New Zealand: The myth of an egalitarian paradise.

The photo above is of my local beach in Northland, New Zealand and is typical of the natural beauty that surrounds me. I love the crazy town I live in and the people for the most part are exceptionally friendly. As a relatively new citizen, I also have no intention of moving back to the UK, as long my arse points down. The summers are long and relatively hot, while the winters are mild but wet, all this contributes to our wonderful environment. However, despite all you may have heard about New Zealand, it is not an egalitarian society and hasn’t been so for close to four decades.

Prior to arriving in New Zealand more than eight years ago, I was under the illusion that Aotearoa (New Zealand) was largely a fair place. This idea may have arisen from stories told by visiting Brits, suggesting that New Zealand was akin to the UK in the 1950’s. Although 1950’s Britain certainly wasn’t a socialist paradise, it did boast less disparities between rich and poor than what can be observed today. Up until the late 1970’s most elected governments in the UK were largely social democratic by nature despite the colour of rosette worn. Economics followed a Keynesian prescription stretching all the way through to the 70’s. On the other side of the world, New Zealand also possessed an egalitarian streak, but this all came to a crashing halt upon the arrival of neoliberalism in the mid 80’s.

In 1984 the Labour party was swept to power following a growing dissatisfaction with the Prime Minister at the time Robert Muldoon. Muldoon’s government like many before, ran a tightly controlled economy, an extensive welfare state, plus widespread state ownership in many sectors. But two major events occurred in New Zealand leaving the door ajar for competing economic ideas. Firstly, New Zealand lost a key trading partner when the UK joined the EU and secondly a series of oil crises in the 70’s sent the Kiwi economy spiralling into recession. In just 15 years New Zealand slipped from the 6th wealthiest country in the world to 19th. No amount of controls on prices, wages, rents and interest rates could save the economy. However, what was to replace it proved to have huge societal repercussions.

Douglas and Lange
Roger Douglas and David Lange

The fledgling Labour government headed by the likeable David Lange, who became the acceptable face of the party, was intent on ushering some major changes. Leading this economic charge was Finance Minster Roger Douglas, who would later go on to form the ACT Party, a US libertarian style free market party. Using an economic ideology later known as ‘Rogernomics‘, Douglas almost instantly scrapped the majority of financial controls, while deregulating the markets and removing or relaxing foreign investment regulations. Furthermore, taxes was slashed for high earners, while a regressive ‘goods and service tax’ was introduced, hitting low and middle income earners particularly hard. Douglas even tried to implement a flat tax, but this proved a bridge too far.

Like Thatcher in the UK, the NZ government embarked on a massive sell off of any government assets not nailed down, either fully or partially. Energy companies, the main airport, three banks and Tower Insurance, among others were all flogged off. All this continued unabated into the 90’s when National took over control. During this period the national rail network was sold off to financiers, quickly ran into the ground and eventually bought back by the government during Helen Clark’s tenure. Public services were purposefully starved of cash, thus affecting the most vulnerable in society. As an example, by the end of the 1990’s practically all psychiatric hospitals were closed, with these responsibilities left to private companies. In addition the 1990’s witnessed university tuition fees rise by a 1000% and this continues to skyrocket. Fees are now the 4th highest among first world countries.

The most startling aspect of these ‘reforms’ was the terrifying pace it was all carried out with. Roger Douglas once wrote, “it is uncertainty not speed that endangers the success of structural reform programs”. He continued, proclaiming, “speed is an essential ingredient in keeping uncertainty to the lowest possible level”. Douglas wasn’t remotely worried about uncertainty for everyday people who faced increased job insecurity or unemployment, but rather the fear of scaring potential investors away. This manufacturing and subsequent exploitation of a crisis is what Naomi Klein refers to in her book ‘The Shock Doctrine‘ as disaster capitalism. In the US, however, New Zealand was held up as the ‘gold standard’ of free market capitalism.

