how can the economic position of children be improved? dr susan st john department of economics...
TRANSCRIPT
How can the economic position of children be
improved?
Dr Susan St John
Department of economics
University Auckland
1991 Winter lecture
Winter Lecture 1991
13 years of research reports galore
2004 Budget• This is the biggest offensive in the war
against poverty in decades
– Helen Clark
• Using a poverty value measure of 60 per cent of median household income there is expected to be a 30 per cent reduction in child poverty by 2007/08.
Budget 2004
UK commitment in 1999• Our historic aim, that ours is the first
generation to end child poverty forever… it’s a 20 year mission but I believe it can be done– Tony Blair
Targets to reduce child poverty
• 25% in five years• 50% in 10 years• 100% in 20 years
Money isn’t everything, but
Children need
– Stable and secure housing
– Sufficient income
Without this minimum, any family dysfunction cannot be addressed
70% of poor spend more than 30% of income on housing
30% spend more than 50%
(NZCCSS)
Why are families so poor?Percentage change in average household
equivalent disposable income by decile, 1982 - 2001
-20.0
-10.0
0.0
10.0
20.0
30.0
40.0
1
Deciles
Percentage change
Auckland City MissionFood Parcel totals as at 31 May
2200
2400
2600
2800
3000
3200
2001/2 2002/3 2003/4
Doubling since 1996
Background to neglect From Post war security
• 1986 Family Support/ Family benefit
• 1991 Family Support
• 1996 Family Support and the Child Tax Credit
Problems• Child-related payments are:
– too low
– have not been adjusted for inflation
– cut out from low income levels
– are all related to income
– poor children don’t get the child tax credit
To summarise
• Can’t rely on economic growth
• Can’t rely on provision of work incentives
• Policies like the Child Tax Credit have been a failure
Other countries do much better
UK universal child benefit• £16 for the eldest child • each other child £11.
AustraliaQuasi-universal payment of A $21.00 Only 6% miss out and only when income
is $86,000-$126,000.
One child, two parent family on benefit
Maximum Family Support
1986 $42 a week
2004 $47 a week
Needs to be $75 to have the same purchasing power
Budget will help- eventually Family support
30
35
40
45
50
55
60
65
70
75
80
Years
Real Value ($)
For those on benefits
Child Tax Credit and ‘in work’ payment
Family support and in work payment
30
50
70
90
110
130
150
Years
Real Value ($)
In workpayment
Child taxcredit
Working familiesFace very high effective tax rates
A 4-child family on over $38,000
Earns another $1000
tax 330
Loss of Family support 300
Student loan 100
Retains only 270
Outcome of 2004 Budget
• Children in poverty must wait until next year
• Significant package 2005-7 but follows
years of neglect
• Substantial gains for “in work” families from 2006
• Inflation- proofing 2008
21
The task ahead• Provide a child audit of all economic
and social policy• Don’t expect economic growth or work
incentives to solve the problem• Encourage the direction of the budget
but as the first not last step• Ask for more immediate action • Create a climate in which change will
be accepted and understood• Support all efforts to redistribute to
poor families- above all resist tax cuts.