State of the Family – a Report Card
7 November 2011

Dunne: make families as important as the economy

UnitedFuture leader Peter Dunne, the architect of Income Sharing, says New Zealand is paying lip service to families’ real needs as he called for an annual report card on whether families are being helped or hurt by government policy.

“And that needs to start by measuring the way policies impact on families with the same vigour that Treasury measures economic impacts of policy and law.

“It is just not happening for families in any meaningful way, and when it is done, it is given very little weight in government thinking.

“This needs to change,” Mr Dunne said.

“When was the last time you saw a policy dropped because it made life harder for families?” he asked.

“Families are too often an after-thought in New Zealand politics, and as a result they are constantly batted around.

“All the right sound bites are produced; all the buzz words are used, but in the end I do not think anyone can seriously say that New Zealand families are at the top of the economic agenda.

“Our accountability cannot be all for the economy and very little for the family.

“In the end, the economy is there to serve New Zealand, and that means to serve our families, and not the other way around,” he said.

In releasing the State of the Family Report Card today, Mr Dunne said there needs to be some “serious rethinking” of how New Zealand supports families.

The report card includes assessments of the cost of raising children, household income, housing affordability, access to healthcare, educational outcomes and work/life balance.

“There may well be others – but we need to move measures such as these to the top of the political agenda, and not leave them at the bottom,” Mr Dunne said.

The full Report Card on the State of the Family can be found below.

The report card concept is based on a British initiative implemented as part of the current Conservatives / Liberal Democrat coalition deal.

Other key family-focused UnitedFuture policies include Income Sharing (which is now half-way through Parliament), and Flexi-Super (allowing eligibility to superannuation from 60 to 70, with compulsory KiwiSaver in place).

 

State of the Family – a Report Card

An annual publicly available report on the issues affecting New Zealand families

Introduction:

For generations, New Zealanders have taken it for granted that this country is a great place to raise a family and bring up children. But is it?

We consistently report on the state of the economy and our fiscal position; however, we do not yet do this for our families. UnitedFuture is proposing a simple, easy-to-read report card be published on an annual basis that will evaluate the state of our families and the issues affecting them.

Each year the Families Commission will run a ruler over a number of key indicators on how good a place New Zealand is today for families and our children. New Zealand’s performance in each area will be given a grade, which can be used to judge progress as time goes on. It is hoped that this will assist NGO’s, community groups and the general public to engage with government to develop future policy that addresses issues highlighted within the report.

Key indicators are:

  • The Cost of Raising a Child
  • Household Income
  • Housing Affordability
  • Paid Parental Leave
  • Family Violence
  • Access to Healthcare and Medicines
  • Affordability of Pre-School Childcare
  • Primary Educational Outcomes
  • Work/Life Balance
  • Fathers in Children’s lives

The Cost of Raising a Child

It costs parents between 17 and 20% of the average weekly income to raise a single child. The move from a dual-income young couple without children, to a single income family with children actually puts many people below the poverty line. Given that New Zealand needs parents to produce the next generation of our citizens, this can never be an acceptable situation. While Working for Families has improved the lot of such families to an extent, the choice made by many parents to act as stay-at-home carers, goes largely unrecognised and unrewarded.

Grade: D

Household Income

Over the recession of the past two or three years, average annual household income fell slightly from $78,019 in 2008/09 to $76,584 in 2009/10. Compared with 2006/07 however, average annual household income rose significantly, up 11.5% from $68,710. So it can be said that New Zealand is generally heading in the right direction. However, by far the greatest change to household incomes has been the impact of the Budget 2010 tax changes that came into effect last October. Using the example of a family earning the average household income of $76,000, with two children (and receiving Working for Families) and repaying a mortgage of $300 per week, this household is better off by $45 a week under the new tax rates.  Even with the increase in GST costing them an extra $21 per week, this typical household is still almost $25 a week better off, or $1300 per year.

Grade B

Housing Affordability

Stable families need stable housing. The cost of a mortgage on a median priced house represents 55-60% of a median single income. That is not sustainable for many families. Even when taking into consideration the income of the entire ‘household’, it takes 37% of the median take-home household pay to service the mortgage on a median-priced house. It is only in the recent recession, that this figure has fallen below 40%, which is considered ‘affordable’. Provisions within the government-run KiwiSaver scheme allow those with at least 5 years of contributions to draw down on their savings to contribute towards the deposit on their first home. Recent changes to the treatment of residential housing in tax regulation have also done a lot to improve the affordability of housing; however, trends suggest that this will not last long. 

