“The form of law which I propose would be as follows: In a state which is desirous of being saved from the greatest of all plagues—not faction, but rather distraction—there should exist among the citizens neither extreme poverty nor, again, excessive wealth, for both are productive of great evil ... Now the legislator should determine what is to be the limit of poverty or of wealth.”
Greek philosopher (427-347 B.C.)
The Early Days
While growing up, New Zealand gave the impression that it had a moral and honest society, and its people seemed to have a reputation for being innovative, laid back and most importantly fair- we even had, and still do have, a consumer rights show called 'Fair Go'.
It appears that during my 28 years, the problems that our society face both economically and socially, have gradually gotten worse. Many have found that our social and economic problems are linked with the levels of inequality in our country and the failure of Neo-liberalism.
Establishing
In 2011 a report by Bill Rosenberg- Policy Director and Economist for the New Zealand Council of Trade Unions, came out, titled: "Inequality in New Zealand - How Bad? Does it matter? What can we do about it?”. This report included evidence that New Zealand is one of the most unequal countries in the high income world.
ONE
OF THE MOST UNEQUAL COUNTRIES IN THE HIGH INCOME WORLD
Gini
coefficient – measure of inequality
0
= Everyone equal, 100 = One persone has all the income
This graph in Rosenburg's report, which he obtained from the
Organisation for Economic Co-operation and Development (OECD), shows
that New Zealand had the fastest rising income inequality in the OECD
in the 1980s and 1990s. The report also went on to claim that currently, New Zealand has around the 10th
highest income inequality out of 34 countries in the OECD.
These alarming statistics show that inequality is at a high level in New Zealand, especially compared with fellow OECD countries.
Going Backwards
To be able to understand why New Zealand has such a high level of inequality, it is essential to identify when the gap between the rich and poor, began to grow at such a rapid rate and considering the above statistical graph, it is fair to say this rapid rate took off in the 1980's.
In 1984, The David Lange led Labour Government introduced major changes to NZ's economic and social policies as a result of the large government debt, which had been accumulated under the previous Government, that being Robert Muldoon's National Party. These changes could be identified as neo-liberal policies. Policies that could at the same time, be seen in the United States under Ronald Regan, and in United Kingdom under Margaret Thatcher . These changes were, er..."sold" by treasury through a report to the then Minister of Finance, Roger Douglas who resultingly became the face of Neo-liberalism in NZ. These radical changes became forever known as "Rogernomics". Changes included free market reforms, the corporatising many government departments with a look towards privatising them, the removing of farming subsidies, and the selling of state assets, such as 'Air New Zealand', while dramatically reducing the Governments role and size.
As a result of these changes the stock market soared and property speculation rose. While the implementing of neo-liberal ideas such as privatisation, deregulation and trickle-down admittedly did bring prosperity for the rich, the rest, that being the majority, found themselves floundering. Large rises in unemployment occured and also the shrinking of the size, impact and influence of the state, saw many lose their livelihoods.
Going Backwards
To be able to understand why New Zealand has such a high level of inequality, it is essential to identify when the gap between the rich and poor, began to grow at such a rapid rate and considering the above statistical graph, it is fair to say this rapid rate took off in the 1980's.
In 1984, The David Lange led Labour Government introduced major changes to NZ's economic and social policies as a result of the large government debt, which had been accumulated under the previous Government, that being Robert Muldoon's National Party. These changes could be identified as neo-liberal policies. Policies that could at the same time, be seen in the United States under Ronald Regan, and in United Kingdom under Margaret Thatcher . These changes were, er..."sold" by treasury through a report to the then Minister of Finance, Roger Douglas who resultingly became the face of Neo-liberalism in NZ. These radical changes became forever known as "Rogernomics". Changes included free market reforms, the corporatising many government departments with a look towards privatising them, the removing of farming subsidies, and the selling of state assets, such as 'Air New Zealand', while dramatically reducing the Governments role and size.
As a result of these changes the stock market soared and property speculation rose. While the implementing of neo-liberal ideas such as privatisation, deregulation and trickle-down admittedly did bring prosperity for the rich, the rest, that being the majority, found themselves floundering. Large rises in unemployment occured and also the shrinking of the size, impact and influence of the state, saw many lose their livelihoods.