Far from being a success, between 1985 and 1992 the economy contracted by 1%, while other OECD countries increased by an average of 20%. One in six Kiwis were said to be living below the breadline by 1992 as poverty soared. Unemployment increased to a high of 20% by the mid 1990’s, but this was all part of the government’s plan to keep inflation low. As wages decreased, so did benefits, while the criteria to obtain assistance became ever more stringent. When a recovery did finally occur it was achieved primarily through insecure and part-time jobs, as witnessed all over the ‘anglosphere’. Unsurprisingly New Zealand saw most of the gains passed to the wealthiest, as income inequality increased at a rapid rate.

UnemploymentPostWar

After nearly 35 years of neoliberalism, New Zealand’s citizens appear to have a warped sense of political reality. This has resulted in the Overton window veering sharply to the right. Now, any hint of social democratic policies are viewed with deep suspicion. Many New Zealanders hypnotised by decades of a right wing narrative from both the press and successive governments claim that the state is over-generous to less fortunate citizens. Business leaders are constantly proclaiming that NZ is overregulated and hostile towards corporations. On the contrary, all evidence indicates the opposite, as NZ has topped the World Bank’s “ease of doing business” report three times since 2005. Furthermore, Forbes has ranked New Zealand in the top three “best countries to do business with” each year since 2010.

In certain quarters New Zealand is regularly labelled a ‘nanny state’, without of course any shred of evidence. Neoliberals have always contested that a developed welfare state discourages enterprise and hard work. Accusations such as this initially arose during the Labour government’s tenure between 1999 and 2008 led by Helen Clark. Although Clark’s interventions did manage to apply the brakes to runaway capitalism, it disappointingly fell well short of reversing the damage caused by neoliberal policies in the 80’s & 90’s. Counter to baseless right wing claims, since 2001 the government’s social spending as a percentage of GDP has been woefully short of the OECD average. Disappointingly, using this metric, NZ has less in common with Sweden, Finland, France and Denmark, while appearing more in line with US social policies.

Like many countries in the ‘anglosphere’ there are a plethora of myths circulating around beneficiaries allegedly cheating the system and ripping off tax payers. Or fables of numerous families turning their home into baby making factories for the sake of a few dollars. After a fairly minimal period of time investigating this, it quickly becomes apparent that most of the information is anecdotal, with a few genuine cases being blown out of proportion to fit a particular ideology. The National government led by John Key which came to power in 2008 were wedded to these myths. This was confirmed by policy, in 2012 single parents who wanted to keep their benefits were forced to start looking for work as soon as the child reached 5, this was decreased dramatically from 18. Two years later the government promised to slash welfare recipients by 25%.

bob jones
Sir Bob Jones

In New Zealand after 30 years plus of policies aimed at cultivating individualism, a third of the country’s children now live in poverty, while more and more people have resorted to sleeping in their cars as rent becomes impossible to afford. Meanwhile, attitudes in many corners of the nation have hardened. Sir Bob Jones leading business figure and all round heartless bastard, proclaimed beggars were “fat Maoris” and a “bloody disgrace”. In support of this ideology out of forty thousands Kiwi’s poled 72% believed begging should be outlawed. Ideas such as this were exemplified by the National government crackdown on welfare fraud allegedly costing the country $30 million. This is chump change when you consider tax evasion costs the nation 33 times more, however, you are 10 times more likely to be prosecuted for benefit fraud, whose ranks are generally made up of the poor and powerless.

Prior to Jacinda Ardern becoming Prime Minister, in an ideological quest to attain budget surpluses public services were decimated. In particular, between 2010 and 2015 the health budget was slashed by $1.7 billion. The Department of Conservation was mercilessly defunded and support for education was cut at all levels. John Key’s government also steadily eroded workers rights, while the wealth gap widened more quickly than any country in the developed world. This was aided by tax cuts for the wealthy and a rise in ‘goods and services tax’, primarily targeting the poor. Even within the last few months, a proposal for a diluted capital gains tax was voted down in parliament, highlighting that power remains in the hands of a few well connected individuals.

The evidence seems to indicate that New Zealand is a nation that has left it’s egalitarian roots far behind and yet is determined to maintain the façade of an equal society. In a way, it could be argued that the political direction over the last 30 years or so doesn’t match up with the general nature of the vast majority of New Zealanders. There appears to be a kind of societal schizophrenia at play. The vast majority of New Zealanders are often civic minded, fair people, who will generally help you out if you need a hand. In contrast the political parties that have often been elected over the last 4 decades have encouraged individualism, a free market orthodoxy and the idea of profit over people. All the while erroneously convincing the citizens of New Zealand that they still have equality of opportunity.

