Part 3: Oversight of the child poverty work programme

Effectiveness of arrangements for reducing child poverty.

3.1
In this Part, we assess the oversight of the child poverty work programme, including planning, measuring, monitoring, and reporting.

3.2
We expected to see:

  • clear roles, responsibilities, and accountabilities for reducing child poverty;
  • clear targets for reducing child poverty and an agreed way of measuring results;
  • regular monitoring and reporting of trends in child poverty measures and of inequities in the rates of child poverty;
  • regular monitoring and reporting of child poverty related indicators (the indicators);
  • a high-level strategy and clear plan for reaching the targets for reducing child poverty and inequities in the rates of child poverty, with milestones and time frames;
  • regular monitoring and reporting of the progress that the agencies have made in implementing initiatives; and
  • well-informed governance and oversight of the Strategy.

3.3
We also expected to see agencies working effectively with each other and with community-based organisations and groups to implement initiatives. We expected that Māori, Pasifika, those affected by disabilities, and other community groups would have regular opportunities to influence and inform governance and operational decisions. We discuss this in Part 4.

Summary

3.4
Roles, responsibilities, and accountabilities are well defined and Ministers and the agencies are clear about what they are trying to achieve. The agencies have worked well together to develop and support initiatives to meet the intermediate (three-year) targets.

3.5
The monitoring and reporting of child poverty measures and indicators are strengths. The reported information is widely used by public organisations and non-government organisations (NGOs). We heard strong support for Statistics New Zealand's reporting of the child poverty measures and for the Treasury's Budget Day Child Poverty Reports. We also heard that MSD's child poverty reports provide useful context.

3.6
The agencies have also provided the responsible Ministers and governance bodies with a wide range of information to support their role in planning, prioritising, and monitoring initiatives to reduce child poverty and mitigate the impacts of socio-economic disadvantage. There are many initiatives related to child poverty in progress by a range of public organisations.

3.7
However, despite the many initiatives under way, the Treasury's Tax and Welfare Analysis modelling suggests that current initiatives are unlikely to be enough to meet two of the income-based targets by 2027/28.

3.8
In addition, there is no plan that sets out whether there are dependencies between current initiatives or how they should be sequenced or co-ordinated with frontline services to maximise benefits. There is also currently no progress reporting on the implementation of the overall work programme to reduce material hardship.

3.9
In our view, without robust and integrated implementation planning and regular cross-agency reporting on progress implementing initiatives it will be challenging to govern and manage the overall programme well. This is needed for Ministers and the public to be confident that the goal of reducing the number of children living in material hardship will be achieved.

There are clear roles, responsibilities, and accountabilities for reducing child poverty

3.10
As discussed in Part 2, legislation provides a clear framework within which roles and responsibilities have been assigned to Ministers and the agencies. We found that Ministers and staff in the agencies understand their roles and responsibilities for reducing child poverty.

3.11
Established organisational structures support Ministers and these agencies to meet their governance responsibilities for the Strategy. Previous Ministers for Child Poverty Reduction were well supported at a Ministerial level by the Child and Youth Wellbeing Strategy Ministerial Group. The current Minister is now supported by the Child and Youth Ministers Group. The Child Wellbeing and Poverty Reduction Group has provided support at an agency level and has carried out its intended functions (see paragraph 2.38).

3.12
Significant initiatives under the Strategy have also had their own accountability arrangements, separate to those of the Strategy. For example, MSD led the Working for Families Review and reported to the Income Support Ministers.17 MSD's deputy chief executive for the policy function chaired the governance group for the Working for Families Review, which was made up of members from MSD, the Treasury, Inland Revenue, the Department of the Prime Minister and Cabinet, and the Ministry for Housing and Urban Development.

3.13
The Ministry of Education leads another child poverty-related initiative, Ka Ora, Ka Ako (the Healthy School Lunches Programme) and reports to the Associate Minister of Education. A new governance structure has recently been established to oversee the alternative school lunch provision model introduced as part of Budget 2024. It is made up of a Governance Board which is chaired by the deputy secretary of Te Pae Aronui (part of the Ministry of Education), as well as an operational steering group. We did not assess the effectiveness of these arrangements as part of our work.

Child poverty is measured and reported on regularly

There is an agreed way of measuring results and clear targets for reducing income-based poverty and material hardship

3.14
Although there is no official definition for child poverty, Ministers and the agencies use the definition that child poverty is being excluded from a minimum acceptable standard of living in one's own society because of a lack of adequate resources.

