Influence: Low Wages Economic and political
One economic factor that contributes to child poverty in New Zealand is that of low wages and income, “in 2014 260,000 children were living off their families income being less than 60% of New Zealand’s median income (after housing costs). Many parents supporting children in New Zealand do not receive a sufficient income in order to support their families, “average family incomes are low by OECD standards and child poverty rates are high”. The minimum wage in NZ has just been raised to $15 and in a typical 40 hour week this amounts to a mere $565 dollars after tax per week. However those living in poverty often can work around 60 hours a week to try and make ends meet which amounts to $849 dollars a week. Those earning such low incomes often can’t keep up with the rising living costs, as wage increases don’t come around fast enough to match these increases. Minimum wage increases are of little benefit to if employers still use zero hour contracts or contracts without guaranteed hours, which the majority of those living in poverty are on. Union Unite director Mike Treen believes “The entire benefit of a pay rise can be lost for someone on around 20 hours a week if they lose only one hour's pay."
One large cause of child poverty in New Zealand is the huge cost just to have a place to live. The housing market has skyrocketed in the past few years with the average rent price for a 3 bedroom home in Auckland being $460 a week. Having a free market in NZ has meant that landlords are able to demand any rent price they desire for their property. This means being able to rent a house adequate to the amount of family members in near nigh impossible when the housing market is in such high demand. The average rent one can expect to pay for a three bedroomed house in Auckland in the current market is approximately $500.00 - $600.00. This makes it hard to fund other necessities that the child needs. The priority A waiting list for state houses in NZ has risen 31.1 % from January 2014 to January 2015. This high percentage increase can be largely blamed around the selling of state houses to cut down on government debt. John Key stated that the government aim to “sell between 1000 -2000 states houses” during 2015. Manurewa resident Ian Jones believes “ he is just coping to provide for his 5 children… selling my state house will make this no longer possible.”
Influence: Introduction of GST
Goods and Service tax was introduced in October 1986 at a rate of 10% then increased again in 1989 to 12.5% then lastly to 15% in 2010. This means that we have to pay an extra 15% on all goods and services we purchase which can add up to be a large expense for people with a low disposable income. The obvious and generally the only way to still obtain the necessities when the price increases is to choose the cheapest option,…