The Child Poverty Action Group (CPAG) is about to return to court for the third time arguing that the In Work Tax Credit should go to beneficiary families. The group has an opinion piece in today's DomPost:New Zealand continues to grapple with a poor track record for child poverty and particularly the rising inequality affecting our poorest children. More
An opinion piece from the Child Poverty Action Group (Dominion Post, May 28) is prefaced with a statement that the group is back in court this week trying to get Working for Families extended to those getting benefits. Children in beneficiary families do receive Family Tax Credits, part of the WFF package. What they don't get is the In Work Tax Credit (IWTC) specifically for parents who work.
The IWTC was created by the last Labour government which believed the best way out of poverty, including for children, was through paid work. It reflected the extra costs of going to work and the often negligible gap between income from low-paid work and income from a benefit.
Research from the OECD (whose experts assisted the government at the last defence of this policy) has shown that reducing child poverty simply by lifting benefit payments increases the number of workless homes. In short, paying the IWTC to children in benefit homes will lift their income in the immediate future but won't eliminate the source of their ongoing poverty - parental unemployment - in the long run. That's why the Human Rights Tribunal ruled,"...the discrimination caused by the exclusion of beneficiaries from the In Work Tax Credit is demonstrably justified."
CPAG refuse to accept this and continue to throw good money after bad fighting the decision. It could probably be better spent on practical measures to reduce hardship amongst poor children.