Friday, February 08, 2013

"Inequality: A New Zealand Crisis"

A new book about NZ's rising inequality is due to be published in May this year. It's by Wellington journalist Max Rashbrooke. He wrote an article for an international project known as Sustainable Governance Indicators (SGI) which is here. Gives you an idea of how the book will pan out.

In New Zealand, a widening gap between the rich and the rest threatens many of the country's greatest strengths, writes Max Rashbrooke, who argues for a new settlement of welfare...
New Zealand's recent history has been marked by an increasingly punitive approach towards beneficiaries, despite evidence of their strong work ethic and desire to fill jobs if they are available.
A more humane – and ultimately more productive – approach would be to invest in them as well, by increasing benefits to enable them to participate better in society, and by matching that with greater investment in personalised retraining and job placement programmes, in order to tackle the low skills that prevent many from rejoining the workforce. This could be funded by higher – and thus fairer – taxes on those who have done well while enjoying the benefits of our common investment in roads, healthcare, education and other public services.

(Hat-tip Gordon Campbell)


Mark Hubbard said...

Mr Rashbrooke needs to read my latest post: The Gulag of Redistribution and Equality.

JC said...

A couple of points in the article stand out for me..

First, like the Global warmers he picks his point in time to make his points, ie, the last 30 years.
If he were to start his essay at the time of the 1930s when NZ was one of the richest countries in the world and started its world first welfare state, and followed it through to 1984 he would have seen the slow collapse of the economy as we slid from 1st or 2nd in the world to about No 18 in the OECD.. the only thing that grew in the latter part of that golden period of egalitarianism was unemployment, more welfare, bigger government, tariffs, import controls, subsidies, morbid environmentalism, anti-nuclear controversy and a nation increasingly isolationist.

The next period to consider is the reforming period of 1984-1995 when some of the above problems were tackled, and from there 1996 to 2009 when we actually took some large "social dividends" and started going backwards again with a top heavy state.

The authors only real references to the "good" periods are when the good ship NZ was actually listing and sinking under the weight of said social dividends without the economy to sustain them.

Second, and related to the first, the author's solutions are to repeat the worst excesses of the old failed social model that was unsustainable. He uses the siren call of increased taxes on the "rich" without realising these people have choices. Helen Clark tried it and $4 billion dollars promptly fled into untouchable trusts, housing and God knows how much more money fled the country or got sequestered from the tax man.

The siren call of higher taxes on the rich is nearly always a sign a nation has too big a government for the size of the economy.

In the word of our friends the environmentalists.. big govt is good, big rhetoric is good, big welfare is good and big taxes are good until it all becomes "unsustainable".


Lindsay Mitchell said...

All good points JC. He also approaches the subject from the philosophical view that individuals are failed by 'systems', never themselves. Determinism I think its called.

JC said...

"He also approaches the subject from the philosophical view that individuals are failed by 'systems'"

He's right, but not in the way he thinks:

Big Government has failed him.. as it always does, so have big spending on social issues, big taxes etc. In short, the welfare state of the 1930s ran out of puff around the 1980s when the national debt burden hit 75% of GDP.

Contrary to received wisdom from the young, the Baby Boomers put their shoulders to the wheel and spent the next 30 years getting rid of that debt.. thats where the savings and investments and potential welfare dollars went.. creating a platform for the Clark Govt to launch the next wave of social spending.


Anonymous said...

His world will eventually be empty of the people he would have pay for it - ground down by taxation that punishes effort. He and his ilk will usually be on the take rather than create side of the ledger. Investing in jobs is sensible but investing in welfare per se seems a dead end if its not leading to skills for those on welfare.

Inequality has always been with us because we are inequal no matter how much we might like to dream we are not. You can't legislate it away.


thor42 said...

"Inequality has always been with us because we are inequal no matter how much we might like to dream we are not. You can't legislate it away"

It is also the case that increasing benefits would make beneficiaries even LESS willing to work than they are now.
Orchardists ALREADY have to get people in from Fiji to pick their fruit. Dairyfarmers already have to get workers in from the Philippines.

FF said...

Trigger warning! Progressives about.

Victoria Uni, the Guardian, The Listener, "social issues", "inequality",- more moral status signalling from the usual suspects.

So much not to like.

Anonymous said...

the 1996-2009 period undid every single reform of Roger (who really didn't do much) and Ruth (who did more than anyone else but was only allowed one single budget).

NZ's problem is far too little inequality - millions of people who should be starving in the gutter are living large on other peoples' money - much of it borrowed.

NZ should not have any benefit system whatsoever, state houses, state schools, state hospitals and the rest of the utter failure of the second welfare state
should just be ended. Burn down the houses, hospitals, schools, end the benefits!

Baby Boomers put their shoulders to the wheel and spent the next 30 years getting rid of that debt.

Bullshit - selfregarding Baby Boomers with their crushing sense of entitlement are as much of the problem as anyone! Cheap housing loans with the cost subsumed by Muldoon's massive inflation. Free education (socialist indoctrination), free healthcare, state houses, and all the rest, ACC. And now they're all bludging on *National's* super when they should be starving in the gutter, and even ACT won't cut their benefits - hell Labour's super policy is better than ACTs!

They disgust me.

They must confound anyone who has even a grasp of simple arithmetic. We simply cannot afford any welfare any more

Generations Y and Z know that there will be no super! We don't go to state schools, we have private health insurance and student loans - or those whose parents love us enough make sure to send us to the UK or Aus for uni. We'd rather die than take a state house.

It's time for it all to end - time to let the budgers starve. From the state house kid on the DBP who somehow is PM, to the bludger on the dole, bludger mum on the DPB, codger-bludger on the National Super.

Stop paying it all. immediately

Maddy said...

I guess "Anonymous" you also fly over the state funded roaded system in your microlight too? Yeah, right! Presuming you walk on ratepayer funded footpaths, you and your selfish ilk will be the first up against the wall when those you would walk past, who are starving in the streets, decide they've had enough of your greed. Yes, I unashamedly collect super, having paid the biggest taxes of any generation to date, to pay for it. But I also give heaps back to the community as a volunteer - a concept you may not understand. Do you, "Anonymous", generate all your own power, or are you happy to utilise power systems provided by other people's taxes; do you provide your own water, waste water and sewarage system, or are you happy for the local ratepayers to provide the infrastructure for these services to you? I do these things. And if you don't, you're just a different type of bludger, eh? I think the world you would you describe as your ideal would be a pretty terrifying place for you were you to own your prejudices and drop your anonymity. Maddy, Rangitikei