Many people in New Zealand don’t even remember a time before neoliberalism, therefore, are unlikely or unwilling to imagine another way of being. We regularly observe the nation’s successes measured by GDP, we celebrate gross opulence by publishing varying rich lists and are coerced into thinking wealth directly equates to success. We are repeatedly told that the present economic system is the only viable way to prosper. But who is specifically gaining out of all this and who are the people trying to convince us that we already have the optimal economic/political system?

Predominantly, it’s the financial winners who are the ones selling us this capitalist lie and who coincidentally have the greatest opportunity to influence policy. But is unbridled capitalism the pinnacle of humanity and more importantly does economic inequality even matter to most New Zealanders? If the honest answer is no, then the left have failed and we have an obligation to create a narrative that encourages people to consider a more compassionate and fairer way of organising society. A story is required, one that may even appeal to the most self centred of right wing bigots, or maybe not. New Zealand has lived under a neoliberal system for decades, but that doesn’t necessarily prove anything in terms of its effectiveness. A new narrative would require us to explain how economic inequality negatively affects everyone including the rich.

The world and in particular the environment is incompatible with neoliberalism. Infinite growth on a finite planet simply cannot and will not work. Closer to home, New Zealand has some shocking suicide figures particularly for a first world country. We also possess third world health issues such as rheumatic fever, which is heavily linked to socio-economic factors and an embarrassingly ever expanding homeless community. Supporters of capitalism would predictably suggest many of these problems are due primarily to personal responsibility, however, you can only play the hand you’re dealt. For many people life is like trying to play a game of Monopoly with one dice and a tenth of the starting cash, while being expected to compete with everyone else.

The economic and political pathway New Zealand has taken for decades, also feels incongruent with the largely collectivist society I witness on a daily basis in Northland. It’s a place where work meetings often involve a shared lunch, where people bring in what they can afford. On many occasions colleagues will fetch in fruit and veggies from their garden into work, with a sign simply saying “eat me”. It’s a community that often trade skills to get jobs done, rather than paying in cash. I live in a region where I obtained my stash of firewood for the winter by helping a friend split his supply. That’s the New Zealand I know and love. So it’s time our politics and economic system reflect our innate compassionate and collectivist ideals. This is something through experience I know Kiwis are more than capable of doing.

Note: Since writing this article, it would only be fair to acknowledge the government’s wellbeing budget. This should be viewed as a valiant attempt on the road to addressing nine years of societal neglect under John Key. Of course, this is not perfect and has detractors on both sides of the political aisle. However, it must be recognized that the government is restricted, required to deliver this within the existing neoliberal framework. Proposals such as the wellbeing budget are deeply heartening and tentatively suggests New Zealand could be on course for a systematic erosion of this toxic, destructive ideology.

Turn left, turn left, TURN LEFT!!! Hey New Zealand where have all the Socialists gone?

New Zealand has an election on the 23rd September. Currently it’s fair to say, I have nobody particularly inspiring to vote for. Economically it would appear whichever way it goes; a right coalition or a left coalition, neoliberal policies will still persist the following morning. That’s not to say there are no differences, but they are to be found in funding certain programmes or the nuances of the said programmes rather than a re-structuring of a failed economic system. So far during the run up to the election, the ‘NZ left’ have had an interesting time of it. Firstly Labour unveiled Jacinda Adhern as their new leader, which initially caused euphoria among progressives. jacindaThis was known unimaginatively by the press as ‘Jacindamania’, which has only slightly started to wane over the last few weeks, primarily because her mention of the dreaded ‘T’ word, that is taxes. Then Metiria Turei, the joint leader of the Greens fell on her sword, after admitting she lied to authorities, therefore, claiming more benefits than she was entitled to. Ms Turei in her defence stated her actions were nothing more than trying to “survive as a solo mum”. The point of this was to initiate a debate regarding the most vulnerable sections of society and the major problems regarding welfare. Instead Turei’s admission became a starting pistol for intense abuse by right wing factions, both National and ACT desperately portrayed Ms Turei as nothing more than cheat and a criminal. This would be laughable, if it wasn’t so tragic. This very National government has consistently allowed corporations to dodge tax and create an environment that provides socialism for the rich and capitalism for the poor. The tactic of using the poor as an object of aggression, for having the temerity to survive, while the rich get ever richer, is seen all over the neoliberal world and is used to perfection in an effort to keep societies divided.

