The purpose of recent child poverty reduction and wellbeing legislation is to encourage a Government focus on child poverty reduction specifically, and child wellbeing more generally.
This significant legislation was passed into law on 20 December 2018 with near unanimous parliamentary support. The Child Poverty Reduction Bill (which was divided into two bills at its final reading) became the Child Poverty Reduction Act 2018 and the Children’s Amendment Act 2018, helping to ensure enduring commitment to reducing child poverty and improving child wellbeing.
The Child Poverty Reduction Act
The Child Poverty Reduction Act 2018 requires the government of the day to:
- set long-term (10-year) and intermediate (3-year) targets on a defined set of child poverty measures
- report annually on the set of child poverty measures
- report each Budget day on how the Budget will reduce child poverty and how the government is progressing towards its targets
- report on child poverty related indicators.
The legislation establishes a balanced suite of measures to measure and report on child poverty. The measures will track progress towards the targets, allow some international comparison, and provide a good picture of the impact of policy decisions on the lives of children.
There are four primary measures of poverty and hardship for which the Government must set targets:
- Low income before housing costs (below 50% of median income, moving line)
- Low income after housing costs (below 50% of median income, fixed line)
- A measure of material hardship (reflecting the proportion of children living in households with hardship rates below a standard threshold)
- A measure of poverty persistence (currently being developed, reflecting the proportion of children living in households experiencing poverty over several years, based on at least one of the measures above). (The Act requires reporting on persistent poverty from 2025/26 on.)
There are also six supplementary measures set out in the Act. These allow further international comparison, and ensure that trends at different levels of severity can be monitored and reported on.
The Government Statistician is responsible for defining a number of concepts and terms under the Child Poverty Reduction Act, such as material hardship.
The Act requires the Government to set and review targets for child poverty reduction based on the primary measures. The Act requires 10-year targets to be set, as well as 3-year intermediate targets that support the 10-year long-term targets.
Following the release of the baseline rates as reported by Statistics New Zealand in April 2019, the Government has now officially set its targets for the three primary measures for which data is available.
Ten year longer term targets:*
By 2027/28, the Government aims to reduce the proportion of children in:
- low income households on the before housing costs primary measure from 16 percent of children to 5 percent – a reduction of around 120,000 children.
- low income households on the after housing costs primary measure from 23 percent of children to 10 percent – a reduction of around 130,000 children.
- material hardship from 13 percent of children to 6 percent – a reduction of around 80,000 children.
Three year intermediate targets:*
By 2020/21, the Government aims to reduce the proportion of children in:
- low income households on the before housing costs primary measure from 16 percent of children to 10 percent – a reduction of around 70,000 children.
- low income households on the after housing costs primary measure from 23 percent of children to 19 percent – a reduction of around 40,000 children.
- material hardship from 13 percent of children to 10 percent – a reduction of around 30,000 children.
*Some of the figures have been rounded. The official targets are set out in detail in the New Zealand Gazette notice.
Child Poverty Related Indicators
The Act requires the Government to report annually on one or more ‘child poverty related indicators’ or ‘CPRIs’. These are measures related to the broader causes and consequences of child poverty, and/or outcomes with a clear link to child poverty.
The Government has identified its CPRIs, which are:
- housing affordability – as measured by the percentage of children and young people (ages 0-17) living in households spending more than 30 percent of their disposable income on housing.
- housing quality – as measured by the percentage of children and young people (ages 0-17) living in households with a major problem with dampness or mould.
- food insecurity – as measured by the percentage of children (ages 0-15) living in households reporting food runs out often or sometimes.
- regular school attendance – as measured by the percentage of children and young people (ages 6-16) who are regularly attending school.
- avoidable hospitalisations – as measured by the rate of children (ages 0-15) hospitalised for potentially avoidable illnesses.
The Government intends to begin its reporting on CPRIs early next year. The reporting on these CPRIs will include the measures at different thresholds, and also have the measures broken down by household income or socioeconomic status.
Baseline rates as reported by Statistics New Zealand
The baseline year for these targets is 2017/18. Statistics New Zealand released the 2017/18 baseline rates in April. These rates reflect household circumstances from mid-2016 to mid-2018.
The first set of three year targets are due to be achieved in 2020/21. Statistics New Zealand are likely to publish 2020/21 rates in early 2022.
Children’s Amendment Act 2018
Amendments to the Children’s Act (2014) require successive governments to develop and publish a strategy to improve the wellbeing of all children and young people, with a particular focus on child poverty and those with greater needs.
It will set out the desired outcomes for our children and young people and the actions to achieve them. It will also clearly outline how progress can be measured and reported on so that we can all see the difference being made and where more work might be needed.
An amendment to the Public Finance Act 1989 requires the Government to publish a report on child poverty as part of the Budget each year. This report must discuss the latest progress made in reducing child poverty, and indicate how initiatives in that Budget will affect child poverty.
The Child Poverty Reduction Bill's page on Parliament's website includes a link to the Bill itself, Supplementary Order Papers and a timeline of its progress through the House and Select Committee process.
Child Poverty Reduction Bill documents include a number of background documents related to the Child Poverty Reduction legislation, including the setting of child poverty reduction targets.