Source: Child Poverty Action Group
The Child Poverty Action Group (CPAG) is pleased to see the Green Party’s election-year platform released today that rebalances tax and puts the needs of children and whānau at the heart of policy.
Most notably, the Greens are promising to replace the seriously outdated and inefficient Working for Families system with enhanced payments to all low-income children on the same basis of need, not whether their parents need a benefit or part benefit.
CPAG research on family budgets found most of the families on a core benefit have a very significant shortfall for a very basic standard of living, and an even bigger gap if allowance for modest contingencies is included. You can read the research here.
“Unifying the tax credits is the single most effective incomes policy if this country is serious about actually addressing the deep and damaging division into the deserving and undeserving poor,” CPAG economics spokesperson Hon Assoc Prof Susan St John said.
Working For Families has many major design issues and has been under review for more than two years — yet so far there is no hint of outcomes of this review and it was left out of the Government’s Budget last month.
“We challenge the government to front up with the decisions of this review as a matter of urgency. Alongside the Green’s policy we hope to see other parties’ policies so that there can be a wide-ranging debate on this critical issue for our children,” said Hon Assoc Prof St John.
Currently the In Work Tax Credit (IWTC) exposes New Zealand to the criticism that it is shirking its responsibilities under the UN Convention of the Rights of the Child because it discriminates against children on the basis of the source of parental income.
The approach has left the worst-off children further behind, collectively depriving them of around half a billion dollars annually.
CPAG has long advocated IWTC should be immediately folded into the Family Tax Credit to form one simple payment for all low-income children.
Overall, simplification is needed and changing abatement levels to make paid work more appealing.
CPAG also agrees with the Greens that Working For Families is far too complex for families in low-paid work who face unacceptable effective tax rates: “The combination of tax, loss of WFF, loss of accommodation supplement and repayment of student loans can make it pointless to earn extra income over a very low household income” said Hon Assoc Prof St John.
“If Working For Families is fixed, significantly more children and their families will be empowered to live free from the toxic stress of poverty. They will have better life outcomes,and be better able to contribute to society. The research is clear that allowing families to have enough money is the most effective way to create positive outcomes.
“It is not the only thing that needs urgent attention but fixing Working For Families is the most obvious and easiest place to start in creating an economy that works for us all. It is good to see the bold moves by the Green party.”
