improve their circumstances. Each household must have sufficient income to meet their fundamental needs for food, housing, clothing and medical expenses to have any real chance of becoming independent.

    A country able to provide significant income breaks for higher earners could have afforded to lift the incomes of poor households. The Hikoi of Hope calls on the Government and the nation to listen to the voices and experiences of the poor and to acknowledge that there must be better policy approaches which enable justice and dignity for all New Zealanders.

    Sources -- The National Government Budgets of the First Year in Office: A Social Assessment, Waldegrave C and Frater P (1991), a report to Sunday Forum by the Family Centre and BERL; Poverty in New Zealand: 1981-1993, Easton, B (1995), New Zealand Sociology 10 (2), November; Measuring Poverty in New Zealand, Stephens R, Waldegrave C and Frater P (1995), Social Policy Journal, Te Puna Whakaaro (5) December; Participation in Poverty Research: Drawing on the Knowledge of Low Income Householders to Establish an Appropriate Measure for Monitoring Social Policy Impacts, Waldegrave C, Stuart S and Stephens R (1996), Social Policy Journal, Te Puna Whakaaro (7) December; Foodbank Demand and Supplementary Assistance Programmes: A Research and Policy Case Study, Mackay R (1995), Social Policy Journal of New Zealand - Te Puna Whakaaro (5) December; Housing the Hungry: the third report, Gunby J (1996); Salvation Army (1998) Press Release, 25 July; Budgeting for a Deficit, NZCCSS (1995; Housing the Hungry: the third report, Gunby,J (1996; New Zealand Christian Council of Social Services, 1998; Sharing the National Cake in Post Reform New Zealand: Income Inequality Trends in Terms of Income Sources, Chatterjee S, 1998; Poor Policy, A Report for the NZCCSS on the 1991 Benefit Cuts and the 1996 Tax Cuts, Dalziel P (1996).

    To the Top
    Top of Page
    This Letter's Main Page
    Stats | Subscribe | Index |
    The Jobs Letter Home Page | The Website Home Page

    jrt@jobsletter.org.nz
    The Jobs Research Trust -- a not-for-profit Charitable Trust
    constituted in 1994
    We publish The Jobs Letter