Treasury has made a coding error in its modelling of projected changes in child poverty.
“The error in our microsimulation modelling affects our assessment of both the Families Package announced in December 2017 and comparisons with the previous Government’s Family Incomes Package announced in May 2017,“ says the Secretary to the Treasury, Gabriel Makhlouf.
“The error likely led to an overstatement of the projected impact both packages would have on the reduction of child poverty.
“It affects our projections of the number of children expected to be in low-income households, and the number to be lifted out of poverty*, by 2020/21,” Mr Makhlouf says.
“The extent of any change in the projections on child poverty is still being determined. Because the error applies equally to comparisons with the previous Government’s Family Incomes Package, the estimated relative impact of the two packages is essentially unchanged,” Mr Makhlouf says. . .
The projections were that National’s package would lift around 50,000 children out of poverty and Labour’s would lift an additional 38,000.
The wording of that sentence is deliberate. There’s been a lot of congratulatory media releases from government supporters claiming it would lift 88,000 out of poverty when the truth is the lives of more than half of those would have been improved by National.
I’m not saying only another 38,000. Even one person having an improved life is good, and 38,000 – or whatever number Treasury’s new projection comes up with, is better – it’s just that the government can’t take all the credit.
Beside giving parents more won’t automatically make their children’s lives better.
As students in Wellington have found, being given $50 a week has led to rent increases which leave them with little or no extra money.
Even if parents don’t face rises in the cost of necessities and any other adverse eventualities which impact on their incomes or outgoings; even if they don’t waste a cent and even if they have superb budgeting skills, money isn’t all that matters.
The causes of poverty are complex and no matter how good projections on numbers are, they are only projections that won’t and can’t take into account all the individual circumstances which leave families with too little for their needs.