Colin James: the 2015 challenge

In his latest column Even the world’s small can stand upright Colin James writes of “the 2015 challenge” – how do we deal with “inequalities of wealth, income and opportunity”?

We drag with us into 2015 a quarter-century of now-ingrained wide inequalities of wealth, income and opportunity, which divide and undermine us and debilitate our economy.

In the 1890s, as Tom Brooking’s compendious new biography of Dick Seddon expounds, just such a division was fazing dreams of a new, freer society.

Seddon, William Pember Reeves and Jock McKenzie sanded off the patrician patina shipped in from Britain. New Zealanders (except Maori and Chinese, one must note) were to have a fair go to make the best of themselves.

That held for 90 years till the mid-1980s. Now many kids don’t get a fair go and we all lose.

Seddon and Co’s fair-go drive demonstrated that a small, open society can more flexibly imagine ways of doing things than a big, established one.

That is the 2015 challenge.

Rapid technological change is recasting production, value chains and sales channels, redefining education and ways of keeping and restoring health, sowing and vacuuming information, connecting people and things and destroying privacy.

That revolution plus global economic and political disorder have torn up political-economy texts.

The next texts will mostly be written elsewhere. But New Zealand has shown itself — in the 1890s, 1930s and 1980s — to be a place where new ideas can be tested in practice and enhanced. We can be flexible, open and quick-acting. We can innovate, as in our bicultural accommodation. And we have some fine minds.

Standing upright, we could make this a place the compilers of the new texts come to for a sparky idea or two.

That is one of many opportunities a disordered world opens for us in this safe, spacious, well-endowed place.

Can we in New Zealand be “flexible, open and quick-acting” in addressing inequalities of wealth, income and opportunity”?

Is this best done by dragging the top down, lifting the bottom, or a mix of both?

I think raising the bottom to keep up with the rest would be the best point of focus but it’s not easy, nor cheap.

But it may be more expensive in the long run not to.

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20 Comments

  1. John Key has indicated inequality will get more attention in 2015. Will it be token hunch? Or will Key and National stand upright and come up with a sparky idea or two?

    Reply
  2. David

     /  30th December 2014

    Inequality is shrinking albeit slowly in NZ. We don’t have anywhere near the issue that they have in the US, I was there for a month in August and it’s pretty stark there.
    Key has actually done a huge amount to help the disadvantaged get more opportunity, it will come through better education and national standards, charter schools and improving teachers are huge taxpayer investments. All prisoners are required to be working or getting educated and this is starting to show up in recidivism rates. The welfare reforms have seen the first fall in DPB numbers ever and the intense support of teen mums will be transformational for them. Lots of good stuff going on which will drag up the bottom over the next decades.
    the media are too shallow to report these things as they think it’s far more interesting to gossip, watch Twitter and try and take scalps and it’s why no one likes journos and their audiences are shrinking.

    Reply
  3. Alan Wilkinson

     /  30th December 2014

    “You can have anything you want so long as you give enough other people what they want.” Discuss.

    Too many people do absolutely nothing for anyone else. A few provide goods or services for hundreds of thousands or even millions of people. So long as that is true there will be inequality. It is beyond obvious that the best way to reduce inequality is by empowering and incentivising those who do little or nothing for others to do more. It is also pretty obvious that the Left have neither policies nor desire to do this. Instead they pretend more money can fall like manna from heaven onto those who do little or nothing.

    In contrast the Nats have been innovative in both education and welfare addressing exactly this problem.

    Reply
  4. If ‘team key’ are really concerned about any allegations, that the gap is getting wider, why then do they :

    1) deny it, in question-time
    2) give the biggest tax cuts to the wealthiest

    As for privatising education etc. & selling off the housing stock.. who will likely be investing it this.. certainly NOT ‘average Joe/Jo Kiwi’ only those who are already wealthy & getting wealthier.

    Reply
    • Alan Wilkinson

       /  30th December 2014

      The gap is not getting wider. It got wider two decades ago but the Left have just seized on it for political gamesmanship.

      Tax cuts will always be bigger for those who pay the most. How hard is that to understand?

      Would you buy your groceries from a Government store? Russia used to and look how that turned out. So why on earth do you think Government supplied housing and education would be better and cheaper than private enterprise can do it?

      Reply
    • Zedd wrote: “If ‘team key’ are really concerned about any allegations, that the gap is getting wider”

      They can deny that the gap is getting wider because the gap is not getting wider. If you take inequality as the Gini coefficient, then the difference between low and high incomes peaked in the mid-90s. NZ is very close to the OECD average.

      Reply
  5. alloytoo

     /  30th December 2014

    It’s interesting how the conversation has shifted from “Poverty” to the far more intangible “Inequality”. The sad reality is that since the fall of communism in Russia, capitalism and globalisation has greatly reduced abject poverty in the world, so much so that the doomsayers needed to shift the goal posts.

