The political issue of the 2014 election



What might shape the political issues for 2014? That question was answered last week with the release of a brand new book written by some of NZ leading academics looking at the vast increase in NZs inequality.

Last week in a packed lecture theatre at Auckland University, BWB Books released ‘Inequality: A New Zealand Crisis’. Edited by Max Rashbrooke, it carries the opinion of some of NZs best academics, economists and social commentators all focused on highlighting the gross mutations of wealth concentrations to our once precious concept of egalitarianism.

The hegemonic nature of what confronts us as we begin discussing inequality was investigated on the night by the main guest speaker, the incredible Robert Wade. Professor of Political Economy at the London School of Economics.

He pointed out that in a mere 10 years, the financial economy in 1997 went from being 15 times greater than the real economy to 70 times greater than the real economy by 2007. With the rise of financial markets there has been a weakening of substantive democracy and a weakening of national sovereignty. With political parties dependent on the richest 1% for donations, modern democracies have drifted towards substantive oligarchies. Wade argues that we now face the reality of plutocracy, where the concentration of wealth allows for an oligarchic political elite to dictate policy for the 1%, by the 1% in the interests of the 1%.

The book itself is a devastatingly well researched argument attacking any pretense we may have that Jack is as good as his master in these shaky Isles.

Here are some of its conclusions:

-The gap between high and low incomes has widened faster in recent decades in NZ than in most other developed nations

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-Across all adults. the top 1% owns three times as much wealth as the poorest 50%.

-NZ now has the widest income gaps since detailed records began in the early 1980s.

-The average household in the top 10% of NZ has nine times the income of one in the bottom 10%

-Between 170 000 – 270 000 children living in poverty (depending on the measures used)

-One of the world’s worst worst records of child health and well-being

-One major report on children’s welfare ranked NZ twenty-eighth out of 30 developed countries.

-There are more Pakeha in poverty then Maori, but poverty impacts Maori & Pacifica more acutely. 1 in every 10 Pakeha households live in poverty, 1 in every 5 Maori and Pacific households live in poverty.

-Maori had 95% of their land appropriated and alienated between 19th Century and 20th Century. (Compensation for the almost complete loss of an economic base in just over a century? A mere $1.4Billion in Treaty settlements. A steal at twice the price you might say. Not only have Maori been ripped off, but they are also forced to live in poverty with the reality of generations worth of being ripped off. Insult to injury, jowl by blistered jowl.)

-Women earn 13% less than men and are under represented in senior positions within almost every occupation. Many are forced to take low income part time work.

-Subsidies for Kiwisaver contributions and some Working for Families tax credits, are available only to those in paid work or, sometimes, in full-time paid work. A lower proportion of Women are in full time work so they are more likely to be excluded from these initiatives and more reliant on inadequate state benefits.

-Pacific Islanders are 3 times more likely to be unemployed than the general population’s rate, they also, like recent immigrants, struggle alongside Maori against structural discrimination.

-These groups represent the 800 000 NZers living below the poverty line.

-Against that number, 29 000 people own 16% of NZs wealth, and 13 000 NZers have incomes over $250 000.

-Wages and benefits are too low for people to live on, it isn’t an issue of budgeting, it’s an issue of income.

-Poverty erodes voice and citizenship which generates inequality.

-People’s ability to participate fully in their society and enjoy a sense of belonging is vital for a Democracy to flourish.

-While we all have a responsibility to contribute, we also have the right to benefit from the fruits of society. The road worker, receptionist and sales assistant all contribute to a functioning economy as much as the businessman and executive do.

Peter Dunne’s lack of party members is a symbolic gesture that there won’t be any political middle ground next year. The election will be decided by the fringes of the political spectrum, either by ACT/Conservative Party teaming up to give National the Parliamentary majority or by MANA enabling Greens & Labour to have the numbers.

The inequality that National has exacerbated has created two NZs. Those who have benefitted from the $400m per year tax cuts and those who have not. National are championing policy for the wealthy at the direct cost of the poor and if that injustice isn’t enough to motivate engagement, then nothing will.

Inequality will be one of the issues that shapes the 2014 election.


  1. Didn’t you just want to give Bill English an Uppercut? The round about ways he goes in trying to answer a question as vaguely as possible annoys the hell out of me

    • It’s because marginalise economics is bankrupt, Keynes was proved wrong in the 1970’s stagflation and Milton Friedman between 1999 and 2007.
      He ain’t got any answers left.

  2. Main problem with this book is that is doesn’t attack the real causes of the income gap. Financialisation is the result of the collapse of investment in production in the OECD countries. The reason for this is the inability of corporates to screw enough profit out of highly productive workers despite the corporate share of new productivity being at all time high. This means that money that cannot be invested in producing new commodities is forced to speculate on existing commodities.

