Media Release

CPAG At Loggerheads With OECD

Tuesday, April 29, 2008

The latest Child Poverty Action Group report has slammed work-first policies as discriminating against children of beneficiaries and 'insufficient to eliminate child poverty'.

Welfare commentator Lindsay Mitchell says the CPAG wants child poverty solved through higher benefits. "This ignores international research* that shows an increase in benefit payment results in increased rates of sole motherhood and subsequent benefit uptake."

The group states that, 'generous welfare need not result in a poverty trap...' . According to Mitchell, however, "This is exactly what generous benefits do already. The OECD showed out of 23 countries New Zealand has the third highest sole parent benefit payment at 54.8 percent of the median income. Because our benefits are not time-limited they draw young and unskilled women into many years of dependency. As many of half of those sole parents currently on welfare started there as teenagers. "

"The CPAG acknowledges that the vast majority of children in poverty are living in one-parent welfare dependent homes yet reject work as the best way to reduce child poverty. This puts them in direct conflict with the OECD. In 2007 , on the back of extensive international research** exploring the comparative effectiveness of using benefits or work to reduce child poverty, the OECD recommended to New Zealand 'reforms to reduce joblessness among families with children should be a priority.' Sweden, the most effective country at reducing child poverty, has a sole mother employment rate almost 60 percent higher than New Zealand."

Mitchell concludes, "It is the availability of welfare that is central to the child poverty problem - not the availability of work. The solution does not lie in simply giving people more money. As a strategy this has already proved extremely unsuccessful."

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* The Effect of Benefits on Single Motherhood in Europe, Libertad Gonzalez, August 2006

**What Works Best in Reducing Child Poverty: A Benefit or Work Strategy?, Peter Whiteford and Willem Adema, OECD, 2007

ENDS

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