LINDSAY MITCHELL: What the Left constantly ignores

Here is the political argument from the Left:

"Poverty causes hardship for children. Whether the parent is working or on a benefit makes no difference. It's the lack of income that matters."

My argument is that the source of income matters. A lot.

Children in households with the same low income suffer hardship disproportionately if their parent is on a benefit.

I can speculate as to why. The beneficiary household may lack in budgeting ability. It may lack the discipline of the daily routine and obligations associated with working. It will probably stay at a low income persistently as opposed to temporarily. It may develop a sense of dependence versus self-reliance which transfers into a not-getting-around-to-it mentality; not maintaining a home, neglecting a child's needs, not paying bills on time and incurring debt. It may prioritise money on expenditure that is self-destructive such as substance abuse or gambling.

Of course, the Left will say all of the above is no more than an ignorant display of prejudice. Blaming the victim. Punching down. And given Maori and Pacific feature disproportionately among beneficiary households with children, it smacks of racism too. In fact, as one of the privileged, I have no right to an opinion.

But the criticism has never stopped me expressing one. And more importantly it hasn't stopped me searching for the evidence that politicians prefer to ignore.

MSD publishes a Child Poverty Report by Bryan Perry and has done so for many years. Since 2022 it has been biannual. I mention Bryan by name because I rate him, and his analysis should be the gold standard for all government departments in its thoroughness and neutrality.

The latest edition features a section on Children in 'working' and 'beneficiary' households. Rather than interpret (or misinterpret) I will quote him directly:

"The right-hand panel in Table E.4 to a considerable degree removes the impact of the income factor by looking only at households in the lower AHC income quintile (Q1). These low-income ‘working’ and ‘beneficiary’ households have hardship profiles that are a little less different than when looking at the whole income spectrum, though the children in low-income ‘working’ households are still better off (fewer restrictions / deprivations). The respective material hardship rates are 8% and 44% across all incomes and 17% and 47% when only those in the low-income zone (Q1) are considered – a rough means of controlling for income."

For children in poor working households, their material hardship rate was 17 percent; for children in poor beneficiary households, their hardship rate was 47 percent.

That is a significant difference.

The mean equivalised (for household size) income for the family with market income is $15,400. The mean equivalised income for the family with govt income is $15,600 - slightly higher. (Table E.5)

The hardship rate is derived from a list of deprivations/ restrictions such as foodbank use; inadequate income for basics; inability to keep house warm; delayed replacement or repair of appliances; borrowing from friends and family; no computer or internet; worn out clothing or shoes; inadequate protein or fresh fruit and vegetables etc.

Perry also looked at the liquid assets and consumer durables held by each low income household group and unsurprisingly found consumer durables considerably higher in households with market income. In his words, "working households have a higher level of resources to draw on." He suggests that a longitudinal dataset would be needed to examine income trajectories further.

In the past, longitudinal studies have shown households moving within income bands over time. This type of data shows up persistent versus temporary poverty. Given the high future years dependent expectation for children on, for example, the Sole Parent Support benefit, their poverty tends towards persistent. Hence it is harder to build assets and durables.

Based on the data above, a child in a poor benefit family is almost three times more likely to be in material hardship than a child in a poor market family.

Whatever the personal circumstances, it is impossible to build a broad-based case for children growing up on welfare rather than in a working household.

Repeatedly though left-wing administrations wilfully ignore the facts and implement policies that draw more children into long-term dependency. Jacinda Ardern was a prime example.

If the Left (Labour, the Greens, TOP and the Maori Party) was sincere about reducing child hardship, they'd stop ignoring crucial evidence.