New Zealand has a lot of things to be proud of: a can-do attitude, a relaxed way of life, a great environment and an increasingly diverse society. Those are all successes. But, in the words of the businessman John Paul DeJoria, “Success unshared is failure.” To be able to take part in all these things that make New Zealand a great country, people need a reasonable income. But too many people miss out because the rewards of the economy don’t always go where they should.
Look at the Kristine Bartlett, for instance, who just won a big court case showing that aged care workers, who look after our elderly and vulnerable, have been massively underpaid for decades. Meanwhile people can make millions just from buying houses and then flicking them on a few years later, having added nothing.
While this is the country we’ve ended up with, it’s not the one we want. Years of polls show New Zealanders are very concerned about inequality. They show that we want a fair society, where people’s rewards match their contributions, and where we’re always looking to reach out a hand to those struggling, rather than kick them when they’re down. We want a society where every kid has the same chance to follow their dreams – and can have a decent life no matter what job they end up in. And we want a society where communities are strong and people feel connected to others.
But all that’s being put in peril by inequality. New Zealand is becoming an increasingly unbalanced society, with an economy that’s been designed so that it delivers most of its rewards to those who are already doing well. In the last thirty years, incomes for our richest New Zealanders has more than doubled, while those of the poorest have barely increased – and in fact are lower now than they were in the 1980s if you take their increased housing costs into account.
Middle New Zealanders’ incomes are also falling well behind those of the richest. Ordinary people have been working harder, smarter and more productively than ever before – but they’re not sharing in the wealth that they’ve created.
Not only is that growing gap unfair. It also means that many opportunities are effectively out of reach, especially for our poorest children. We don’t want to end up like America, where you can predict half of a person’s income from what their parents earned, because inequality leads to such different starts for rich and poor kids and the government doesn’t offer much support for adults. Instead we want a society where all parents have enough income to buy their kids a computer for school and heat their home properly, and strong public services help out those struggling in later life.
Growing income imbalances also breed distrust and eat away at the bonds between people, weakening our sense of each other’s lives and our ability to pull together to tackle difficult problems. And when inequality takes money away from lower middle income households, it holds back the economy, because those households don’t have the income they need to buy NZ-made products, invest in their children’s success, or build a stronger future.
These growing imbalances have come about because of decisions our politicians have taken – giving tax breaks to the rich, slashing benefits for the poor, and weakening the bargaining power of most workers – and because we have wrongly assumed that growing income gaps are inevitable. They’re not.
For the next 30 years, we need to reverse our national story, so that incomes double for most New Zealanders while increasing very slowly for the richest. Economic growth is no use unless we put in place rules to make sure that its benefits are evenly shared. We need to lobby for a Living Wage in our businesses, for benefits to be linked to average wages to stop families missing out, and for those who’ve drawn most from our common pool of resources to pay their fair share of tax.
As a country, we need everyone, including our politicians, to recognise that the growing barriers between the rich and the rest are one of the biggest problems we face – and that urgent action is needed to break them down and ensure that everyone shares in New Zealand’s success.