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Photo: Getty Images
Photo: Getty Images

SocietySeptember 21, 2017

You’re not selfish if you want a tax cut – but there’s a better way

Photo: Getty Images
Photo: Getty Images

People who are ‘just managing’ in New Zealand are not heartless if they support policies that will help their family most in the short term. But there is a better, more positive way to ease their pain, writes Jess Berentson-Shaw.

Yesterday I had a play with the Herald’s income inequality tool created by Max Rashbrooke, Keith Ng and Emily Beausoleil, to see how our family was doing. Later, as we were deep in the chaos of the morning routine with the kids, I had a realisation. “We are doing just fine income-wise,” I said to my husband, “but a lot of our income goes on high housing costs and our student loans. So imagine what it’s like for other families on middle incomes?”

As I looked at the tool again I saw how much income inequality has impacted those in the middle-income brackets. I got thinking about the accusations that people in the middle are selfish if they vote for tax cuts or other policies that benefit them in the short-term, and I wonder if we have got the conversation about fairness a bit wrong.

Except for a lucky few, everyone is hurting

You can see from the screen shot of the inequality tool below that pretty much everyone in New Zealand, across the income spectrum, has suffered from the imbalance in income gains in the previous 10 years – the exception being the richest 10%.

What the tool does not show, of course, are the housing costs, the student loans, the childcare and transport costs that people are paying while also experiencing the sharp end of unbalanced income gains. What it also doesn’t show is that the richest 10% have not only had the most income gains, but have grown their wealth on the back of rising housing costs. The two figures below shows us just how much of New Zealand’s net worth is tied up in housing (it’s over half) and how wealth is unevenly distributed in New Zealand.

The impact of the unbalanced distribution of income and wealth is that the majority of New Zealanders are feeling the pressure. And there is an obvious truth about being a human being: what hurts you and your family now is what matters most to you. It is just plain old psychology. Of course we still care about others who are doing it really hard, but we have to find a way to stumble through our own challenges. I will come back to why this matters in a bit.

Why is everyone but the few hurting?

New Zealand, it has been said, has a ‘rock star’ economy, but if you dig down to what this actually means it loses a lot of the glitter. We have rising house values (which means homes are more and more expensive), we have a strong dairy industry (but government continues to subsidise water use and pollution), and through immigration we have sufficient skills and people to drive the economy (but we are failing to invest in many New Zealand children or ensure a good quality of life for those immigrants).

A few people are making a lot of money from this, a long tail of people are treading water, and many are sliding backwards. It is a certain type of success for sure, but it is no way to build a thriving, innovative society and economy. Economies that thrive over the long term are ones where all are invested in early; it is one where the finite reality of physical resources are accounted for. Thriving economies are diverse, forward looking and support innovation (and the failure that comes with that). This is not New Zealand right now, and it is not New Zealand because people in politics over a very long period – 30 years at least – have chosen policies based not on good evidence for long term well-being, but on shallow metrics of success for the short term.

The pain that many are feeling needs to count

So let’s get back to that pain most are feeling. We have a terrible problem in this country; I write about it a lot. Those living on the lowest income are going backwards, struggling to feed their children and heat their houses, and the impact of this is multi-generational. All children and families really matter, and the majority of New Zealanders believe strongly that we need to do much better for those who are suffering.

But the middle income brackets are also struggling. The promised trickle down never happened, they are treading water financially, and the younger generation cannot get into housing despite having an expensive education. They put off having children to get ahead but still the financial impact on their families is serious because of housing costs.

Photo: Getty Images

Let’s consider dairy farmers in particular. They too have become in many ways the victims of the failure of government to choose innovative policies for our economy. Getting involved in a booming dairy sector makes sense if you live in the regions. A big component of dairying’s primary input – water –  is subsidised, as is any degradation to the environment. And because there are few other alternatives to do well in the regions (a lack of investment in anything other than housing means a non-diversified economy) dairy is often the best choice, even if it means a high debt and stress load.

So when people are asked to make what they perceive to be an immediate economic sacrifice for those at the very bottom, or the environment, and then told they’re heartless if they find it hard to do so, it’s a pretty bitter pill to swallow.

Economic well-being is not a zero sum game

What we should be talking about is why progressive, innovative policies will actually benefit us all. Humans are complex – they can cope with the idea that such policies can be about self-interest and care and compassion for others. The process to get there might just look a little different to what they expected.

