Wellbeing Budget 2020

Child Poverty Report

What were the trends in child poverty prior to COVID-19?

On 25 February 2020, the Government Statistician published the first report of progress against the child poverty targets set under the Act. This was also the first release that had the potential to show an initial impact from the Government's Families Package on child poverty rates.

Reporting timeframes meant that the impact of the Families Package was only partially shown. The bulk of the Families Package was implemented in April and July 2018. While the rates covered annual household incomes for households interviewed from mid-2018 to mid-2019, the income period they were asked about was for the 12 months prior to the date each household was interviewed (going back to mid-2017 for some households).

Of the nine different poverty measures reported, seven showed decreases from the previous year's baseline rates. Rates for the three primary measures in Stats NZ's report are presented in Figures 1, 2 and 3 (the green line).

Table 3 - 2018/19 rates of child poverty for the three primary measures

Primary measure 2017/18 baseline 2018/19 rate
On the BHC50 measure 16.5% of children (183,400 children) 14.9% of children (168,500 children)
On the AHC50 measure 22.8% of children (253,800 children) 20.8% of children (235,400 children)
On the material hardship measure 13.3% of children (147,600 children) 13.4% of children (151,700 children)

The graphs also show the Treasury's modelled estimates of changes from the Families Package and Budget 2019 at the time the Stats NZ figures were released (in February 2020).[2] It is not possible to model the projected impact on the material hardship measure. This modelling was based on the economic forecast at the time, so does not include the social and economic impact of the COVID-19 pandemic, nor the measures we have announced in response. Because the economic and social context has changed significantly in recent months, these projections now no longer apply, however they do indicate that the Government was broadly on track to meet the three-year targets on the two primary measures of low income.

Modelling projected impact

Modelling is only available for the income measures and is not available on the material hardship measure.

This modelling is a projection only and the impacts of these initiatives are best expressed as a range, based on a 95 per cent margin of error. This range accounts for survey variability but not deviation from current economic forecasts.

Figure 1 - Children in households below the moving-line BHC poverty threshold

Figure 1 - Children in households below the moving-line  BHC poverty threshold

Figure 2 - Children in households below the fixed-line AHC poverty threshold

Figure 2 - Children in households below the fixed-line  AHC poverty threshold

Figure 3 - Children in households experiencing material hardship

Figure 3 - Children in households experiencing material hardship

Notes

  1. [2] For all charts above, access to the data used in this study was provided by Stats NZ under the conditions of the security and confidentiality provisions of the Statistics Act 1975. The results presented labelled as Treasury Projections are the work of the Treasury, not Stats NZ.
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