3.15
Researchers and officials widely accept that measuring child poverty is complex – multiple measures are necessary to provide a comprehensive view of poverty. Considerable thought went into ensuring that the 10 measures in the Child Poverty Reduction Act cover different aspects of child poverty, including income-based poverty (before and after housing costs), material hardship, depth of poverty, and poverty persistence. This multi-measurement approach is international best practice.18

3.16
Ministers and the agencies are clear about what they are trying to achieve in reducing income-based poverty and material hardship. The 10-year targets to 2027/28 for the three primary measures in use are ambitious. They aim to reduce the proportion of children in poverty by more than half.

3.17
Since July 2024, Statistics New Zealand has used the Household Income and Living Survey and administrative data from Inland Revenue and the Ministry of Social Development to report child poverty rates for all the measures.19

3.18
In addition, there are indicators that agencies will use to measure progress in reducing the causes of long-term disadvantage and hardship.

3.19
The Child Wellbeing and Poverty Reduction Group collates information on the indicators from:

  • the Household Income and Living Survey;
  • the Ministry of Education's School Attendance Survey and data on achievement;
  • the Ministry of Health's National Minimum Dataset; and
  • MSD's administrative data.

The agencies regularly report on changes in child poverty rates

3.20
The agencies are regularly reporting trends in child poverty measures and indicators.

3.21
The Government Statistician must publish changes in the child poverty statistics each year. Shortly after the Minister for Child Poverty Reduction receives the report, they must present a copy to the House of Representatives. If a target is not met, the Minister for Child Poverty Reduction must explain why to the House of Representatives.20

3.22
The Child Wellbeing and Poverty Reduction Group uses information it collates to put together a child poverty related indicators report that is also published and presented to the House of Representatives each year.21

3.23
Inequities in the rates of child poverty are also tracked to determine whether disparities are increasing or decreasing. The Government Statistician publishes child poverty estimates annually that can be broken down by ethnicity, disability status, and region. The annual child poverty related indicators report has also reported child poverty by ethnicity and, where possible, disability status.22

3.24
Appendix 4 summarises the legislative requirements for the measures and indicators. So far, all requirements to define, set targets for, monitor, and report on the measures and indicators have been met.

Reporting on child poverty measures is widely used

3.25
The reporting on child poverty measures is widely used by Ministers, the agencies, and NGOs. Many NGOs and other experts told us that they found the child poverty data on the Statistics New Zealand website easy to find and the child poverty report by MSD useful. Many also valued the Budget Day Child Poverty Report. However, because the measures are complex, the reporting is not as easy for the public to understand. We discuss this in Part 5.

3.26
Tax and Welfare Analysis modelling carried out by the Treasury has been used to forecast future child poverty rates. The Child Wellbeing and Poverty Reduction Group and MSD have used the Treasury's forecasts and evidence on what reduces child poverty to provide advice to Ministers on the priorities and next steps to meet the targets.

3.27
For example, Tax and Welfare Analysis modelling showed that relatively large reductions in child poverty could be achieved by increasing the main benefits, which led to successive increases to main benefit levels. Similarly, data showing that about half of the children living in material hardship are in working households led to recommendations to target both in-work households and those on benefits.

3.28
The agencies have also used the wider indicators to inform advice to Ministers about addressing the causes of poverty and/or mitigating the impacts of socio-economic disadvantage. For example, the Ministry of Education used this data to provide advice on improving school attendance, and the Ministry of Housing and Urban Development used it to provide advice on improving housing affordability.

Agencies provide a wide range of information to support governance and decision-making

3.29
As well as reporting on the measures and indicators, the agencies have provided Ministers and governance bodies with a wide range of other information to support their role in planning and prioritising initiatives to reduce child poverty and mitigate the impacts of socio-economic disadvantage.

3.30
This is consistent with the Children's Act requirements that:

  • the Strategy must include an assessment of the likely effect of Government policies to reduce child poverty or mitigate the impacts of socio-economic disadvantage; and
  • before adopting or changing the Strategy, the responsible Minister must have regard to the principle that policies should be informed by evidence about their expected effectiveness in achieving the social and economic outcomes sought by the Strategy.

3.31
To ensure that initiatives are well focused, there needs to be a clear understanding of the link between objectives, actions, impacts, and outcomes. The Department of the Prime Minister and Cabinet and MSD have developed this type of framework for reducing child poverty.

3.32
Decision-makers can use the framework to decide on the types of initiatives most likely to reduce child poverty. For example, the framework shows that material hardship can be reduced by initiatives that influence income from earnings or benefits, housing costs, assets, demands on the household budget, a household's ability to manage resources, and support networks.

3.33
The Department of the Prime Minister and Cabinet and MSD have effectively communicated this framework to Ministers. It is referenced in various briefing documents, including briefings to the incoming Minister for Child Poverty Reduction.

3.34
The agencies have collected and provided information to support the framework's implementation, including evidence on the nature and scale of the interventions needed to reach the child poverty targets and reduce socio-economic disadvantage.

