Measuring Poverty in New Zealand

Robert Stephens, Charles Waldegrave

Various studies attempting to measure poverty in New Zealand have failed to provide an independent measure of poverty or income inadequacy, or the kinds of statistical details required by policy makers on the extent and severity of hardship and which households are likely to be poor.

This paper sets out the New Zealand Poverty Project’s method of establishing a poverty line using focus groups to establish a consensual-based poverty measure. This employs a minimum adequate household expenditure notion of poverty, but relates it to living conditions and social attitudes of the 1990s.

We show how the poverty measure is related to Statistics New Zealand’s Household Expenditure and Income Survey (HEIS), using equivalent household disposable income. We then discuss the incidence, severity and structure of poverty, and identify the household groups that are poor, along with the efficiency of state assistance in reducing poverty. This is followed by an analysis of trends on both income distribution and incidence of poverty from 1984 to 1993.

The paper concludes that the social security system has been effective for reducing poverty among pensioners and households without children, but less effective for those with dependent children.