Bill English wrong about child payment discrimination

This week I asked some questions in the House about child poverty. I wanted to highlight that while Working for Families (WFF) has been great for children whose parents are in paid work (the rate of child poverty has halved for such children since WFF was introduced), it has done nothing for the children of beneficiaries, 70 percent of whom continue to live in poverty, without access to the essentials.

Children have the same needs, whether their parents are in work or not. But if a parent loses their job overnight (as so many have in Christchurch), they also suddently lose access to part of their WFF support. The In-Work Tax Credit (IWTC) provides about $60 per week to help with the essentials for those on the lowest incomes, but only if you’re in paid work. If you can’t find work, or lose your job, you miss out, and so do your children.

When children have the same basic needs, regardless of the income status of their parents, this just isn’t fair. In fact, it discriminates agains some of our poorest children. That’s why we’re thrilled that our member’s bill to replace the IWTC with a child payment for all families who need it has been pulled from the ballot and will soon be debated in Parliament.

When I asked Finance Minister Bill English about this discrimination in Parliament this week, he said this:

“this case has been to every tribunal it can go to and no one has found that the difference in payment is discriminatory.”

In fact, that’s just not true. The Child Poverty Action Group (CPAG) first took a case to the Human Rights Review Tribunal in 2008 alleging that the IWTC was discriminatory. In a 100-page judgment, the Tribunal upheld the claim of discrimination against 230,000 of the poorest children in New Zealand. However they did not go as far as to find that the IWTC was illegal, which is the part of the decision that CPAG appealed.

When the appeal was heard in 2011, the High Court again ruled that the IWTC is discriminatory. But it said that this discrimination could be justified because the purpose of the IWTC is to incentivise parents into work. CPAG disagreed and prepared an appeal on this point to the Court of Appeal.

Last month, the Court of Appeal granted CPAG leave to appeal against the decision of the High Court in relation to its claim of discrimination against the 230,000 children of beneficiaries.

So actually, Bill English was wrong. Successive courts have found that the IWTC is discriminatory; the issue is whether and how that discrimination can be justified.

We say it can’t, and that’s why we need our bill to replace the IWTC with a fairer, more universal child payment, that can help guarantee the essentials for all children who need it.

Meanwhile, CPAG is preparing the next stage of its appeal. Until now, the Office of Human Rights Proceedings at the Human Rights Commission has paid for CPAG’s top legal team. The Office is pledging to continue providing a junior counsel, but can no longer offer any funding for CPAG’s senior counsel, court fees or expenses. CPAG’s  counsel has committed to do some of the work pro bono, but they need to raise $50,000 to take their case to the Court of Appeal.

You can support their efforts to raise funds for their appeal here. They’re also selling three original Tom Scott cartoons, which first appeared in Bryan Bruce’s Inside Child Poverty documentary on TradeMe to help raise funds. But don’t buy them, ok? They’re on my watchlist.

15 Comments Posted

  1. Tapu Misa has a clue:

    The advisory group points out that in the mid-1980s, the child poverty rate was about half what it is now. Did thousands of parents suddenly forget how to parent properly? Or were they the victims of policies that saw real incomes fall?

    Here’s a clue: according to a recent Ministry of Social Development report, household incomes fell for all but the top 10 per cent between 1988 and 2004. It took 20 years for real household incomes at the median to recover to early 1980s levels, and 25 years at the low end.

  2. I wish people who want to justify discrimination against youth or legitimise acceptance of child poverty would get their stories straight – is it youth under 20 or beneficiary parents with children who drink (woodstock bourbon) RTD’s?

    The same nonsense from those trying to reduce foetal alcohol syndrome by increasing the drinking age to 20.

  3. I would also like to point out the the IWTC is not paid to those doing a PhD and receiving a scholarship because they are not in standard, contract-for-40-hours-per-week ’employment’. Going through this process is an absolute pre-requisite to becoming an academic and normally takes 3-5 years (particularly if study was interrupted by CHCH EQs). It is a gaping black hole in the scheme and punishes the children of our brightest NZers. This is combined with the fact that National already cut scholarships in a big way, and due to awesome handling of the country the cost of living is through the roof. Many families of up and coming academics actually live in poverty.

