Facts about poverty in New Zealand

The facts:

Facts About Poverty in Aotearoa New Zealand seeks to explode the ‘urban myths’ that are constantly recycled about people who are poor.

It is our job to follow the research, evidence and policy about poverty and we want more people to understand what the realities of poverty are.

We’re not the only ones trying to explode the myths. Check out the Child Poverty Action Group’s Myths and Facts: Sole Parents and the DPB and Gordon Campbell’s Ten Myths About Welfare.

These facts call for action and a response from us all. We invite you to ask questions of your own attitudes, those around you and your community and your leaders.

Ask what is being done to lift out of poverty the hundreds of thousands of people our country who are living lives affected by poverty?

What is ‘poverty’ in the New Zealand context?

There is no official ‘poverty line’ in New Zealand as there is in other countries (e.g. USA) and no formal agreement about exactly how to measure poverty.

There is general consensus however, that the strongest indicator of poverty is your level of income. There is also some consensus that an income level set at 60% of median household disposable income after housing costs is a reasonable level of income to protect people from the worst effects of poverty (e.g. this is the measure adopted by the government’s Social Report). NZCCSS believes that any poverty measure set lower than this is too low (e.g. the OECD uses a 50% measure for its international comparisons).

It is possible to calculate that the poverty line after deducting housing costs for a household with two adults and two children lies at $600 per week or $31,200 annually in 2016 dollars. For a sole parent with one child it is $385 per week or $20,200 annually in 2016 dollars (MSD Household Incomes report July 2017, p.106).

Ask yourself – how would I get by if I had to provide for myself and family out of an income less than this? This is the daily reality for hundreds of thousands of people in New Zealand.

Fact 1: There is poverty in the midst of prosperity in Aotearoa New Zealand

  • There is poverty amidst prosperity: There are around 682,500 people in poverty in this country or one in seven households, including around 220,000 children.
  • Some groups are more likely than others to be in poverty: Beneficiaries, children, Māori and Pacific peoples, and sole parents are more likely to experience poverty than other groups.
  • What poverty means for people: Being in poverty means experiencing hunger and food insecurity, poor health outcomes, reduced life expectancy, debt, and unaffordable or bad housing.

Read More about Fact 1

Fact 2: There is not enough help available when you really need it

  • Benefits are not enough to live on with dignity – this is the real issue.
  • The resources of organisations providing emergency assistance are stretched.
  • The benefit system is complex and people are often not made aware of their entitlements.
  • Housing assistance is inadequate.

Read more about Fact 2

Fact 3: With the best budgeting skills there still isn’t enough to pay the bills

  • Because people in poverty must survive on very low incomes, they are adept at budgeting and making ends meet.
  • Contrary to the popular myth, people in poverty don’t spend all their money on alcohol, smokes and gambling.
  • Inadequate income is the real issue affecting the ability of people in poverty to manage their finances.
  • Debt can be a problem for some low-income people, but debt is often linked to tragic circumstances.
  • Debt and problems managing money isn’t just an issue for people in poverty.

Read more about Fact 3

Fact 4: Living on a benefit is not a ‘lifestyle choice’

  • Living on a benefit is not a good ‘lifestyle’.
  • Few women receiving a benefit are unmarried teenage mums.
  • Most sole parents stay on benefits for a short period, and usually only while their child is young.
  • There is some benefit fraud, but most debt to Work and Income is the result of negotiated ‘recoverable assistance’ loans or ‘Innocent Overpayment Debt’.

Read more about Fact 4

Fact 5: Getting a job doesn’t solve the poverty problem

  • Employment alone does not solve poverty and unemployment remains high.
  • Most beneficiaries want to work. International research does not support the assumption that beneficiaries lack a work ethic and are content with the beneficiary ‘life-style’.
  • Obtaining work in itself does not guarantee that poverty will be alleviated. Many jobs are ‘precarious’ or insecure and don’t pay as well (or offer the same security) as a full-time, permanent job.
  • There are good reasons why not all beneficiaries should get a job right now: health problems, disabilities and childcare responsibilities all present major barriers to work.

Read more about Fact 5

Fact 6: Making life hell on a benefit does not reduce poverty

  • Most people are on benefits only for a short time.
  • There is no evidence that cutting benefits reduces dependency.
  • An argument for back-to-work policies is that it is good for children to see their parents working but research has shown negative outcomes for older children when parents are pushed back to work.
  • It is poverty, not dependency, that is the problem.
  • New Zealand can afford to look after our own.

Read more about Fact 6

Fact 7: Economic growth alone does not solve poverty

  • Economic growth alone will not necessarily address poverty and inequality.
  • The gap between the rich and the poor is large and shows little sign of declining.
  • There are more people in poverty now than there were in the 1980s.
  • Income disparities between Māori, Pacific peoples and Pakeha remain high.

Read more about Fact 7