I came to live in New Zealand from England in 2011, having visited here on our honeymoon in 2010. The longer I spent here, the more I realised that the people are essentially egalitarian, however, this communal spirit stops with a government that is ideologically neoliberal. The differences in NZ from life in most parts of the UK are palpable and hugely welcome. Fruit from your trees gets shared out at work, fish is handed over the fence if somebody has had a good day on the water and people are generally happy to give you hand if you get stuck. Quite often your labour can be used instead of money, for something you may need. For example my last batch of fire-wood was paid for by helping my friends to chop and split wood for the day. Although to most people in the UK this may seem odd as products are bought with that stuff they call money, here it’s pretty normal to exchange goods for your labour. At first I thought maybe this was because I live in provincial New Zealand, therefore as the saying goes ‘if we all get along, we go along’. However, after living in Auckland which is bigger, more frantic and less personal it is still my opinion that even Auckland is a much friendlier place than the average English city. After a few years here I have concluded that this friendly Kiwi attitude permeates pretty much all over the country. So imagine my surprise whilst getting to grips with NZ politics, when I noticed there were no prominent left leaning parties, a problem that still persists today. This blind devotion to neoliberalism hasn’t always been the case, but it’s a doctrine that was borrowed off the US and the UK in the 80’s. The effect of this was to push all acceptable politics to the right and to marginalise the left.

Like most countries in the Anglo-American world Social Democratic parties swung wildly to the right following free-market capitalism being the adopted orthodoxy. It’s not difficult to find examples of this lurch to the right from supposed peoples parties; Bill Clinton took the Democrats to victory in 1993, likewise Tony BlairMSC_2014_Blair_Mueller_MSC2014_(cropped) swept to the top job with Labour in 1997. Both leaders were similar with their liberal rhetoric and easy charm. At the heart of their success, however, was an adherence to a market economy, which managed to sway the support of the corporations and the media. Both Clinton and Blair accomplished the task of achieving relative longevity by balancing neoliberal economic policies, while offering social justice concessions. With this heady cocktail of ideas, often known as the 3rd way, both were able to successfully lure the electorate. Clinton brought in the Family and Medical Leave Act of 1993 while Blair was instrumental in introducing a minimum wage in the UK. These types of policies softened the blow of deregulation of the financial sector and masked the damage that would occur in years to come. One of Bill Clinton’s most destructive actions was to repeal the Glass-Steagall Act which was initially designed to separate commercial and investment banking, this act had been in place since 1933 following the depression in the US. It’s fair to acknowledge that a lack of these types of safety mechanisms among others were a reason the global financial crisis was allowed to reach the devastating conclusion it did. Meanwhile under Blair’s watch university tuition fees were ushered in and privatisation by stealth for the health service increased. The UK and US are not alone regarding their acceptance of a neoliberal doctrine. New Zealand has it’s own tale to tell, which could very well shed some light on the original question “where’s the left”.

New Zealand had always been considered a social democratic state prior to the mid 80’s. From the 1930’s onwards the state owned many assets including Post, Railways, Inter-Island ferries, electricity generation, major public construction works, public housing, hospitals, mining and broadcasting to name a few. The government looked after their citizens and unemployment was quite often below 1%. By the early 80’s people were becoming tired of the National Prime Minister Rob Muldoon from a personal perspective. While many businesses in Auckland were becoming frustrated by a tightly controlled economy. To the surprise of many, Muldoon called a snap election in June 1984, this proved to be his undoing as his opponent David Lange was victorious by a landslide, leading the 4th Labour government. On the night of the election results and following celebrations, David Lange was saddled with the news that the previous government had accrued huge amounts of debts and NZ dollar was massively over-valued. douglasThe newly crowned Finance Minister Roger Douglas who was heavily influenced by the neoliberal ideology of Milton Friedman seized on this New Zealand financial crisis. Douglas had already written a book outlining a radical change to the NZ economy, which was considered ridiculous by most people in the political world. But what Douglas and the rest of the Troika (Richard Prebble and David Caygill) would do next, however, was classic ‘shock doctrine’ as described in Naomi Klein’s wonderful book. This ‘shock therapy’ as used in Chile, Russia, Argentina, US and UK, was to utilise a disaster such as a coup (Chile) or a financial crisis (US and UK) to usher in ideologically driven capitalism. This method, still used today, is consistently in the form of massive deregulation and the privatisation of state assets. These proposed economic changes were heavily supported by the NZ Treasury and the Business Round Table, an exceptionally right-wing think-tank. Within a short period of time New Zealand was transformed from one of the most regulated countries economically to one of the least.