    If the bare essentials, food, accommodation, electricty, flat screen TV’s and basic SKY is supplied (irrespective of Labour input), that exactly what purpose does measuring the difference between the lame, lazy and energetic achieve?

    Reply
    • Shane Le Brun

       /  30th December 2014

      I think a more condensed, and relevant issue, is those at the bottom but working, or those that want to work, but struggle to find jobs in relevant field. I only recently heard the term Precariat, but it is a great description of the working poor, all it takes is bit of bad luck for the working poor to get truly shafted. Your either paid for what you know, or what you do, but much work is underpaid/ and or has ridiculous education requirements versus the pay at the end. The end result is those with their head barely above water are permanently anxious, one run in with a massive mechanical bill on a car, or an injury and ACC, (because they are so good at shirking their obligations) and its straight to the bottom of the socioeconomic ladder for so many of NZ.

      Reply
      • alloytoo

         /  30th December 2014

        “Underpaid” in strictly economic terms means that you are being paid less than what the market will bear. That’s the crux, if the market will bear more than what one is being paid than one should seek more market related opportunities.

        I suspect that you are not using the term in the economic sense, but rather in the vague and nebulous sense of “I want more” or “I need more”. Neither of which has any bearing on the market value of the labour in question.

        I suspect you are referring to people on the minimum wage, in which case, in economic terms those people are probably over paid.

        Reply
  6. What is meant by “inequality”? And why is it a problem? (For example, if Bill Gates was to live in NZ, it would result in huge inequality – but in fact we’d all be much better off.
    And what of people who make a rational choice to live at the bottom of the wealth distribution curve?)

    Reply
    • alloytoo

       /  30th December 2014

      You’re right, it’s not a problem, it has however been almost a hundred years since the the Russians began that grand experiment in equality which produced poverty and corruption on a grand scale, so perhaps people have forgotten.

      Reply
  7. Alan Wilkinson

     /  30th December 2014

    @Shane, I’m not sure it is any different for any employed person. Effectively you have only one customer, your boss, and if you lose that one you are on your ear. If you are self employed with multiple customers you are not so exposed though of course you still face all the uncertainties of the market.

    Only the bureaucrats who like to make rules for the rest of us can rest easy knowing it would take a major malfeance to put their job or income at risk.

    Reply
    • Shane Le Brun

       /  30th December 2014

      I disagree, its getting worse, as the employers hold more power, I don’t like Unions on principle, they shield some ***** useless workers, but the zero hour contracts, the increasing cost of housing and the cost of living in general versus wage rises means more and more people are put in a precarious position. A simple fix with taxes to give an effective pay rise would be to slash the rate on the bottom tax rate, but that would require National to reverse its cut to the top tax bracket.

      Reply
      • “is getting worse”
        And the evidence is…

        “the increasing cost of housing and the cost of living in general versus wage rises”
        I recommend the Stats website. Or MSD.

        2011 to 2013 median household income rose 4% in real terms (ie 4% faster than inflation).

        Reply
  8. Alan Wilkinson

     /  30th December 2014

    @Shane, you may disagree but you haven’t justified it, just another bunch of assertions. A middle manager who loses his or her job is just as vulnerable to debt, mortgage and family obligations they cannot meet as someone on a lesser wage with proportionately lower obligations.

    Reply
    • Shane Le Brun

       /  30th December 2014

      A middle Manager likely had years of disposable income to shelter themselves from such an event, the lack of certainty and security i’m referring to is the bottom 1/3rd of NZ, I was never exposed to it when I was in the Army, the answer to unemployment then was to point out the 300+ vacancies in the Army, since leaving the relative security of that job I’m constantly exposed to people who meet the definition of precariat, working full time, with literally $20 or less disposable income per week. My personal Precariousness is working full time with a mortgage and kid. The wife is in significant and permanent pain and on ACC, they are constantly looking at avenues to exit her, which will result in a sickness benefit and a probable house sale. Thats percarious, so I relate well to those one worse incomes with unreliable jobs.

      Reply
  9. Mike C

     /  30th December 2014

    @Shane and Alan. I have struck extremely hard times several times during my life.

    Not once have I blamed the Governmental Party at the time, regardless of being either Right or Left.

    My personal situations and circumstance have always been mine alone to address and reconcile.

    I have come back from adversity, through hard work, determination, and because I can’t stand being a loser.

    Reply
  10. Mike C

     /  30th December 2014

    @Shane. You don’t need to write a future introductory post. Anyone who refers to their significant other and child as being “The Wife and Kid”, has already explained themselves enough and plenty.

    Reply
  11. Ian McKinnon

     /  31st December 2014

    zed: The perspective of a loser. If people want out of feral living, let them bloody work for it . . . too many self entitled overbreeders are our problem.

    Reply
  12. Alan Wilkinson

     /  31st December 2014

    @Shane, I’m sorry to hear of your wife’s injury and your worries. If I could suggest something it would be to go and have a discussion with your bank manager to see what could be done to give yourself a plan B.

    Reply

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