A journalist’s list of the ten most important issues politically facing us did not mention inequality and poverty. Why?

A month ago Fairfax political journalist Tracey Watkins listed the following ten areas to watch out for in the political year:

Spies (especially the review and resulting legislation)

Iraq (will the two year mission be extended?)

Ship Visits (from the US?)

Polls (how they will develop)

Tax Cuts (although I thought they were promised for 2017)

Surplus (are we going to get another soon?)

Water (trying to get a compromise between Maori and general public claims)

TPPA (the debate)

Housing affordability (the implications of the Auckland market cooling)

Social services (the government’s promised shakeup)

There is no mention of inequality or poverty among the ten despite it being a major issue a year or so ago. Has it lost its puff? I am not arguing that the items on the list are unimportant. But the omission surprised me.

Now Watkin’s is just one journalist’s opinion – albeit a senior journalist of one of New Zealand’s main media groups. But the likelihood is that she discussed it with colleagues and even showed the piece around before it was posted. So it probably represents the overall consensus among her colleagues. Did not one of them say ‘How about inequality and poverty?’ (And perhaps a few other things.)

Significantly, such lists affect the way that some of those who form opinion are currently framing the public debate, although you might argue that the compilers are such butterflies that in a few months – or even days – their list will be different..

There is a more insidious possibility. The list may not just reflect the journalists’ views. They are continually interacting (interviewing and gossiping) with the politicians and advisers who inhabit parliament and the Beehive. A reasonable interpretation of the list is that it reflects the obsessions of those politicos about what they have to tackle over the next few months (or days). If so, inequality and poverty are not among their major obsessions.

It would be easy to say that the groups who formed the list are on above-average incomes and hardly in poverty, so that they have little personal interest in such topics. It is more complicated than that. First, in every case on the list there is a concerned government agency. That is not true to the same extent for poverty and inequality. There are some very good experts in some agencies but they are not at the top of the agency thinking. (What about the Ministry of Social Policy, you ask? Yes, they have some experts but as the list shows, their concerns are the (costs of) delivery of social services.)

Second, the journalists and advisers must have decided that those concerned with inequality and poverty have little impact on politics. True, there are some very active groups – especially in Auckland – but they are not getting much traction.

Those committed to the egalitarian society – which was once New Zealanders’ pride – need to ask why their concerns have so little effect. A possible explanation is that, despite the rhetoric, the rise in income inequality occurred over 20 years ago, largely as a result of Rogernomics and Ruthanasia. I know many want to believe economic inequality is still rising in New Zealand, but the careful statistical work I have done shows little change in the distribution of market incomes in the last thirty years, and the big changes in after-tax incomes were about a quarter of a century ago.

This is not to contradict the findings of Piketty and all. The evidence is that the surge in top incomes and wealth has occurred where there has been a sophisticated financial sector such as in Britain and the US. Ours is plain vanilla; the top incomes it pays contribute to overall inequality but they do not seem to have been increasing faster than average – or not enough to show in the data.

Now it is very easy to say something like ‘we have had this inequality for over 25 years and society has not fallen apart, so why worry?’ The implicit message is that the poor are not a large enough part of society or not angry enough to rise up in wrath.. (My view is that if the poor are mainly children and their parents, the former don’t make good crusaders and the latter are too busy trying to cope with family pressures to man and woman the barricades.) In any case the complacent message from the list of ten is why worry about distributional issues (tax cuts for the well-off aside)? Things are going fine, aren’t they?

So should we worry about inequality other than as some sort of moral concern (it is certainly proper to have one) or a nostalgia for a past when things were more egalitarian? But there are also long term consequences of poverty, the companion of inequality which may not be immediately apparent but which is threatening the viability of the nation.

Today’s children of the poor have less opportunity than their fellow children and possibly less than their parents and grandparents had. I could write at length how this undermines the skill acquisition and citizenship which are necessary for a sustainable New Zealand (and how it adds to a health deficit). But instead, let me remind you that New Zealand was once a society of opportunity for just about everyone (women and Maori aside – we are doing better there). That may no longer be true. Is that what we want?

Comments (17)

by KJT on March 14, 2016
KJT

I think it reflects the fact that todays "Jonalists" and politicians, think that inequality and a class of poor is a good thing, so long as they can have tax cuts!

by Fentex on March 14, 2016
Fentex

I personally think inequality is a cancer we should try and excise.

Not just because it's existence is prima facie evidence that poverty is policy (through either markets not being free or the theory that free markets expand opportunity being false) but because it's divisive and destructive driving wedges between citizens and establishing tiers of success.

Wealth is power and both protect themselves, if we are sifted into different tiers of wealth the one on top won't be protecting those below them.

by Wayne Mapp on March 14, 2016
Wayne Mapp

Actually it is in the list, except it is described as Housing Affordability. In all western societies housing makes up at least 40% of total wealth. According to Max Rushbrooke in New Zealand it is 60%. So getting on the home ownership ladder is a crucial element of reducing inequality, both between generations and also between different income cohorts. Of course governments will be cautious about fueling a housing bubble, but clearly more needs to be done in Auckland so that families can get into house ownership, both from an economic as well as a social perspective. 

by Pete Turangi on March 14, 2016
Pete Turangi

This is the same journalist who wrote that Collins was (falsely) cleared of wrongdoing regarding allegations raised in Dirty Politics and who has joined the chorus trying to spin how the "left" is bad because someone threw a penis toy/yelled at the PM at an event etc. So, not worth putting much stock in.