The Labour government proceeded  to sell off national assets worth $2.5 billion at bargain basement prices, while slashing top tier tax from 66% to a paltry 33%. Company taxes were reduced in a similar fashion, at the same time a new regressive Good and Services Tax (similar to UK VAT) was introduced. The Labour regime limited the right to strike, as real wages declined by 10%. Furthermore unemployment climbed from 8.5% to 16.2%. To counter any excessive payments regarding high unemployment the government reduced benefits and abolished payments for under 18’s. As neoliberalism took a hold in NZ, it was common practice to reduce unemployment payments if the gap between declining average wages and the dole became too close. In classic ‘disaster capitalism’ style, Roger Douglas declared that reforms had to be done as quickly as possible, to avoid any form of resistance to them. He even tried towards the end of his tenure to introduce a flat tax, which was a bridge too far for Lange. Following Labour’s resounding defeat in 1990, the country was now in the hands of National, where there would be no let up on the neoliberal doctrine. While in the 80’s NZ had Rogernomics, the 90’s resulted in Ruthanasia. images.duckduckgo.comRuth Richardson was now the Finance Minister and was prepared to put free-market capitalism on steroids. It was their goal to privatise anything that wasn’t nailed down, including health, education, while reducing unemployment, sickness and welfare benefits. Active campaigns using adverts and TV programmes were used to demonise welfare recipients such as benefit cheats, unfortunately the same amount of effort was not expended on tax evaders/avoiders. Like their traditional opponents the National government were happy to maintain high levels of unemployment purposely to keep wages low and therefore, inflation low. Any collective in the form of unions which opposed these draconian reforms were systematically dismantled, with the Employments Contract Act. This intentionally individualised the employment relationship and pitted employee versus employee, this also had the dramatic effect of lowering wages. Although Ruth Richardson was gone by 1993, the National government continued until 1999. By then the die was cast, most people didn’t know any better than capitalism and consumption. The incoming Labour government led by Helen Clark managed to put the breaks on runaway capitalism, but by then individualism and consumerism were ingrained on a national psyche that once stood for egalitarian values.

So I guess the question is, why socialism, why go left? The answer is simple, unbridled capitalism does not have the answers to our very serious problems, both nationally and globally. If you are uncomfortable with socialism. then fine call it something else. The important thing is we need to move away from a massively individualistic society to a collective one. Jeremy Bentham stated “it is the greatest happiness of the greatest number that is the measure of right and wrong”. Not only is that a moral statement, but a practical one when we think that we live in a finite world and what we do has direct consequences on someone or something else. To live a life as if we are in isolation is foolish and irresponsible. To emphasise this point, the worlds 8 richest people have more wealth than the poorest 50%, while 1 in 9 people will go to bed hungry. How does this make sense? Gandhi famously said;

“The world has enough for everyone’s need, but not enough for everyone’s greed.”

So lets get to our pressing problems and why New Zealand needs to turn left. First up homelessness, a report by Yale University concluded that New Zealand has the highest homeless rates in the OECD. More than 40,000 people live on the streets or in emergency housing or substandard shelters, this equates to almost 1% of the population. While there is one person living rough or in sub-standard accommodation, in my opinion we have failed as a society. This is clearly a difficult problem to solve; there is indeed the physical aspect of having enough accommodation, psychological problems, such as people feeling disenfranchised with society and many other complex contributing factors. But the answer is not how many houses to build, or how we increase mental health provision. The answer is the government needs to find the political will to actually complete these projects regardless of any barriers that may exist. Government’s seem to find money to fund war or bank bailouts, but somehow the cupboard is bare when it comes to the most vulnerable in society. This is quite simply an ideological decision to allow certain sections of society to suffer.

