OVER THE past four (four!) decades, successive New Zealand governments have tilted the playing field well and truly in favour of our wealthy elite. This has predictably led to a continuing widening of the gap between the haves and the have nots. In 2020, the wealthiest 10% had 59% of all the country’s assets, and the middle classes around 39%. That left the poorest half of the country with just 2%.
The growing level of inequality and poverty led to economist Shamubeel Eaqub to observe in 2022 that New Zealand had seen 'the rise of the landed gentry', where wealth is increasingly inherited.
But one of the many perverse ironies of neoliberalism is that those who have been its victims are said to owe something to those who have grown ever wealthier under 'the free market'.
With the Government announcing the ratcheting up of the sanction's regime, Prime Minister Christopher Luxon has tubthumped that 'the free ride' is over for beneficiaries who take' advantage' of the taxpayer. Once again, the insidious propaganda about 'the undeserving poor' is being peddled by yet another neoliberal government. This is meat and drink to National's middle-class base, not to mention the bravely anonymous callers who flock to talkback radio and rail at feckless beneficiaries 'lying in bed all day'. Although they are deemed to be irredeemably lazy, they are, apparently, also responsible for the crisis of late capitalism.
But the idea that the poor owe something to a system that has abandoned them goes a long way back. In 1997, for example, Winston Peters, as Deputy Prime Minister and Treasurer in another National Government, proposed a 'Code of Responsibility'. It would, he said, be a means 'to provide beneficiaries with a plan that details what the government expects of them in exchange for the help they receive from taxpayers'.
In 2024 that 'help' has also come in the way of indexing benefits to inflation rather than wages. The Government's own officials have warned that this is likely to push a further 13,000 children into poverty. The money pinched out of the pocket of beneficiaries will be used to help pay for the Government's tax handout to the middle class, an election promise that Finance Minister Nicola Willis is clearly struggling to meet.
Both Labour and the Green Party have attacked the Government's imposition of a more severe sanctions regime. But it's questionable that either party can presently claim to have the interests of beneficiaries at heart, given their track record.
The former Minister of Social Development Carmel Sepuloni has referenced the report of the Welfare Expert Advisory Group which details how sanctions don't work. But, in 2018, she rejected its recommendation that the sanctions regime be dismantled. She also rejected the majority of its recommendations, including the recommendation that benefit levels be immediately and substantially increased. She was supported by Green Party co-leader Marama Davidson.
RNZ's Tim Watkins wrote at the time:
'Welfare Minister Carmel Sepuloni agrees the welfare system is not working. Marama Davidson agrees the welfare system is not working. And then they commit to ignore the report's big recommendations.
They say no to up to 47 percent benefit increases, preferring "a staged implementation". The call for "urgent change" is rejected. Remarkably, Ms Davidson has put her quotes into the same press release, tying the Greens to this approach, when they could have been dissenting from the rafters.'
In 2022 an exasperated Bryce Edwards wrote:
'What will it take for this Labour Government to start paying attention to the worsening state of economic inequality in New Zealand? The evidence is mounting that, under Labour’s watch, the problem of wealth and income inequality is spiraling. But the signs are that Labour ministers have put this crisis into the “too hard basket”.
The reality is that Labour, when it had the opportunity, failed to act on behalf of beneficiaries and the poor. Instead, the playing field was tilted further in favour of corporate interests and the wealthy. And throughout its six years in office, Labour was loyally supported by the Green Party.
Beneficiaries will be rightfully cynical of both Labour and the Green's, now claiming to be their allies but who did so little for them while in power. And now they are in the midst of not only a cost-of-living crisis, but also facing a government that seeks to impose the economic burden on those who can least afford it.
Both Labour and the Green's will have to convince beneficiaries and the poor that both in terms of policy and action, that they are seeking to be something other than defenders of the status quo and those who benefit from it. Labour is unlikely to be capable of that task but at least the likely new co-leader of the Green Party, Chloe Swarbrick, has signalled she is not interested in leading a party that remains timidly centrist. But it will take much to convince beneficiaries and the poor that the parliamentary road to real change has not already been permanently sealed off and they are merely, and once again, being used as a political football by the Government and the opposition parties to score points with.
A point left unmentioned is the fact of structural unemployment. The current economic framework including interest rates and low wage policies includes the requirement that unemployment be maintained just under 4%.
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