  4. Shunda – you seem to be making a rather generalised statement about the “poor” – isn’t Holly’s point that beneficiaries are being discriminated against by the In Work Tax Credit – lose your job, lose your tax credit – is that fair ?

    I do agree that abuse of alcohol may be significant among poor people – (or at least they don’t hide it as well as the wealthy) – but that may also be related to low self esteem, failing in the school system and having to work in shitty low paid jobs, where you are expendable when they don’t need you any more … maybe you could watch some Charlie Chaplin movies and you might see what I mean.

  5. My business is doing just fine, God forbid I base it on a sustainable model, pay my staff above the minimum wage, and live a modest lifestyle.

    I have no nasty disposition toward the poor, I have experience in the real world.

  6. First, the Nats don’t care about poor children and only see welfare money as something private business should be able to get their hands on and ‘clip the ticket’.

    Secondly, I read Shundas post as a moan about his business which sounds like a lemon, but then again if he is the sales person its probably doomed to fail regardless. Shunda moaning about his business is irrelevant to New Zealands growth in child poverty, but it probably is relevant to his nasty disposition towards the poor.

  7. Providing meals in schools would be one way to improve the lot of the poor children directly (and some children from more affluent parents) without the assistance going to RTDs or pokies. It might also improve truancy rates.


  8. yes holly, you obviously don’t understand the lifestyles of the poor … we will have to wait for shunda’s next post to learn more about that.

    I’m not the one idealising the poor and making ridiculous assumptions about them all being perfect financial managers and having nothing but the their children’s best interests at heart.

    More money (in many cases) will mean more woodstock bourbon RTDs. how will you resolve this?

  9. It certainly does sound as if there are some poor who live a different lifestyle than most, and whose finances aren’t as well understood. I hope Shunda explains in more detail.

    I favour approaches which reduce the costs of raising children, such as financing schools adequately so they don’t need to impose fees, and getting rid of charges for doctors, dentists, required pharmaceuticals, etc. Much of this has been done but I am sure there is scope for more.


  10. yes holly, you obviously don’t understand the lifestyles of the poor … we will have to wait for shunda’s next post to learn more about that.

  11. “When children have the same basic needs, regardless of the income status of their parents, this just isn’t fair.”

    This unfairness doesnt stop with the in work tax credit. It will only be fair once we get to full state ownership of capital and ban private property. Up until then there will always be material differences between children.

  12. This is such theoretical rubbish that I have to wonder whether the greens understand the ‘poor’ they are claiming to represent at all.

    If you change this Holly, some of my beneficiary neighbors will be in a better financial position than my wife and our family and we own a small business.

    Here is the long and short of it, you don’t seem to have a clue about why children are really in poverty, you don’t seem to understand the lifestyles of the poor, and you certainly aren’t going to change a damned thing by giving them more money.

    If you want to solve child deprivation in NZ, pay part of the benefit in non exchangeable food vouchers and pay rent directly.

    Problem solved.

    But don’t try and tell me that more money is the answer, that’s like trying to stop a sieve leaking by adding more water.

  13. Spam – I have argued here repeatedly that all Children in NZ should be supported in kind rather than in Cash. Period. No income test at all.

    If it is done with money, then either the taxes are increased and the cash is given without an income test, or there are lower taxes and there is an income test that you’d fail.

    Choose. Some people are going to be better at hiding their income from the tax man than others though. We don’t have Capital Gains taxes here.


    Moreover, it means nothing to be “in the top tax bracket”. My family and I are struggling to make ends meet and I am “in the top tax bracket”.

    Just about the entire middle class of NZ is “in the top tax bracket”.

    Which indicates two things.

    First: We don’t have ENOUGH tax brackets.
    Second: The top tax bracket is not taxed enough.

  14. I earn in the top tax bracket. Do you think that I, by your logic, should also get the in-work tax credit (I have a young child who has the same needs as any other child)? If not, why not?

    I mean, you qualify the payment as for those “who need it”, which suggests that you want to discriminate (your term, not mine) against me, because perhaps you consider that I don’t “need it”?

  15. Great summary of the issues. We need to end discrimination against our children. It can’t be justified at any level.

    Please support the CPAG appeal.

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