New Zealand has some highest suicide rates in the world. NZ youth suicide has twice the prevalence of Australia and five times that of the UK. Although the reasons are multi-faceted, economic inequality is a huge factor with regards to mental health problems. Feelings of worthlessness and status anxiety increases, while trust decreases. The very fabric of society disintegrates, at a time when many people would benefit from a supportive network. Inequality also has a huge effect on child poverty, in 1982 child poverty was 14%, now it sits around 28%. All the while the incomes of the top 10% compared to the lower 10% have increased from 5 times to 10 times greater. The examples I have mentioned highlighting where NZ falls down have one thing in common, ‘people’. If the wealth of the rich compared to the poor widens, yet many health and social indicators show NZ is severely lacking, this indicates to me that the system has failed and the government has no inclination or desire to change course. One last thought on this; New Zealand’s richest two men (Richard Chandler and Graeme Hart) have more wealth than 30% of the poorest people. That in itself is sickening.

On to my last reason for NZ to turn left. The most important issue we face on this planet is climate change. The National government have signed up to the Paris accord, however, this according to renowned climate scientist James Hansen doesn’t go far enough to avoid temperatures elevating by 2 degrees. Climate scientists warn that this rise would have dramatic affects; one in which seas will rise by more than 5 metres over the coming centuries, and one in which droughts, floods and extreme heatwaves will ravage many parts of the world. Currently National seem to be randomly tossing figures around without any concerted plan. For example the government have stated that it will aim for a 2030 target of 30% below 2005 emission levels, which actually is equivalent to cutting emissions to 11% below 1990 levels. Their rhetoric is meaningless as are their actions, but this shouldn’t be surprising as it’s a party wedded to big business, including the fossil fuel industry.

During this election cycle, National have ran an exceptionally negative campaign towards Labour and the Greens. This has been a two pronged attack; ridiculing Labour by stating their proposals are not affordable, while scaring the public into believing they’ll be paying masses of tax to pay for services. One of the stand-out moments was Steven Joyce the current Finance Minister, claiming there was a $11.7bn hole in Labour’s budget. steven joyceThis was of course total rubbish, but it didn’t matter, it had the desired effect. In the right-wing world there is no requirement to tell the truth only the result matters. These tactics were designed to make Labour seem indecisive regarding taxes, at the same time slowing the Jacinda effect. My thoughts are Jacinda Adhern should have been bold the moment she took office, stating; these are the problems, this is what we’ll do, this is why we’ll do it and here’s how we’ll pay. Obviously the only way they could pay is through taxes. Bizarrely, New Zealand, appears to be tax phobic, which would indicate that the people are heavily taxed. This couldn’t be further from the truth, tax is a little less than most OECD countries and is a lot less progressive than it once was (top tax rate was 66%). Tax is obviously spent on services such as health, education, police, prisons and welfare. Therefore, what we pay on tax is directly linked to what sort of services we want in New Zealand. Tax is no more than the pooling of our resources to make the nation better. Scandinavia is well known for their high taxes, but have an excellent standard of living, often topping rankings in; education, low crime, good health outcomes and excellent social cohesion. Tax isn’t the only solution to problems in New Zealand or anywhere else for that matter, but it does offer a means to improve services and reduce inequality.

So why do I keep harping on about inequality? It’s quite simple, inequality is directly connected with; increased crime rates, poorer health outcomes, less social mobility, substandard education, a decrease in social cohesion and a less stable economy. The ruling elite will continue to divide society, convincing the middle class to blame the poor, while the poor blame the immigrants. All the while the rich will get tax cuts or avoid tax completely. Rather than looking at the most marginalised and the vulnerable in society we should be looking towards the ruling elite to locate where the problem lies. As I stated at the top of this piece, the choices for the election are not particularly stark, but I still hope for a change of government and maybe a step in the right direction.