Экономист Сьюзан Ст-Джон опровергла правительственную доктрину о том, что работа является единственным способом выбраться из бедности

Dr Claire Achmad, the highly esteemed outgoing Children’s Commissioner, has left the nation in no doubt as to the enormity of social damage arising from the neglect of children in our poorest families. Many others have noted that 2028 Child Poverty reduction targets will be widely missed as official measures Giving a lie to the claim ‘work is the way out of poverty’ and a flawed child benefit system – Susan St John Subscribe to listen Ah, says the government, our intention is to make work pay because “work is the way out of poverty”. Of course, we would not tolerate this for the old, so why do we tolerate it for the young? Other countries acknowledge that children have income needs. Family benefits or child tax credits are usually made to the caregiver based on the number and ages of the children. These may be universal like our old family benefit, or income tested (targeted) against the income of the family, as are “Working for Families” tax credits. Before 1991, New Zealand used to have a combination of a universal family benefit and targeted assistance. In New Zealand today, when parents lose paid work for any reason they may end up on a very low adult welfare benefit. In the name of providing them with a “work incentive”, their children’s weekly tax credits are cut by nearly $100 per week. Perhaps the parents are victims of this harsh recession, or there is chronic illness or disability, and they simply cannot hold down a job, or there is just one parent to do all the work of parenting. If the parent(s) manage some part-time employment and get a reduced benefit, even that does not give their children the right to the full “Working for Families” payment. The withheld $100 payment is misleadingly called the “In Work Tax Credit” disguising its true purpose, which is to help keep children out of poverty. The Court of Appeal found in 2013 that the “In Work Tax Credit” discriminates against children whose parents are on benefits. Today about 260,000 children suffer deeper poverty because of this discrimination without any evidence it is effective as a work incentive. The CPAG Manifesto requires replacing “Working for Families” with one simple, non-discriminatory Child Tax Credit. The new Child Tax Credit would replicate what we provide for families not on a benefit, at $250/week for the first child, $130 for subsequent children, plus a $77 supplement per child under 3. All children in low-income families, regardless of parents’ paid work or benefit status, are then treated the same. This would begin to turn around the shameful child poverty and hardship we see in families in the benefit system. The Child Tax Credit would be indexed annually by the greater of average wage growth or CPI. Currently those on benefits can earn only $160 a week before they see a very sharp reduction in their benefit. This penalises people who have intermittent work, as it is a weekly test not an annual one that would average things out over the year. We seek a benefit abatement threshold at 15 hours of the minimum wage ($359) and suggest an annual income test applies. But a second major transformative change is also needed. Despite some glib rhetoric about the virtues of work, more than half of all children in poverty live in households supported by paid work. “Working for Families” tax credits are tightly targeted so that only a very low income “working” family on a joint income under $44,900 (less than one full-time adult on the minimum wage) can access the maximum assistance. Parents face horrendous poverty traps when they earn over the very low joint income threshold. Consider the situation of a family where one adult earns $53,600, just over the minimum wage, to support two adults and children. Suppose the working parent takes on overtime to earn an extra $10,000. Giving a lie to the claim “work is the way out of poverty”, after tax and ACC ($3160), loss of Working for Families ($2750), repayment student loan ($1200), loss of housing assistance ($2500), just $390 remains. Imagine the despair when they get the demand for a “Working for Families” or loan repayment that puts them into debt to Inland Revenue. CPAG’s Manifesto requires lifting the “Working for Families” threshold to at least $53,500 and cutting the abatement rate to 20% from the current 27.5%. The threshold for student loan repayment is frozen at an absurdly low level of $24,100, affecting many low-income families and should be lifted to over $60,000. Work is clearly not “the way out of poverty” for any of those already in poverty on benefits or in low-paid work. It is time for our politicians to drop unsupported mantras about paid work and provide realistic support so that all children can thrive in their formative years. Honorary Associate Professor Susan St John QSO CNZM is an economist at the University of Auckland Business School. She was a co-founder of CPAG in 1994, and is its long-standing economics spokesperson. Catch up on the debates that dominated the week by signing up to our Opinion newsletter – a weekly round-up of our best commentary.