Hikoi of Hope: Poverty
One of a set of Backgrounders published in 1998, at the time of the Hikoi
The Hikoi of Hope calls for income and benefit levels that move people out of poverty. Every day social service agencies are dealing face-to-face with families and individuals who are poor and whose basic needs for jobs, housing, education and health care are not being adequately met. These agencies are seeing an intolerable level of pain and distress in our communities. At the same time, those New Zealanders who are well-off are getting richer.
Poverty is increasing
New Zealand has no set poverty line, unlike Australia, Britain, the United States and many other developed countries, all of which have varying degrees of official recognition of poverty. A poverty line enables a country to determine the number of its citizens who do not have sufficient income for essential items such as food, housing, heating, clothing and doctor’s visits.
The 1991 social policy changes that reduced benefits and increased rentals affected low-income households severely. The poorest 20% of households lost around 24% of their income.
Research data tells us a very large number of New Zealanders now live in poverty and the situation is getting worse. Figures supporting this come from research on income levels, housing, health, employment and education.
For example:
- Indicating the impact of the social policy changes, one study showed the proportion of all households in New Zealand living in poverty grew from 12.9% in 1990 to 16.3% in 1993.
- Soon after Easton’s study in 1993, the New Zealand Poverty Measurement Project estimated 18.5% of New Zealand households were living below the poverty line. This included 33% of all children living in this country.
- Of all people living below the poverty line in New Zealand, two thirds are Pakeha. However, the incidence of poverty overall is greater among Maori and Pacific Island New Zealanders (even though these populations are smaller, a higher proportion of their households are poor).
The growth in food banks
The 1990s has seen a rapid growth in the number of food banks in New Zealand.
-In the Auckland metropolitan area alone the number of food banks rose from 16 to 130 between 1989 and 1994
-In the same period the client list for Salvation Army food banks grew from a little over a thousand clients to nearly fifteen thousand.
-The Department of Social Welfare estimated that 40,000 food parcels were provided each month by 365 food banks in New Zealand in 1994.
We know the figures are higher now. The Salvation Army, one of the main providers of this essential assistance has seen a 22% increase in the use of food banks in the first quarter of this year compared to the same time last year.
Why are people poor?
Some people think that only careless spending and poor budgeting lead to poverty. Social service providers know that this is often not the case. A survey of food bank clients who used church budgeting serviced found that 75.5% of people who used a budgeting agency did so, not because of poor money management, but because their incomes were too low.
Expenditure on housing is the single biggest factor affecting low income households. Poor families spend more on housing than anything else.
The poverty lines used in the New Zealand Poverty Measurement Project are not generous. They are minimal. They allow for example, only $16 a day for food costs for a family of 2 adults and 3 children.
On the other hand, the Department of Social Welfare does not estimate or publish budgeted household costs when setting benefit levels. In this sense benefit levels are arbitrary and there is no guarantee that they provide enough income for people to live adequately.
It’s not only beneficiaries who are struggling. Nationally, around 10% of Salvation Army food bank clients are in jobs and in some areas the proportion of clients in jobs is more than 20%.
The gap between rich and poor
The gap between rich and poor is growing faster in New Zealand than most developed countries. Between 1984 and 1996, the very rich have become richer, while the bulk of the population became poorer in relative terms. The bottom 80% of households had a reduced share of the “national cake” while the top 5% got 25% more.
The government’s tax reduction and social policy programme of 1996 resulted in two rounds of tax cuts that cost $3 billion. Research has shown that the programme has not significantly benefited low and lower-middle income families. Instead the households who do best out of the programme are high-income dual earner families (whether they have children or not).
While considerable tax breaks have been given to middle and upper income groups, further reductions to benefit levels were announced in this year’s Budget. The Budget introduced further cuts to some benefits and a new sanctions system that could see some beneficiaries losing a significant proportion of their benefits.
Enough is enough
The Anglican Church, at its General Synod/Te Hinota Whanui (May 1998) considered the erosion of benefit levels has gone too far. The social and economic reforms have not benefited all New Zealanders. Too many people are now living in considerable hardship. The Anglican Church is asking New Zealanders to acknowledge the growing levels of inequality in our country and the human and economic cost of poverty.
The Way Ahead
The Church is not promoting unnecessary handouts or welfare measures that are not affordable. Nor does it want to see people trapped in poverty and hardship with almost no opportunity to improve their circumstances. Each household must have sufficient income to meet their fundamental needs for food, housing, clothing and medical expenses to have any real chance of becoming independent.
A country able to provide significant income breaks for higher earners could have afforded to lift the incomes of poor households. The Hikoi of Hope calls on the Government and the nation to listen to the voices and experiences of the poor and to acknowledge that there must be better policy approaches that enable justice and dignity for all New Zealanders.
Sources:
Poverty in New Zealand: 1981 – 1993, B. Easton, 1995
Measuring Poverty in New Zealand, R Stephens, C Waldegrave and P Frater, Social Policy Journal, December 1995
Foodbank Demand and Supplementary Assistance Programmes: A Research and Policy Case Study, R Mackay, 1995
Housing the Hungry: the third report, Gunby J, 1996
Salvation Army, Press Release, 25 July 1998
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