MercatorNet | Family Edge | Family Breakdown Costs New Zealand 1bn A Year

Carolyn Moynihan | Wednesday, 22 October 2008

Family breakdown costs New Zealand $1bn a year

Erosion of the family in New Zealand is costing the country at least $1 billion a year, according to new research commissioned by lobby group Family First. The report, The Value of Family, estimates for the first time the fiscal impact of single parenthood, divorce and decreasing marriage rates in the small, South Pacific nation, and finds that the cost over the past decade amounts to $8bn. New Zealand’s gross domestic product is around $211 billion (US$128bn), making the cost of family breakdown equivalent to about 0.5 per cent of GDP a year.

Family breakdown in New Zealand reflects trends in many developed countries, but the nation of not quite 4.3 million people has one of the highest rates of non-marital births -- ahead of the United Kingdom, United States, Australia and Canada -- and sole parents outnumber married parents among families with children. Some 49 per cent of children (65,000) live in a sole parent household, and such households have five times the poverty rate of couple households. The report, by Dr Patrick Nolan of the New Zealand Institute of Economic Research, is not the first to point out the toll that poverty takes on children’s health and wellbeing. But it is the first to go behind “child poverty” to the family breakdown that contributes to poverty. It also looks at the role welfare policies may play in non-marriage, family breakdown and “poverty traps”, but finds there is a lack of empirical research to go on.

However, it finds that married couples can also fall into poverty traps, thanks to taxation steps and the abatement of assistance as income rises. Under current tax schemes in New Zealand, married couples from low income families would be up to $15,000 better off in terms of income in the hand if they separated, because of the interaction of family assistance programmes. “The government has created a system which contains perverse disincentives for parents to get married or stay married,” says Family First NZ national director Bob McCroskie.

What the report also shows indirectly is a lack of interest on the part of government and researchers in the fate of the family based on marriage. Moreover, national elections are just two weeks away and yet hardly a word has been said by any party on this subject. The report calls for programmes and services to reduce unwed pregnancy and to help prepare couples for marriage and support them during marriage. It also recommends research on the relationship between government policy and family form. ~ The Value of Family, Family First NZ, October 2008-10-22

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