    So all those parties who seek to equalise incomes are part of the problem. The solution will not come from academia but from the streets as we are seeing right around the world. Not until the masses who produce all the wealth take control of the economy and run it in their interests and not the tiny capitalist minority, will income inequality be possible.

    • @ Dave Brown,

      Interesting what you write, but couldn’t that be the other way around? That the collapse of investment in productivity has something to do with the creation of speculative markets and not the other way around?

      i.e people, companies and pensions funds started investing in futures markets etc rather than production because a bigger buck could be made on speculating?

      And if there had have been more equality (less individuals with extreme wealth), this speculative culture wouldn’t have developed.

    • Dave, I sympathize with the idea that state-driven (or as social democrats like to say “policy driven”) income equalization can’t solve the problem. With the Plutocracy now in control of both major parties, and actively working on buying off the smaller ones, I suspect the best we can do by participating in electoral politics is to erect ‘policy blockades’ inside parliament, stopping the 1% from using the state to make things worse. I agree with you that such tactics are unlikely to work without pressure from protests movements on the streets, in occupations, and so.

      However, exciting as street politics can be, what the experience of joining Occupy reinforced for me more than anything is the importance of developing alternative visions of how society could be organised. When we march, or occupy, or join unions or political organisations, or form workers co-operatives, we need to be doing so with some understanding of how our personal and group tactics contribute to larger strategies for social change. Even when we don’t agree with all their conclusions, books like Rashbrooke’s give us a solid starting point for debating those larger strategies.

  3. I doubt whether Labour will make inequality a major talking point. That would require them to actually have some policies to address it, and they are far too timid for that. So it will be left to the Greens and Mana to raise the issue, and in doing so they will make Labour squirm uncomforatbly. The question then becomes, to what extent will Labour try to shut down the debate and keep focus on topics that are safer for them. The statistics are powerful and speak for themselves, and I really hope I am wrong, but I don’t think that Labour will be rushing to publicise them

    • @ Kingi
      “The question then becomes, to what extent will Labour try to shut down the debate and keep focus on topics that are safer for them.”

      That may be true, but if they do, it’ll be one of the fastest ways for them to ensure their own demise – as it will be for any other party that attempts to do likewise.

      There will be a ‘tipping point’ – just as sure as shit. As we’ve seen – it’s going to take a lot longer here in NZ than elsewhere. Pulla Bent’s latest efforts (for which I note she claims to be proud of) will ensure the inevitable.
      Meantime, unfortunately we continue the march towards fascism, and scarily in much the same way as occurred 80 odd years ago. Maybe when we see the brownshirts on the street (or the rise of the Pakeha Party)

      • Get a grip. I know the founder of the Pākeha Party. They are a bunch of concerned folks trying to find the mythical middle ground. The rise of neo-fascism they are not. On the other hand, have you seen the 1Law4All Party, based on the “research” of known white supremacists like Dr Kerry Bolton?

        • You quoted Kerry Bolton who was secretary of the New Zealand National Front –you have just vindicated they 1law4all are neo fascists secondly their research on Parihaka missed the rape the Armed constabulary committed and infected woman and children with syphilis and how the prisoners were used as slave labour to build Portobello Rd in Dunedin without trial for up to 30 years.

    • I tend to agree. Since the Great Betrayal, Labour cannot be trusted to support the worker. A clean out of the dead wood is needed (Goff, Mallard, King, etc).

  4. Wade pointed out that in a “mere 10 years, the financial economy in 1997 went from being 15 times greater than the real economy to 70 times greater than the real economy by 2007.”

    The word “real” is one I’ve heard John Key using – alongside “world.” It’s so nice to have a leader who knows what “real” is and what the “real world” is so he can tell teachers that that’s what to need to get into.

    His reality is so self-and-mates-serving he wouldn’t know what’s real and doesn’t really care.

  5. and Paula B is doing her level best to ensure that it’s gonna get worse . . . the beneficiaries have become the new Jews of the ghettos/Christians in the circuses.
    Meanwhile the people are distracted by ‘reality TV’ (Drug Wars, Home Renovations – even if the mirage of home ownership is rapidly fading, and dreamy x-factor bullsh!t) and sport (thugby and millionaire yachties).

    I hope we wake up in time to stop this fascist takeover of our society.

  6. “Where the concentration of wealth allows for an oligarchic political elite to dictate policy for the 1%, by the 1% in the interests of the 1%.” – supported by nearly half of New Zealand voters

    The same thing happened in the United States in the 1980s when the reactionary working classes voted for Ronald Reagan despite the Republicans working against their interests. Whose responsibility is it, when voters vote against their own interest and those of their fellow New Zealanders, based on prejudiced views of their fellow New Zealanders?

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