Child Poverty Action Group calls on the government to recognise the growing underclass identified by the Salvation Army in its latest report "The Road to Recovery".

The report highlights that 12% more children are living in workless households now than just 2 years ago.

The recent living standards report from the Ministry of Social Development showed that in 2008 one in five New Zealand children were experiencing serious hardship or unacceptably severe restrictions on their living standards. The Salvation Army's report suggests that the number is now even higher.

"Playing with shifts in tax rates and GST to leave low income families 'no worse off' is just not good enough" says CPAG's economics spokesperson Dr St John. "Government needs to urgently engage in real redistribution to the poorest 230,000 children."

She says that more money through Working for Families can make a material and important difference. "It is time to recognise that excluding families from a significant part of their child payments because they lose their jobs is cruel and heartless. That is not done in Australia, where all low income children are treated the same.

"We know that many families miss out on full assistance for their children and are really struggling. The last thing they need is a GST increase."

Child Poverty Action Group joins with the Salvation Army in urging the government to see any economic recovery in people terms rather than just as business confidence indicators and GDP figures.

"We urge the government to use the opportunity provided by its tax reforms to improve incomes for beneficiaries with children by immediately extending the In-Work Tax Credit to all low-income children."