Grade: C–

Paid Parental Leave

New Zealand was a late starter in joining other developed countries in introducing paid parental leave, when it implemented a 12-week policy in 2002, which it extended to 14 weeks in 2005. While New Zealand couples are entitled to transfer parental leave between them, we still lag behind most European countries which offer up to 52 weeks paid parental leave, often at 100% of income. New Zealand’s maximum entitlement of $402.36 a week is less than the minimum wage.

Grade: C-

Family violence

Statistics show that family violence is one of New Zealand’s most pressing social issues in terms of the number of people affected, long term effects to people’s lives and the financial and social cost to the country. Nearly half of all homicides in New Zealand are family violence. Police are called to around 200 family violence situations every day, but estimate that only 18% of incidents ever come to their attention. Half of all violent crime is family violence.

Government funded media campaigns such as the ‘It’s Not OK’ campaign and the recent emphasis on the reporting of family violence situations has raised awareness, however we have a long way to go before we get on top of this issue.

Grade: D 

Access to Healthcare and Medicines

In real dollar terms, health spending per capita in New Zealand is lower than the OECD average. Despite this, New Zealand spends a greater proportion of GDP on health than the OECD average. Most developed countries in recent decades have improved life expectancy, reduced infant mortality and recorded a decline in the rate of smoking. In these respects, New Zealand is no different. However, New Zealand is facing an obesity epidemic, with 26.5% of adults being clinically obese (the third highest rate in the OECD). This will have huge flow on effects with regard to diabetes, asthma and cardiovascular disease.

Since its establishment in 2007, the new National Medicine Strategy, Medicines New Zealand has provided a far more clear and coherent approach to managing access to and funding of, new and innovative medicinal outcomes for New Zealanders. An additional $60m has been invested over the past two years, which means that a quarter of a million Kiwis are receiving government subsidised medicines they wouldn't have got two years ago. The number of Government-funded prescriptions has risen by 1.5 million since 2009, indicating that more New Zealanders are receiving funded medicines.

Grade: B-

Affordability of Pre-School Childcare

Since July 2007, the government has provided 20 hours of free early childhood education or care for three and four year olds. In addition, a childcare assistance subsidy is provided to offset pre-school childcare cost, depending on household income and the number of children. This subsidy can be as high as $3.67 per hour of childcare. However, the sudden increase in demand for places in centres that offer 20 hours per week for free, has resulted in insufficient capacity and in many cases, waiting lists have developed.

Grade: B

Primary Educational Outcomes

In international comparisons, New Zealand primary-age children are broadly strong in reading literacy, weak in science and average in mathematics. Despite achieving internationally credible outcomes in primary education, there is evidence that too many children are still ‘slipping through the cracks’ and reaching secondary school without even the basic skills required to progress.  A widely agreed method of improving primary educational outcomes is reporting the progress of a child’s learning. The Government has brought in just such a system with the introduction of National Standards, however its implementation has caused considerable angst within the education sector and confusion among parents. 

Grade: B–

Work/Life Balance

On average, New Zealanders work 1729 hours per year. That is slightly higher than Australia, but slightly lower than the OECD average. As with the rest of the developed world, New Zealanders have realised that flexible working hours hugely benefit individuals, families, communities and society as a whole. According to a Department of Labour survey, flexible start and finishing times are available on a regular basis to some or all staff in 63% of workplaces. The Employment Relations (Flexible Working Arrangements) Amendment Act 2007 was introduced to increase the availability and take-up of flexible working arrangements, however research shows that only about two thirds of employers and 40% of employees are aware of the Act.

Grade: B

Fathers in Children’s Lives

The increasing prevalence of fatherless children as the result of relationship breakdown is an extremely concerning trend in New Zealand. Nearly one in three children grows up in a house without both their biological parents. More often than not, it is the dad who the kids do without, while many do not even know who their father is. In the case of boys in particular, this can be very detrimental. It has been proven time and again that a strong male role model is critical to a young male’s development.

While the Government cannot control the causes of broken relationships, it can do a much better job in keeping both parents fully engaged with their children once the break-up has occurred.

Grade: C-