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

  • There is poverty amidst prosperity: There are around 622,000 people in poverty in this country or one in seven households, including around 230,000 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, reduced life expectancy, poor health outcomes, debt, and unaffordable or bad housing

Poverty in prosperity

Three decades of massive economic change and restructuring since the mid-1980s have left many people worse off a generation later. The proportion of the population with low incomes increased sharply in the mid-1990s before it began to drop over the latter half of that decade. Despite a continuing slow drop, in 2004 the proportion of the population with low incomes was still substantially higher than in 1984. In 2004 the Working for Families financial assistance package aimed at low- and middle income earners was introduced and led to a reduction in poverty to 14% of the population compared with 17% in 2004. After a rise in poverty again during the global recession (2008-2011) in 2013 the poverty rate is 14%, well above the 1984 level (9%) and means that there remain around 622,000 people in poverty including some 230,000 children (See MSD Household incomes report July 2014. The total population of NZ in June 2013 was 4.44 million).

Some groups are more likely to be in poverty than others

The New Zealand Living Standards 2008 study showed that the following groups are disproportionately affected by poverty:

Beneficiaries with children: well over half (57%) of all households with children that received a benefit experience hardship.

Children are at special risk of poverty: dependent children under 18 years are the age group with the highest rate of hardship with almost a quarter experiencing some hardship.

Cultural impact: Pacific people are most notably affected with nearly 40% living in significant or severe hardship, compared to nearly a third of Māori (32%) or less than a sixth of Asian or Pakeha ethnicity.

What does poverty mean for people?

Hunger

The National Children’s Nutrition Survey found that 1 in 5 families studied said they could only sometimes afford to eat properly. A further 1 in 5 households reported that food sometimes or often ran out because of a lack of money.

Reduced life expectancy

Poverty impacts directly on life expectancy Life expectancy for men living in the poorest areas is an average 8.8 years less than men in the wealthiest areas.

Poor health outcomes

Low income households have higher rates of obesity and cigarette smoking, both major factors in poor health outcomes.

Unaffordable or bad housing

A household is considered to be experiencing housing related stress when housing costs consume 30 percent or more of disposable income.

More than a third of foodbank client households surveyed by NZCCSS were spending 50% of their net income on housing costs. Three quarters of them were paying more than 30%.

Debt

A study of low-income families found that two-thirds of the families surveyed were in debt, and three quarters had been unable to pay at least 1 regular household bill in the past year. Half had been unable to do so on three or more occasions.

Meeting everyday household expenses is the most common reason given why South Auckland Pacific people ended up in debt to loan sharks.