Ardern sets her child poverty reduction targets

Jacinda Ardern and Grant Robertson cross the road to St Peter's church to deliver a speech detailing child poverty reduction targets. Photo by Lynn Grieveson

Prime Minister Jacinda Ardern has set a target to roughly halve the number of children living in poverty over the next 10 years - a target which she described as ambitious.

However, the targets (which use several official measures of poverty) don't appear to reduce child poverty much more than the improvement already baked in from the new Government's families package announced in December.

Ardern yesterday released the details of a bill to commit all Governments to reduce child poverty, but did not release the specific targets her Government would use.

She said her Government aimed to reduce the proportion of children in low income households (using the before housing cost measure of 50 percent of the median income or below) from roughly 15 percent of all children (160,000) to 5 percent (60,000) over the next 10 years, implying a reduction of 100,000. The Government would aim to reduce the proportion of children in low income households (using the after housing costs measure) from roughly 20 percent (210,000) to 10 percent (120,000). This is a reduction of 90,000 children from 210,000 now down to 120,000. It also aimed to reduce the proportion of children in material hardship from between 13 and 15 percent now to 7 percent. This would reduce the number of children in this group from 150,000 to 80,000.

“These are ambitious targets that will make a substantial difference for children. Most significantly, by targeting reductions in the rate of children in low income households and hardship (not just the number), we are committing to keeping the rates low over time, rather than achieving one-off benefits that could quickly erode," Ardern said in a speech to a community forum at the St Peters Church in Wellington.

However, the Government said in December that its families package would reduce the number of children living in households earning below 50 percent of the median household income by around 88,000 by 2020/21. This implies a further improvement of around 12,000 over the following seven years. This was compared in December with the then-National Government's 2017 Budget package, which was forecast then to reduce child poverty by 49,000.

Then Prime Minister Bill English promised in the election campaign to double that reduction to 100,000 in the coming two to three years. His measure then was the number of children living in households with before housing cost incomes of less than 50 percent of income.

This latest target set by the new Government would therefore be no more than the 100,000 promised by English.

However, the child poverty reduction estimates for the Budget 2017 and December 2017 families packages' are currently under review because of a coding error by Treasury in its forecasting model. Treasury is expected to update its forecasts later in February, but noted it expected any change would be small and did not change the relative differences between the National and Labour packages.