3.35
The agencies have also provided Ministers with relevant information to inform their decision-making and monitoring for specific initiatives, such as the Working for Families Review and Ka Ora, Ka Ako.

3.36
The Treasury has also provided information, based on its Tax and Welfare Analysis modelling, to help decision-makers understand the likely impact of various child poverty reduction initiatives – such as Working for Families tax credits or the Child Support Pass-On23 – on two of the primary income-based measures, and make adjustments as needed.

3.37
The Treasury's Tax and Welfare Analysis modelling has also supported Ministers to set targets for two of the income-based primary measures.

3.38
The previous and current Ministers for Child Poverty Reduction all told us that they were satisfied with the information that they had received about reducing child poverty.

Some initiatives have been evaluated and the results have informed advice to Ministers

3.39
Before the Strategy is adopted or changed, the Children's Act requires the Minister for Child Poverty Reduction to have regard to the principle that the Government should evaluate the effectiveness of policies to achieve the outcomes sought by the Strategy.

3.40
The agencies have been involved in evaluating initiatives. For example, MSD led the evaluation of the Families Package. Positive findings from this evaluation informed advice about aspects of the Families Package (such as Working for Families and Accommodation Supplements) and options for Ministers to consider.

3.41
Other public organisations have also evaluated initiatives related to child poverty. Examples we heard about included:

  • the Department of the Prime Minister and Cabinet, MSD, and the Ministry of Housing and Urban Development evaluating the Rotorua emergency housing pilot;
  • the Ministry of Education evaluating Ka Ora, Ka Ako and the Early Childhood Education Food Programme;
  • Health New Zealand/Te Whatu Ora evaluating the Healthy Homes Initiative; and
  • the Energy Efficiency and Conservation Authority evaluating Warmer Kiwi Homes.

3.42
These evaluations have also shown some positive results and informed advice to Ministers about next steps.

Current initiatives are unlikely to be enough to meet targets

3.43
There are many initiatives related to child poverty in progress by a range of public organisations. Some of these are focused on growing household incomes, such as changes to tax credits and income tax thresholds. Other initiatives are relevant to addressing the wider causes and consequences of child poverty, such as increased childcare subsidies, food in schools, and employment-based initiatives. The agencies have worked well with each other and reported constructive working relationships on their joint initiatives.

3.44
Despite this, even if all current initiatives are successfully implemented, the Treasury's Tax and Welfare Analysis modelling for both the 2023 and 2024 Budget Day Child Poverty Reports indicates that two of the income-based targets are unlikely to be met in 2027/28. The Treasury cannot currently model how far initiatives will go towards meeting the targets for material hardship, but the current trend suggests that the 2027/28 target for material hardship is also unlikely to be met. Further interventions are likely to be needed to meet the 2027/28 targets for all three primary measures in use.

3.45
The Department of the Prime Minister and Cabinet has provided advice on the nature and scale of interventions needed to meet the child poverty targets. However, it is not yet clear what additional steps the Government will take to reach them.

Implementation planning needs strengthening

3.46
We expected to see a detailed cross-agency implementation plan to fulfil the Children's Act's requirement for the Strategy to reduce child poverty and mitigate the impacts of socio-economic disadvantage. Despite agencies' advice to Ministers on what a child poverty plan could look like, no such plan exists.

3.47
There is a list of current government policies and actions to reduce material hardship given in the Strategy,24 and agreed initiatives have been set out in the Budget Day Child Poverty Reports.25

3.48
In addition, many public organisations' strategies and high-level plans are broadly aligned with the goals of reducing child poverty and/or mitigating the impacts of socio-economic disadvantage. Appendix 5 lists examples of some relevant strategies and plans.

3.49
In our view, more work is needed to develop an integrated cross-agency implementation plan. This is important to ensure that the overall work programme can be governed and managed effectively. An integrated implementation plan would provide more clarity about how the initiatives will together help to reduce child material hardship. It could provide clarity about benefits, deliverables, dependencies, milestones, and time frames.

Without an integrated implementation plan, it is not clear how current interventions should be sequenced or co-ordinated

3.50
Cabinet has provided a mandate for collective agency action and accountability for reducing child material hardship. But without a robust plan, there is no clear pathway to achieve this.

3.51
It is not clear how individual initiatives should be sequenced or co-ordinated with each other, or with relevant frontline services (such as health and/or housing services), to support efficient delivery and maximise benefits. Co-ordinating and integrating initiatives with frontline services is particularly important for meeting the needs of those living with multiple socio-economic disadvantages (see Part 4).