 

And yes, inequality and poverty do and should matter - regardless of how much or little it has moved recently.

by Nick R on March 14, 2016
Nick R

Wayne, I don't think poverty/income inequality can be entirely conflated (if that's the word I want) with housing affordability.  Housing has long been unaffordable for the very poor but the reason it has become such an issue is that in Auckland at least it is now unaffordable for many middle class people to buy the sort of houses they might reasonably have aspired to own only a decade or so back.  It's not restricted to the poor.

But I agree with the basic proposition that (housing affordability aside) poverty and inequality is not really a key issue for either of the main political parties or indeed voters. People who are genuinely struggling tend not to vote so get ignored, and those who champion them, such as the Greens, haven't been very successful either.  

by Alan Johnstone on March 14, 2016
Alan Johnstone

No, housing affordability isn't a proxy for poverty and inequality.

Poverty is about poor outcomes in education, health, crime. For the poor, the price of housing is about as relevant as the price of BMWs.

Of course Poverty isn't an important political issue, it doesn't impact the vote rich centre where middle income voters live. The poor don't vote in big enough numbers, and when they do they vote left.

There is a moral and financial imperative to do something, I think Bill English and some older, wiser heads know this.

 

by Viv Kerr on March 15, 2016
Viv Kerr

Does climate change matter? No mention of that on the list either.

https://www.theguardian.com/science/2016/mar/14/february-breaks-global-t...

 

by Lee Churchman on March 15, 2016
Lee Churchman

So getting on the home ownership ladder is a crucial element of reducing inequality, both between generations and also between different income cohorts.

Yes, that's part of it, although there's a general problem of intergenerational inequity. Discussion of it tends to be shut down quite quickly as those in a position to do so have an interest in it not being spoken of. Nevertheless, it looms large in the consciousness of people my age and younger.

by KJT on March 16, 2016
KJT

For once I agree with Wayne.

However fattening the pockets of landlords and speculators with housing subsidies is not the answer.

10 000 more State houses built in Auckland a year, Is!

 

by KJT on March 16, 2016
KJT

Lee.

"Intergenerational equity" is a bullshit meme promoted by the right wing to get us fighting amongst ourselves while they run away with the money.

by Lee Churchman on March 16, 2016
Lee Churchman

"Intergenerational equity" is a bullshit meme promoted by the right wing to get us fighting amongst ourselves while they run away with the money.

Sigh... it really isn't. But please carry on tilting at windmills.

by KJT on March 17, 2016
KJT

Lee.

Keep thinking what you are told to think. You will grow up someday.

by KJT on March 17, 2016
KJT

Like the oft repeated bit about boomers and their free tertiary education.

Only 10% of boomers went to University!

The rest of us paid 50% in taxes so the children of the wealthy could infest the ski fields in their university holidays.

Student loans have allowed many more to get a tertiary education. Lucky!

Many boomers lost their jobs several times with "reforms" especially in the 80's and 90's, losing all their savings, their house and often their health.

Between 50% tax rates and 26% interest rates only those on high incomes could buy a house.

To answer just a few of the myths that the "inter-generational equity " pedlars give us. I could go on.

Young people are doing it tough, but it is not "inter-generational theft". As always it is those with the money tilting the system so they can steal from the rest of us.

by Charlie on March 19, 2016
Charlie

Even a casual glance at the maths behind the calculation of 'poverty' would tell you it's an entirely vacuous subject.

It was just another failed attempt by the Left to try and grab some attention.

 

 

 

by Ross on March 20, 2016
Ross

So getting on the home ownership ladder is a crucial element of reducing inequality

Buying a home is oh so easy when you're on the minimum wage or unemployed...

by Brian Easton on March 21, 2016
Brian Easton

Lee and Charlie criticise terms such as ‘Intergenerational equity’ and ‘poverty’. Undoubtedly they, and other terms, are used causally and inaccurately by the Left and Right, but they are rigorous notions in the social sciences..

Housing affordability is not the same thing as poverty. There are families who are definitely not in poverty but who cannot afford a house; there are families unquestionably in poverty who are living in affordable houses (e.g. state houses). I observe that the CPAG thinks the priority is to tackle the issue of inadequate income and then to attend attention to such things as housing affordability.

by DeepRed on March 22, 2016
DeepRed

The likes of Martin Shkreli go to show that ladder-pulling isn't just a Boomer thing. I like to call it "Generation Rentier", a group with the equivalent influence of an unelected House of Lords. Things have gotten to the point where only a massive accident of history like a bubble burst will dislodge them.

As for Watkins herself, I'd say the Key Govt's need for state propaganda is redundant.

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