Budget 2016: Help for struggling families comes at a price

Jess Berentson-ShawTax and Welfare

Best evidence suggests that to improve the lives of our poorest children, vulnerable families need policies that support them as “winners”, who given sufficient resources are capable of finding their own solutions for improving their children’s lives. Does the Budget 2016 recognise this evidence or are we investing in polices that continue to treat vulnerable families as ‘losers’?

It is hard to predict exactly what is going to come out of a Budget and especially what may come out of it to improve the live of families and kids living in the economic doldrums. We have some pre Budget announcements that we can examine and we can also make some predictions.

What has already been announced that affects families and kids living in deprivation?

Housing is the big issue of the moment (really of an entire generation). With 2188 families on the waiting list for social housing in immediate and desperate need for accommodation and another 1300 or on the list but deemed to be less of a priority (and that is just those that have made it onto the social housing list). There are any number of families living in garages and poor quality housing, and the cost of housing for the poorest families as a proportion of their income skyrocketing every year (it is currently around 35-40% for the lowest income families) surely something meaningful and comprehensive has to be done? The ‘Not a plan” plan we currently have can cut it no longer.

Announced to date is $41.1 million over four years on Emergency housing. However, this money (which turns out only to be enough to maintain the current emergency housing sector) offers little in the way of the housing and income solutions that those parents on low incomes need.

Safe, secure, healthy shelter is one of the basic human needs, not having it makes it almost impossible for people to focus on improving anything else in their lives. It is hard to realise your potential when shivering in a garage. Housing cannot be separated from sufficiency and security of income. The right type of shelter is only available to families when they have both secure, sufficient incomes AND there is sufficient affordable quality housing available. The growing need for emergency housing exists because neither of these issues has been addressed.

However the $12.6 million boost for Maori housing projects (taking total spend to $17.6 million per year) for new and affordable housing and housing repairs might get closer to offering meaningful solutions for those Maori housing families in need.

Lets hope the numerous stories of misery for families that have been emerging this week will spur the government into actually making a proper plan to address the needs for affordable housing across-the-board as well as their needs for income sufficiency.

We should not lose sight in all of this talk of social housing that the government currently subsidises private landlords to the tune of at least $1.2 billion a year in accommodation supplements for low-income families who are NOT in social housing. It is investor demand for housing (and the tax-free capital gain it offers) that is having significant negative flow-on effects; lets not mince words it is tearing at the fabric of our society. When 58% of our net wealth is housing (and that does not include the debt) we need urgent and meaningful action to move investors away from housing.

Another pre-Budget announcement is additional teacher aide funding (high need students will get an additional 5 hours of teachers aid assistance a week)

Economic deprivation and the stress associated with that is a critical factor in low educational attainment and behavioural issues for children. Our own research found that the educational attainment gap could be halved with unconditional income supplementation, as it allows parents to identify their children’s specific needs and address them accordingly. While more teacher aide funding is important to plug a gap, it does not give parents the tools to find their own solutions to issues driven by insufficient resources.

It is shocking that teachers are already paying out of their own salaries for additional help for low income students to stop them missing out on trips and food ($10million in the primary sector alone each year). Families and children who cannot cover their costs and are experiencing all the negative outcomes from the stress and lack of investment in their lives need interventions that will work.

What else do we think will be in the Budget for Families and Children?

We predict that the Minster of Finance’s ‘Social Investment” programme will be a clear focus for this year’s Budget. In brief this programme is a series of projects aiming to pull together as much information as possible about children and families at risk (that is those who cost the government the most in social and criminal justice actions by the time they reach age 35). This information (sitting in rather unappealingly named Integrated Data Infrastructure, as well as some other equally forgettably named systems) will be used to see what government policies are working and what are not, the aim being to reduce these costs (and hopefully improve lives).

Bill English has always spoken laudably of his desire to improve the outcomes of what he terms our ‘broken families’, yet the reality is that many of our families are not broken, they are just on the way to being broken by deprivation and an inability to participate fully in New Zealand society. Will the ‘social investment programme’ achieve improved outcomes for all children in this situation?

Well that all rather depends because such ‘tools’, which is essentially what the social investment programme is, are only as good as their design and their users.

The factors that will really determine whether the social investment programme will lead in time to the implementation of the BEST evidence-based programmes for improving outcomes for families and children are:

  • What programmes are currently being implemented and whether they are evidence-based or ideologically driven (bad data and poorly designed programmes in, does not automatically lead to meaningful data on effectiveness out)
  • Whether those operating the tool have the capability to recognise what data matters, what data is meaningful and how to get the best from it
  • What outcomes matter and to who? This is the key issue because if we select outcomes that have little meaning for families and are not clearly associated with improved outcomes for children (for example moving off benefits as opposed to achieving skills, higher paid work and high quality childcare at a time that suits parents and children) then the whole tool falls down as a mechanism to identify ‘what works for families’. It simply becomes a tool that identifies what works for governments based on their beliefs about what works.

These potential problems are NOT something that self-correct once the social investment tool is in operation. It needs to be designed in, to be a true ‘investment’ in the children of New Zealand. Because the true meaning of the word ‘investment’ usually applies to building assets, not just to minimising costs. Helping young people achieve their potential, building their personal capital is slightly different from stopping a small group of high risk individuals being a burden on the state. That brings us to the wider issue with the social investment approach.

Targeting is Problematic

The social investment approach is one in which targeting is king. It is ultra targeting. And Targeting has serious risks; the two most significant being stigmatisation of the poor (the results of which we already see in the public discourse) and missing the target altogether. Narrowly defined risk criteria for the most vulnerable require a detailed and intricate understanding of the lives and psychology of those being targeted. This costs a lot of money. What we know from the research is that the interventions that work best are less targeted and unconditional and involve additional cash. While insufficient resources are at the root of poor outcomes for families, the way in which a lack of resources produces poor outcomes for children is unique to each family and cash supplementation can account for this without having to target and risk missing the problem.

This is how one of the neuroscientists working with cash supplementation in the US explains it:

it is very possible that the mechanism by which poverty operates will be different for each family, whether it [unconditional cash supplementation] allows parents to buy more books for their kids, work fewer jobs to be around their kids more, or just reduces stress for a parent about how they’re going to pay the rentDevelopmental Neuroscientist Kimberly Nobel on researching the impact of poverty on children’s brain development

Each family’s needs and solutions differ and families are the best people to identify those needs.

The research indicates that a more cost effective investment approach is likely to be one in which we address poverty and stress in a universal manner, recognising the winning capability of most parents across our society, and then target what needs remains.

No doubt there will be surprises in the budget, lets hope they are positive ones for some families living in pretty miserable situations.

Jess will be discussing how this year’s budget is likely to affect vulnerable families and children at the PHA and CPAG Post Budget Breakfast Series on Friday the 27th of May.

Budget 2016: Help for struggling families comes at a price was last modified: June 21st, 2016 by Jess Berentson-Shaw
About the Author

Jess Berentson-Shaw

Dr Jess Berentson-Shaw is a science researcher working for the Morgan Foundation. Jess holds a PhD in Health Psychology from Victoria University. Jess has over 10 years’ experience working on applying science and evidence to public policy. She worked on improving the use of science in public health practice in NZ, before working as a Research Fellow at University College in London, where she researched how doctors and clinicians translate scientific evidence into their clinical practice. While in the UK she also developed a national data collection system, which was used to determine what factors contribute to poor outcomes for women and babies during pregnancy and birth. On her return to New Zealand she directed a research group that specialised in the independent evaluation and application of research and science to health policy and practice. Jess loves science and what it can do to make the world a fairer place.