Yes, if you are in the middle income bracket and suffering right now, a tax cut may look like the best way to deal to that pain for your family. Your pain should be recognised, but unfortunately house prices are going to keep rising and so will that income and wealth inequality. The pain will remain. If you are a dairy farmer then continuing the subsidies of water and pollution may look like the best way to avoid the pain of the massive debt burden that keeps you awake at night, but a diversified regional economy will benefit both your region and children.

Wealth taxes, large-scale community housing investments, living wages, universal income support for children, diversified investment and innovation policies, pricing pollution, public transport investment – they all require a bit of faith and hope, but they do work, they do deal with the pain everyone is feeling. As the well known psychological test goes, if we can wait a bit longer to eat the marshmallow, we all get two.


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SocietySeptember 19, 2017

In honour of all the women who came before you, and those after – for goodness sake, vote

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Today is Women’s Suffrage Day; in four days’ time, the country goes to the polls. Equal Employment Opportunities Commissioner Dr Jackie Blue reflects on the meaning of a New Zealand woman’s vote.

Kate Sheppard. Her face is on our $10 notes for a reason, but how often do we think about what that reason is? Do we ever consider how she would feel about the progress of women since she fought for our right to vote all those years ago?

How would she feel knowing that the vote she fought so hard to have, is now treated as something to do if you have time, or something unimportant because yours doesn’t really count, or something that some people just can’t be bothered doing?

Women’s Suffrage Day is today. Fitting, considering all eligible New Zealanders, including women (thanks Kate!) should be voting this week in our general election. But here’s the thing, only days ago there were fewer young people enrolled to vote than in 2014 – that’s 67% enrolment for 18–24-year-olds.

Now, I don’t want to put on the mum hat and tell young ladies to enrol and vote, but sometimes the situation calls for it.

Today of all days, our young people, especially our young women, should consider the magnitude of what was achieved back in 1893. Women were vilified, outcast and faced immense hostility for their stance.

What did they fight for, if in 2017 people are flippantly throwing away the opportunity to have their say? Consider that prior to the efforts of people like Kate Sheppard, women had no say over the way the country was run, who was running it and what decisions were being made. You, lucky young person, do and it’s worth considering what having your say has the potential to achieve.

Our Government decides so much for us – whether sexual consent is taught in schools, whether our abortion laws are reformed, whether to legislate for pay transparency in the places we work etc. But your vote allows you to decide what our Government looks like.

Educate yourself on the political parties and their policies and find one that suits you and what you want your New Zealand to look like in the future. Talk to your friends and family about the voting process and what that means. Think about what you want to stand for.

Our small country has a long history of women standing up for what they believe in, tackling the seemingly impossible and making their voices heard on the national and international stage. We are battlers and Kate Sheppard and the Women’s Suffrage movement are the tip of the iceberg.

Dame Whina Cooper who founded the Maori Women’s Welfare League and led the famous 1975 land march from Te Hapua to Parliament – an important moment in the reassertion of Maori identity and rights.

Ettie Rout who became a safe-sex advocate during the First World War by tackling venereal disease through preventative measures. At the end of 1917, the NZEF adopted her prophylactic kit for free and compulsory distribution to soldiers going on leave.

Fran Wilde who introduced the Homosexual Law Reform Bill that was passed in 1986, despite receiving death threats, hate mail and heavy criticism from the opposition. Who then went on to become the first female Mayor of Wellington.

Dr Margaret Sparrow who as a sexual health pioneer continues to be a fierce reproductive rights advocate and campaigner for our abortion laws to be reformed.

Leah Bell and Waimarama Anderson who as young school students/young women got a NZ Land Wars commemoration day, ensuring that all New Zealanders understand this piece of our history.

For a glorious period in the early 2000s we achieved a girl-power political quartet, with a female prime minister, governor-general, attorney general and chief justice.

Today, we are continuing to produce confident world-leading female creatives such as writer Eleanor Catton, musician Lorde and dancer Parris Goebel.

This list goes on and on.

Each of these women took hold of the opportunity in front of them to make a change. To step up and take the lead. Now is the time for you to make the most of your opportunity – an opportunity afforded to you by the very women we celebrate today.

For goodness sake, vote.


The Society section is sponsored by AUT. As a contemporary university we’re focused on providing exceptional learning experiences, developing impactful research and forging strong industry partnerships. Start your university journey with us today.

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