3.52
The lack of an integrated implementation plan has consequences for how the work programme to reduce material hardship is governed and managed:

  • There is no whole-of-government timeline showing the order, phasing, or dependencies of initiatives that make up the work programme, when key milestones will be met, or when initiatives will achieve the targeted impact.
  • It is more challenging for public organisations to co-ordinate their work programmes and services with each other and with community organisations for the greatest effect.
  • There is less shared responsibility and commitment across public organisations for reducing child poverty.
Recommendation 1
We recommend that the Ministry of Social Development work with other public organisations on an integrated implementation plan to reduce child material hardship, setting out how initiatives should be sequenced and co-ordinated.

Regular cross-agency reporting is needed on the implementation of the work programme to reduce material hardship

3.53
As well as a lack of an integrated implementation plan, there is also a lack of cross-agency reporting on progress in delivering the work programme to reduce material hardship.

3.54
The regular monitoring and reporting of rates of child poverty using defined measures and indicators allows the work programme's impact to be tracked. However, it does not provide information about how relevant initiatives are progressing.

3.55
In our view, it is vital for good governance and management that reporting includes information on both the results of government efforts (using the child poverty measures and indicators) and progress with implementing the work programme to reduce material hardship.

3.56
Until recently, there was regular reporting on progress in implementing the overall work programme for the Strategy. When it was the system convenor, the Department of the Prime Minister and Cabinet used a regular work programme tracker and annual monitoring reports to update the Ministerial Governance Group and the Social Wellbeing Board26 on progress in implementing the Strategy, including initiatives related to child poverty.

3.57
This reporting has also been supported by annual reports on progress towards the Strategy's outcomes (required by the Children's Act) and various briefings on the progress that has been made to reduce child poverty. Individual agencies have also reported on the initiatives they are responsible for to their own Ministers.

3.58
However, reporting on the overall work programme for the Strategy has stopped. The annual implementation monitoring reports were discontinued after the 2022 review of the Strategy, when the first Programme of Action was retired. The work programme tracker was discontinued in mid-2023. In October 2024, the Cabinet Social Wellbeing Committee decided that officials would no longer be required to provide six-monthly reports to Ministers on the implementation of the Strategy.

3.59
There is also currently no reporting on implementation of the work programme to reduce material hardship. The focus is on monitoring changes in indicators of material hardship. At the Minister's request, the Child Wellbeing and Poverty Reduction Group recently established a quarterly "lead indicator dashboard" for material hardship. The first dashboard was available in September 2024 and aims to provide up-to-date data on indicators of material hardship and how they are tracking (for example, by showing changes in inflation, housing costs, and food bank usage).

3.60
Although the new lead indicator dashboard for material hardship provides insight on the impact of the work programme to reduce material hardship, it is not intended to provide a clear picture of progress with implementing the work programme.

3.61
We have been told that officials are finalising new monitoring and reporting arrangements for the implementation of the updated Strategy, including the work programme to reduce child material hardship. However, this is not in place yet.

3.62
We encourage the agencies to re-establish regular progress reporting on the work programme as soon as possible. At a minimum, this should include milestones and risks as the work programme progresses to enable public organisations to properly co-ordinate efforts and re-assess activities if required.

17: The Working for Families Review was part of the previous Government's wider Welfare Overhaul work programme. It involved reviewing four different tax credits (the Family Tax Credit, the In-Work Tax Credit, the Minimum Family Tax Credit, and the Best Start Tax Credit). The income support Ministers were the Minister for Child Poverty Reduction, the Minister for Children, the Minister of Finance, the Minister for Social Development and Employment, and the Minister of Revenue.

18: Perry, B and Ministry of Social Development (2022), Child Poverty in New Zealand, page 3, at msd.govt.nz and United Nations Children's Fund (2017), A world free from child poverty: Milestone 2 – Measuring child poverty, page 57, at unicef.org.

19: Before July 2024, Statistics New Zealand used the Household Economic Survey.

20: his has happened when the 2020/21 target for BHC50 was not met, and again when the 2023/24 targets for all three primary measures in use were not met.

21: In 2024, the child poverty related indicator report was integrated into the annual report on the Child and Youth Wellbeing Strategy.

22: The only indicator related to child poverty that can currently be reported by disability status is housing affordability. The other four indicators – regular school attendance, school achievement, children in benefit dependent households, and potentially avoidable hospitalisations – cannot be reported by disability status.

23: The Child Support Pass-On initiative ensures that beneficiaries receiving a sole parent rate of main benefit are not treated differently from other beneficiaries. It involves passing on child support directly from liable parents to sole parent beneficiaries instead of child support payments being kept by the Inland Revenue Department to offset the cost of sole parent benefits.

24: See New Zealand Government (2024), The Child and Youth Strategy 2024-27, at msd.govt.nz.

25: See Budget 2024 Child Poverty Report at budget.govt.nz.

26: The Social Wellbeing Board was a group of Chief Executives that helped to provide oversight of the Strategy. It was disestablished in late April 2024.