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Enhancing Food Security and Physical Activity for Māori, Pacific and Low-income Peoples870,000 dependent children. Checking with HES 2003/04, the number of childrenunder 15 in that year was 880,000, to which should be added dependent childrenaged 15-17. For illustrative calculations here we take 500,000 as being the number ofhouseholds with dependent children, and the number of dependent children as onemillion.There are advantages in targeting any subsidy at this group of households, andadvantages also in making the amount of subsidy proportional to the number ofdependent children. A good part of the concern about ‘food insecurity’ is concernabout food-adequacy for children in such households. Also, an eligibility criterionbased on the presence of children is administratively simple and is not stigmatising.An argument against is that it would require the setting up of a dispensing systemadditional to that already existing for the Community Services Card. Also foodinsecurehouseholds without children would not qualify. It has been claimed thatincreasing numbers of single people are using food bank services. 22The strongest arguments against targeting food subsidies at children in general arethat a ‘universal’ benefit’ is more expensive (unless total expenditure is spread morethinly), and that most of those receiving the benefit would not be in food-insecurehouseholds. In particular, ‘couple with children’ households are generally in the upperpart of the household income distribution. However, were household incomes adjusted(‘equivalised’), to allow for the number of persons in the household, and one-personand two-person ‘pensioner households’ set aside, this approach can be seen to berather better targeted. Also, any tax increase to fund the scheme would tend to fallrather more on better-off households. At a later stage in the discussion in this chapterwe discuss in more detail the issue of ‘equity’, in terms of household income(equivalised) and ethnicity, and of the extent to which payments based on number ofchildren are successful in targeting lower income and Māori, or Pacific peopleshouseholds.Question five: Should the amount of any benefit be capped?Yes. Once only part of the population is eligible, a failure to cap the amount, for agiven time-period, would lead easily to trading for profit with the non-eligible,discrediting the whole scheme n . Any capping would most easily be achieved byproviding a given dollar quantum at, say, weekly or two-weekly or four-weeklyintervals o , which could be credited immediately in total against qualifying purchases,rather than a given percentage discount allowed to cumulate up to the cap amount.Question six: What is a reasonable amount of benefit?For an approximate one million dependent children, a weekly amount of $5 per child(or $260 per year) would provide a useful supplement p to household income,particularly for low-income households more likely to be affected by food insecurity.The annual cost would be about $260 million. This fiscal cost is not negligible, butcould be justified in terms of tackling food insecurity, helping low-income familiesn One key informant mentioned anecdotal accounts of holders of the SuperGold card, which providesfree public transport outside rush hours for those aged 65 plus, lending their card to friends agedunder 65.o The more frequent the issue, the less the problem of expenditure being high in the first part of theperiod and inadequate towards the end.p Particularly for family incomes less than $500 per week, which could be expected to be the case formany ‘food-insecure’ families. The amount of $5 per week per child is a convenient number forcalculation purposes. Also it is not so large as to be fiscally improbable, nor lead to wide-scale trading ofthe subsidy.23
Enhancing Food Security and Physical Activity for Māori, Pacific and Low-income Peoplesfinancially, and encouraging better nutrition and improving food security throughincreased purchases of nutritious foods by families with children.Question seven: Are there any problems with inelastic price and incomeelasticities of demand?The proposed scheme is in effect an increase in income, though an increase whichhas to be spent on selected foodstuffs. There would certainly be some increase inconsumption of the qualifying foodstuffs, though not necessarily very much. Some ofthe savings from the scheme would be spent not on the selected foodstuffs, but onother goods and services, including other foods.Question eight: What ‘unintended consequences’ might there be?Increased demand for the selected foodstuffs would drive up their prices, thoughperhaps by not very much given the generally low price and income elasticities forfoodstuffs. Persons not qualifying would pay relatively more, and their purchases ofthese foodstuffs would fall. There is a possible issue here for pensioner households,although the evidence is that food insecurity is a problem for only a small proportion,only one or two percent, of those aged 65 and over. 23 Over the longer term, marketsupply of the selected foodstuffs could be expected to increase, moderating initialprice increases.Equity implications of the proposed interventionsIntervention One: Removal of GSTRemoving GST on foodstuffs, or on a specific category such as Fruit and Vegetables,in effect subsidises purchases for the whole community. As discussed earlier, thismeans that much of the subsidy goes to high-income households. The proposedintervention may reduce both ‘income inadequacy’ and ‘food insecurity’ rather more atthe bottom end of the income distribution, but does not do much at all for equityoverall.Intervention Two: Smart Card, or VouchersA ‘Smart Card’ scheme would provide qualifying households with discounts onqualifying foodstuffs. It has possibilities for both reducing food insecurity andimproving the nutrient quality of purchases. Three different possibilities wereproposed earlier in this chapter for defining the ‘eligible’ population q . The first was thatthey should comprise ‘beneficiary’ households. This would certainly have positiveequity consequences, but the problem is that non-beneficiary ‘food-insecure’households are not covered.A second possibility was that it should cover all households with income below aspecified ceiling. An obvious candidate would be to make the eligibility criteriaidentical to those for a Community Services Card r .q A fourth possibility is making the eligible population those households who apply for the TemporaryAdditional Benefit (see chapter on Full Benefit Entitlements). It seems unlikely this would be asatisfactory approach, because of ‘take-up’ problems with that benefit, because the problem is often not‘temporary’, and because food insecurity is a problem for a proportion of non-beneficiary households aswell.r Cards are issued to adults in family units. Their primary use has been to obtain higher subsidies ondoctors’ fees and prescriptions, but the progressive roll-out of PHO (Primary Healthcare Organisation)funding in recent years has much diminished their value for this purpose, and they could be phased outsoon as a means of obtaining primary health service subsidies. 2124
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