Child poverty declines in spite of COVID

Child Poverty Reduction Social Development and Employment
  • Government policy means child poverty measures improve during COVID-19 in contrast to them rising sharply during the GFC.
  • There are 145,000 fewer children in hardship in 2021 during the COVID-19 pandemic than when hardship numbers peaked after the GFC in 2011.
  • There were 70,000 more jobless households with children during and immediately after the GFC then during COVID-19.
  • Rates of hardship for Māori rose to 36% after the GFC, and 47% for Pacific people. These have since dropped to 20% and 24% respectively. This means there are 40,000 fewer Māori children in poverty now than there were after the GFC.
  • Around the GFC (2007 to 2011) less than 40% of households with children said they had enough income to cover the basics. This is now 61%. That’s 150,000 more households who can meet their basic needs now.

The Annual Ministry of Social Development (MSD) Child Poverty Report shows child poverty continuing to decline despite the 1 in 100 year economic shock caused by COVID-19, Prime Minister and Minister for Child Poverty Reduction Jacinda Ardern says.

“Despite COVID-19 causing the greatest global economic downturn since the Great Depression in New Zealand we have continued to lift children out of poverty over the past two years and avoided to date the spike in poverty we saw during the Global Financial Crisis a decade ago,” Prime Minister Jacinda Ardern said.

“In particular we have seen reductions in material hardship and increases in both before and after housing cost incomes for those on the lowest incomes, including a 40 percent increase in after housing income for those on a Main Benefit since 2018.

“When COVID hit we purposefully put in place policies to avoid the spike in child poverty that occurred during the GFC, and today’s report shows those policies have been effective so far. 

“Government initiatives like the Families Package, minimum wage increases, benefit increases, and Food in Schools have all contributed to reductions in poverty.

“In addition the wage subsidy and investments in skills and training through COVID has delivered record low unemployment, meaning we have avoided to date the big increase of children living in jobless households that was seen in the GFC.

“We have learnt from the mistakes of previous Governments and delivered a response to COVID that has sought to avoid the economic scarring for the majority of children and families unlike in previous economic downturns.

“While there is strong evidence in this report that things have been broadly improving for the worst off kids, I know there are still a core group of children in New Zealand that lead very hard lives and there is more work to do to fix that. 

“I’m proud of what the Government has achieved to date, but remain committed to delivering ongoing reductions in child poverty in order to make New Zealand best place in the world to be a child for all kiwi kids,” Jacinda Ardern said. 

“We’ve remained steadfast in our commitment to reducing the number of children living in poverty and hardship, and today’s report shows that our Government’s suite of actions are making a real difference in children’s and families lives,” Minister for Social Development and Employment Carmel Sepuloni said. 

“Our Government’s once in a generation improvements in support for low and middle income families have reduced the number of children in poverty and our investments in support for businesses and workers like the Wage Subsidy and Flexi-Wage has resulted in Main Benefit uptake being lower compared to after the GFC.

“We are getting record people into work, with around 113,000 people moving off benefit and into work in the last year. 

“This shows the Government’s investment in employment and training along with our constant lifts in income support is continuing to deliver meaningful change. 

“We know people are still feeling the impacts of cost of living pressures, but through our welfare reforms and investments in education, employment and training, we have a plan to tackle the long-term issues facing New Zealand,” Carmel Sepuloni said.