Duncan Garner wrote a passionate column yesterday in the local paper calling for gutsy action on child poverty.
His analysis of the causes of child poverty in New Zealand was good. Garner’s solutions had nothing to do with what he had identified as the causes of child poverty. As Garner himself wrote:
… in order to tackle poverty it’s important to attempt to define what it means today.
Poverty is children living in crowded, damp homes who don’t get three square meals a day.
They may not have their own bed, they won’t see a doctor when they’re sick and many of them will be admitted to hospital with serious poverty-related illnesses such as respiratory problems and skin infections.
They may live in households where paying the rent accounts for 60 per cent of the family’s income every week.
Garner then discussed the plight of one particular family in Auckland:
The parents are nice people, with seven children.
They shared a tiny home with three other adults and another child.
Dad works full-time at a meat factory and they had been waiting 10 months for a state house. They had beds in the dining room and lounge.
They couldn’t afford the cost of a private rental home. One son, aged 11, had a serious lung problem. I saw poverty in action that day and it was deeply disturbing. I highlighted their plight on my radio show and within weeks a shamed Housing NZ had found them a home.
The family Garner discussed is in a tiny house because they lacked the income to rent a better one. They must rely on social housing provided by government with income related rents.
Recurring through his problem definition is the impact that rising housing costs is having on the poor.
Nonetheless, Garner then advocates cash payments to low income families, a tax credit system seen as more generous and inclusive, and a back to school bonus without addressing the supply of housing.
The evidence is overwhelming in New Zealand that the main driver of the increases in the child poverty since the 1980s is rising housing costs.
In the longer run after housing costs child poverty rates in 2013 were close to double what they were in the late 1980s mainly because housing costs in 2013 were much higher relative to income than they were in the late 1980s.
– Bryan Perry, 2014 Household Incomes Report – Key Findings. Ministry of Social Development (July 2014).
Any policy to reduce child poverty must increase the supply of houses by reducing regulatory restrictions on the supply of land.
The Metropolitan Limit confines the expansion of Auckland beyond the existing built-up area. This regulatory constraint explains the exceptionally high housing price-income ratio of Auckland.
The limit imposed on the horizontal expansion of the city in green fields encourages increases in residential prices. As demand for new housing increases, no new land supply can enter the market and stem price rises in response to this increased demand.
If you serious about child poverty, you have to criticise government regulation: the dead hand of the Resource Management Act (RMA) on the poor and the vulnerable.
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