Gareth Morgan is proposing a payout of $200 per week to all families raising a child under three, plus other increased benefits in a $3.3 billion per year package.
What happens when the child has their third birthday? A sudden drop in this type of income would be difficult for poorer families to adapt to – unless they had more babies to keep the income.
Payments of $200 a week to all New Zealand families raising a child under three and additional payments for low-income families are among proposals to tackle poverty in a book co-authored by aspiring politician Gareth Morgan.
Morgan said giving people more money was not only the most obvious way to help families, it was also the most effective.
In Pennies from Heaven, due out in March and co-authored by science researcher Jess Berentson-Shaw, it’s argued new ideas were needed to create a fairer country for all Kiwis.
The concept of a no-strings-attached cash injection into families’ weekly budgets aimed to remove the stressful, punitive conditions attached to the claiming of current benefits, which Berentson-Shaw said “cancelled out” the stress-relieving benefits of increased income.
A $200 a week “thriving child” universal payment for all families with a child under 3 years old was one of the book’s core proposals.
There’s some merit to doing as much as practical to give children the best possible start in life, as their first three years determines the likelihood of success or failure later in life. Failures cost society in a number of ways.
But poor families having a sudden reduction of income of $200 would have difficulty adjusting.
An additional basic income for lower-income families extending the current Working for Families in-work tax credit of $72.50 a week was also proposed.
It would remove the need for parents to work 30 hours a week (20 hours for single parent households) in the face of increasingly unstable hours and casualised labour in the job market.
That’s not clear – would it mean neither parent would need to work as long as they had young children?
Moving parents into work was only a viable solution once children were older and when the work was rewarding and adequately paid; and work-focused solutions for parents of young children should be de-prioritised, they said.
Sounds like work for parents would be optional. I’d have loved to have not have to have worked when I had young children, but this sounds a bit wacky.
Morgan and Berentson-Shaw acknowledged some people might find the idea of giving low-income families with young children unconditional cash “challenging”.
“Yet achieving a thriving, inclusive, and fair New Zealand is what many of us genuinely want no matter where on the political spectrum we sit.”
Calling it ‘fair’ does not make it fair, and does not make it an effective use of taxpayer money.
They calculated a “gold standard package” delivering free universal early childhood education, increased childcare subsidies for low-income parents for under-3-year-olds, the “thriving child UBI” and a basic income for low-income families would cost roughly $3.3 billion per year.
However positive social outcomes as a result of such a package would net New Zealand a $1.9b gain, they said.
I guess this puts some ideas out for thought and discussion. Social investment is a bit of a thing with Bill English championing it.
But the hard thing to answer is what is wise investment. Throwing money at families and setting them up to go broke when the handouts stop may not be the best way to invest.