The Effects of COVID-19 on Child Poverty in New Zealand
During the international struggle of dealing with COVID-19, New Zealand stood out as one of the few nations able to effectively and quickly minimize the virus. But the effects of COVID-19 on child poverty in New Zealand have worsened one of the country’s biggest social problems. More than 235,000 children live in poverty in New Zealand, a striking number considering New Zealand’s population of 4.8 million.
Child poverty in New Zealand is among the nation’s most dominant social issues. Tackling child poverty was a key tenant of Prime Minister Jacinda Ardern’s Labour Party Platform prior to her 2020 reelection. However, the economic fallout from the pandemic has hampered the government’s ability to deal with widespread poverty. Still, the government’s pandemic population assistance could be useful for taking on child poverty in the long term.
The Pandemic of Child Poverty
The New Zealand government defines child poverty across three measures. The first two include children living in low-income families before and after factoring in housing costs. The other encompasses children facing “material hardship.” Material hardship is a condition that a list of 17 factors in a child’s day-to-day life measures, such as owning two pairs of good shoes or having financial access to a doctor. If a child does not meet six of these items, the government considers them as living in material hardship. The government estimates that 13.4% of children in New Zealand were in material hardship in 2019 and that 20.8% of children lived in poverty after factoring in housing costs.
Even before COVID-19, the reduction of child poverty in New Zealand was challenging for the federal government. Even though Ardern and the Labour Party ran on the promise they would halve child poverty and material hardship by 2028, the percentage of children living below the poverty rate dropped by only 1.6% between 2018 and 2019. Early in 2020, UNICEF ranked New Zealand as having the 33rd worst record on child poverty out of 37 nations in the Organization for Economic Cooperation and Development (OECD).
COVID-19 Response and Alleviating Poverty
The New Zealand government’s response to COVID-19 provided a number of economic and social safety nets to those the pandemic affected, dedicating 4% of its GDP to pandemic relief. New Zealanders received a weekly relief payment until June 30, 2020. The amounts ranged from $585 a week for full-time employees and $350 a week for part-time employees. The government also introduced wage subsidy programs for employers and employees, allowing families to earn their pre-pandemic income even if they were unable to work regular hours or at their place of employment.
According to the government’s 2020 Wellbeing Budget, these relief programs kept several families from slipping into poverty throughout the pandemic. In managing the COVID-19 crisis, Jacinda Ardern’s government found effective ways to manage child poverty in New Zealand. It did this through the subsidization of wages and relief programs with the intention of protecting household economic stability. In addition to wage subsidies and relief packages, the government has worked to fight poverty during the pandemic through:
- Doubling the “Winter Energy Payment,” a welfare program with a design of helping low-income families and pensioners pay for energy bills.
- Introducing a rent freeze to prevent low-income or unemployed households from eviction.
- Negotiating with major banks on deferring mortgages.
The Future of Child Poverty Response
These benefits are temporary, with the purpose of shielding New Zealanders from the economic impact of the pandemic. However, the government is incorporating economic relief into its long-term plans to tackle child poverty in New Zealand. Labour’s 2020 Manifesto, which the government’s response to the pandemic shaped, includes extensive plans to assist low-income New Zealand households and workers. This includes extensions of COVID-19 relief programs, such as wage subsidies for those seeking employment.
Child poverty in New Zealand remains a high national priority for the government and the people of New Zealand. The government’s fast response to COVID-19 mitigated what could have been a disastrous increase in child poverty. Should Jacinda Ardern’s coalition government between Labour and the Green Party continue to follow the success of its COVID-19 response, New Zealand could take major strides in tackling child poverty.
– Kieran Graulich