OPINION: Bryce Wilkinson.
Last month, the Ministry of Social Development released the latest of its excellent statistical reports documenting the extent of child poverty, hardship/deprivation in New Zealand.
The proportions are much below their peak rates around 15 years ago but are still too high.
In 2023-24, New Zealand’s child material hardship rate on a standard measure was 13% for children aged 0-17 years. The average for European Union countries was 14%. On the severe material deprivation measure, our 5% rate was bettered by 13 of 29 European countries. Several of those countries also have lower incomes per capita than New Zealand.
The richness of the report lies in its detailed breakdowns. The headline aggregate statistics are sliced in over a dozen ways – by age, household composition, earnings, liquid assets, ethnicity, housing ownership and tenure and disability. The report quantifies the effects of high housing costs on after-tax incomes.
Children most likely to face material hardship are those in households with certain features ─ such as no market income, no liquid assets, only one parent and social housing. Children classified as Māori or Pacific people are a high-risk category. Household disability also significantly adds to the challenges.
The report stresses that belonging to a category is not destiny. For example, the overlap between being in a low-income household and being in hardship is typically only 45%. Many one-parent Māori and Pacific households will be doing well.
Individual agency matters. US social scientist Charles Murray, emphasised the importance of attitudes to work, stable marriage, parental responsibility and self-reliance. Researchers building on Murray’s work distil this into a “success sequence”: avoid teenage pregnancy, complete schooling, get a job and stay in work, marry and stay married, and only have children once you can afford them.
Of course, there are still no guarantees. Bad luck, accidents and disability can wreck anything.
There is much that governments do that makes it harder or easier for young adults to achieve such goals. The quality of public education is crucial. Unaffordable housing is a policy-driven disaster. Barriers to first jobs are too high. Welfare programmes need to be rigorously evaluated.
Governments have put too many barriers in the way of kids making the transition from public education to work. This is like cutting off the bottom rungs of the ladder the young need to climb. Disruptive AI advances add to the concern.
Bryce Wilkinson is a Senior Fellow at The New Zealand Initiative
