Academic journal article Social Policy Journal of New Zealand

Assessing the Progress on Poverty Reduction

Academic journal article Social Policy Journal of New Zealand

Assessing the Progress on Poverty Reduction

Article excerpt

Abstract

This paper presents the summary results of the New Zealand Poverty Measurement Project's analysis of the incidence and severity of poverty during the 1990s, and assesses the impact of five social and economic policies introduced by the Labour-led coalition governments since 1999: New Zealand superannuation, income-related rents on state houses, active labour market policies that promote an employment-rich economy and reduce unemployment, the Primary Health Care Strategy and the planned income support policy to reduce child poverty. Superannuation is assessed as both adequate and sustainable, rents for state houses are found to be affordable, and GDP growth and employment have increased incrementally as unemployment and benefit numbers have decreased. The Primary Health Care Strategy is seen as an innovative initiative that will increase affordable access to general practitioners, but it and the proposed child support initiatives are too new to be adequately assessed. Of the challenges that remain, policy priorities should centre on housing alternatives, including home ownership for low-income households not in state houses; income support for poor households, particularly those with children; and multi-sector development of education and training aimed at lifting economic and social capacity.

INTRODUCTION

In 1991 New Zealand's Finance Minister, Ruth Richardson, announced a Budget that she signalled would be "the Mother of All Budgets" (Louisson 1991), featuring benefit cuts, market rents on state houses and the introduction of a range of new user charges. The Budget led to difficulties for low-income households, which were already under some pressure from a period of rising unemployment and economic restructuring. In 1999, the Labour-Alliance coalition came into office promising new social policies that would begin a process of substantial poverty reduction in certain key policy areas in Aotearoa New Zealand.

This paper presents the summary results of the New Zealand Poverty Measurement Project's (NZPMP) analysis of the incidence and severity of poverty during the 1990s and assesses the available evidence of the impacts on that poverty of the social and economic policies introduced by the Labour-led coalition governments since 1999. (2)

POVERTY MEASUREMENT DURING THE 1990s

Most modern definitions of poverty in OECD countries are relative in the sense that they relate to the living standards of that society. The definition of poverty adopted by the NZPMP is also a relative one: poverty is a lack of access to sufficient economic and social resources that would allow a minimum adequate standard of living and participation in that society.

Poverty is and always will be a contested concept. Even when there is broad agreement on a high-level definition there remains considerable debate over how best to measure poverty. One of the main reasons for the lack of consensus is the need for judgements to be made as to what constitutes a minimum adequate income or a minimum adequate standard of living. (3) As neither the income nor the living standards data can tell the researcher or analyst where to "draw the line", some external way to assess adequacy is needed. The NZPMP's measure of poverty is income based, but in contrast to approaches that simply set a poverty line at an arbitrary fraction of the mean or median household income, the NZPMP has sought to address the issue of assessing adequacy in an explicit and transparent way. The approach involves the use of focus groups to draw on the knowledge and practical experience of low-income householders (i.e. on their judgement) to estimate minimum adequate household expenditure in a full range of household expenditure categories.

In 1992 the NZPMP began a comprehensive research programme into poverty measurement. (4) From 1993 to the present, NZPMP has undertaken ongoing focus group sampling of low-income householders, in differing regions, cultural groups, family structures and employment categories, in urban areas, middle-sized cities and small towns throughout New Zealand, seeking information about minimum adequate budgets. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.