"The rich run a global system that allows them to accumulate capital and pay the lowest possible price for labour. The freedom that results applies only to them. The many simply have to work harder, in conditions that grow ever more insecure, to enrich the few. Democratic politics, which purports to enrich the many, is actually in the pocket of those bankers, media barons and other moguls who run and own everything".
― Charles Moore (English journalist and authorised biographer of Margaret Thatcher).
Health
An article by John Minto, titled Inequality linked to social problems, refers to a Victoria University held forum on inequality and social problems, where they examined and investigated the thesis of a book called 'The Spirit Level: Why More Equal Societies Almost Always Do Better' by English academics Richard Wilkinson and Kate Pickett. During this forum, Otago University’s public health Professor, Philippa Howden-Chapman spoke of how the infant mortality rate in New Zealand before the mid-1980s was at a similar level to Denmark, but was now, almost twice as high as the Scandinavian country. She also said : "the period when our income inequality started to rise very rapidly ... [has] ...a strong association with the way this terrible disease took off in New Zealand. It should not occur in a developed country."
The article also says "(Howden-Chapman) suggested the rise was due to families becoming poorer and moving into smaller and more crowded housing where infectious diseases such as meningococcal spread more rapidly".
Minto goes on to say that the man administering the forum was Victoria University’s Head of Policy Jonathan Boston and Minto quotes him saying: "My personal view is that we can have some confidence that more equal societies - other things being equal - have better social outcomes across a range of measures. It may not be absolutely conclusive, but I think it's reasonably persuasive."
The essence of Johnathan Boston's conclusion, that being: more equal societies have better social outcomes, echos the soul of Wilkinson and Pickett's book, where the above graph comes from, and this echo is growing louder too. 
The stream flows up
I recently saw a new documentary made by the award-winning Bryan Bruce, the man behind 2011's 'Inside Child Poverty' documentary. Bruce's new 'INSIDE NEW ZEALAND' documentary 'MIND THE GAP - A SPECIAL REPORT ON INEQUALITY' aired on tv3 in New Zealand in August 2013. It identified, not just that New Zealand had a large level of inequality, but that greater equality makes societies stronger. The documentary also showed how the large level of inequality in NZ affects not just both ends of the financial spectrum, the rich and the poor, but everyone in between too.
One Neo-liberalist idea that has caused such high inequality in New Zealand is the concept of "Trickle Down". Intended to make things better for all of us, "Trickle Down" simply hasn't worked out that way. Instead of tax breaks to the wealthy eventually trickling down to everyone else, through investing and creating more jobs, the opposite ("Trickle Up") seems to have happened. The video below is an excerpt from 'MIND THE GAP', where documentarian Bryan Bruce interviews three professors on "Trickle down": Prof. John Quiggan from the University of Queensland, Prof. Ha-Joon Chang from Cambridge University, and Prof. Robert Wade from the London School of Economics.
The Neo-liberal policies in New Zealand which began with "Rogernomics" in the 80's, are still in force today. With levels of inequality continuing to rise because of them, so do our social and economic problems. Even David Lange, the Prime Minister that oversaw the implementing of Neo-liberal policies, later reflected on them in 1996. He said: "For people who don't want the government in their lives, Rogernomics has been a bonanza, but for people who are disabled, limited, resource-less, uneducated, it has been a tragedy".
It is clear different ideas are needed to combat such problems. Possible solutions such as the Robin Hood Tax, Capital Gains Tax and also Co-Operative Businesses are positive and proactive suggestions that could give us all a chance to be better off.
“The greatest country, the richest country, is not that which has the most capitalists, monopolists, immense grabbings, vast fortunes, with its sad, sad soil of extreme, degrading, damning poverty, but the land in which there are the most homesteads, freeholds — where wealth does not show such contrasts high and low, where all men have enough — a modest living— and no man is made possessor beyond the sane and beautiful necessities.”
American poet (1819-1892)
Hi Liam, your analysis is very in detail. It contains pictures, video, graphs and cartoons. You analyze your topic in several aspects which makes your logical point more clear. New Zealand has a honest and friendly society which shows in many aspects. From my point of view, i have a strong feeling with the health aspect. I think that's one of the most important reasons that more people tend to immigrates to NZ. Under NZ's society, people feel under protection.
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