Tax Changes to Help Fight Poverty

August 29, 2012 New Zealand Taxation

Child PovertyThe government has been told to introduce a “universal child payment” system and raise the tax credits available to low income families in order to combat child poverty in New Zealand.

Nearly a quarter of all children in New Zealand are living in poverty and the government needs to implement a universal child payment system to help address the situation, according to a report released by the Children’s Commission on August 28th.

The Commission recommends that the government instate a universal child payment system which would pay low income households between NZD 125 and NZD 150 per child under the age of six.

The situations of New Zealand children living in poverty would also be improved if the government increased the tax credits which are available to low income families, as, according to the Commission, the currently available tax credits favor small families, with large households receiving proportionately less assistance.

As an interim measure to ensure the well being of children in poverty, the government was recommended to establish a food in schools program in order to ensure that children living in poverty were still fed during the day.

Commenting on the recommendations made by the Commission, the social development spokeswoman for the Labour Party Jacinda Ardern said that the government needs to take immediate action to reduce child poverty by at least 30 percent within the next 10 years.

The Prime Minister of New Zealand also commented on the Commission’s suggestion to implement a universal child payment, saying that the government already has a targeted system for helping low income households, and the idea of a universal payment is “dopey”.

Photo by RMLondon