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Poverty in NZ

Entry 1334, on 2011-10-04 at 14:48:08 (Rating 3, Politics)

I recently listened to a podcast where an economist discussed poverty in New Zealand. Poverty has always been present in some parts of the world but we really should be asking why it should be so common in a country like New Zealand where there should be plenty for all.

One of the problems with discussing the subject in the past has been the definition of poverty. I have heard definitions based on the person's total income in comparison with the median for the country. The problem with that is as the nation's average income gets higher the poverty line becomes easier to reach so high poverty in some ways indicates a better economic situation.

In the podcast some basic statistics were presented and although they don't indicate a good formal definition I think they do show a situation which any reasonable person would consider as representing poverty in the context of a modern western nation like New Zealand.

Here are some of the statistics about child poverty in New Zealand: 20% of children don't have a separate bed, 39% can't replace shoes when they are worn out, many miss out on cultural activities like music and sport, 31% can't invite friends to a birthday party, 39% lack a waterproof coat, 37% don't have a warm room in winter, 63% have cut back on fresh food, 65% postpone visits to the doctor, and 73% lack a holiday away from home once a year. The study was done by the Ministry for Social Welfare and it showed that overall a third of children here live in poverty.

While the numbers are bad I agree that this definition of poverty can hardly be compared with the more extreme hardship suffered by people where there is famine and civil war. And there will be situations where the problems suffered by families in New Zealand are partly the result of the neglect, incompetence, laziness and ignorance of its members.

But that isn't really an excuse. It's just too easy to say that people are poor because they deserve to be. There are examples where the poor could do much better if they just managed their lives properly but the main cause of the problem is our society which no longer has any balance and fairness.

Previous generations had much better access to part-time work, a university education, and apprenticeships. The difference in income between the top and bottom of society was much smaller. And governments weren't afraid to intervene when necessary. Many years of neo-liberal politics have left the country in the state it's in now but the propaganda supporting this approach is so strong people are hesitant to reject it even though it is clear it has huge deficiencies.

So what's the answer? I'm afraid the only things that will really work are completely contrary to current perceived wisdom. We do need to throw more money at the problem and we do need to intervene in the markets to make them work better. Or we could carry on the same path and just ignore the problem, or maybe take the standard libertarian approach and say that it's really for their own good because freeing markets will make everyone better off. But that is both dishonest and ultimately destructive.

New Zealand switched to its current economic model in 1984. That is almost 30 years ago now. I think it's time to admit that it hasn't worked. We do need higher taxes for the rich, we do need intervention in markets, and we do need less investment by overseas multi-nationals and less privatisation.

Many people agree with these aims but few seem to be prepared to act on them by voting for a party who will follow them. That's strange but I guess I shouldn't be too surprised because our political system, like our economic system, never really has worked properly.

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