Dr Liz Gordon: The collapse of the welfare state


The number of homeless in our cities and towns, the lack of housing, charities overwhelmed, corporate welfare and high pay for the rich, poor health outcomes, a disaster of widespread need at the lower end – these are some of the signs of the collapsed welfare state discussed at Wednesday’s CPAG summit.

These are the ongoing effects of 30+ years of neo-liberalism, a political philosophy aimed at shifting wealth from the poor to the rich in New Zealand.  It has been a most successful movement. Even though, as Max Rashbrooke shows, the bottom 90% of New Zealanders are worse off, most people still think that it is the best economic model.

That’s right, people vote over and over for an economic model that makes them worse off.  It is very clever. The philosophy is that if you align yourself politically with the best off, you might become one too (however unlikely).  But if you align yourself with your own economic interests, you might end up poorer. Your only hope is to vote ‘up’, and then to join the wealthiest in decrying the poor as shiftless, weak and inadequate.

It was spawned by the free marketeering and privatisation goals of Rogernomics in the late 1980s, a Labour government that betrayed the people it was formed to represent.  It was furiously furthered by National between 1990 and 1999. Apart from the 1991 budget that slashed benefits, it was death (and chaos) by 1000 cuts. Such ridiculous experiments!  Who remembers the ‘Regional Health Boards’, that divided NZ into four and encouraged regional entities to compete with one another. This led to massive health inequalities that still exist today. Tertiary fees, debt, increasing costs of education, and then cumulatively more benefit cuts that together, we were told, outweighed the initial Ruthanasia attack.

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Did you know that benefits for a single mother with one child would now need to increase by $200 per week to equal the spending power in 1991?  The robbery of the poor to pay for tax cuts. And benefits cannot rise by that much because wages have also so stagnated. How did it happen?

Helen Clark’s Labour government did not overcome neo-liberalism, but fostered it further.  The truth needs to be told about this. It must not be allowed to happen again. Then nine more long years of another slash and burn National Government.

And now government spending is at a rock-bottom 30% of GDP, almost at Roger Douglas’s dream of 10% on GST and 20% on tax.  By pledging to keep that 30% figure, not to spend more, not to tax more, this government has locked itself into the same straitjacket as all the others since 1984.  

The neoliberal revolution is not over.  It took huge political determination to embed neo-liberalism, and the reality is that it will take huge political determination to overcome it.

I have not voted Labour since 1987 (except for my local MP, the talented Megan Woods). But, as you all know, I have been excited and enlivened at the recognition by this government that things have to change.  But I have never seen any new government minister stand up and say the neo-liberal rules are the wrong rules, that we have been made a much poorer country, that the rich (OMG Fonterra is a disgrace on so many levels, and Fletchers….) do not invest in us but are feckless and complacent (mostly) and that we need to share the resources of this beautiful country more equitably.

Deep long work needs to happen on changing people’s beliefs about political management and the economy. Neoliberalism has been such a successful movement for those who have gained from it.  For the rest of us, the most of us, the poor of us, the needy among us, not so much.

Apart from the CPAG conference and some authors, I hear only the deepest silence on this.  The poor are silenced by the weight of the blame that is placed on them, by the burden of the immediate needs they cannot hope to meet, by the slings and arrows of the welfare system.  The government is silenced because of fear and a lack of stated alternatives.

What can be done.  Let’s start with baby steps.  I want to focus on one thing now. The government – all ministers of children, women, and welfare -should jointly announce a policy change immediately – do it after Cabinet on Monday – that:

From today, no single parent family will have their benefit abated by $20+ per week because they do not name the father of any child.

Such a simple start. Just do it! Then consider the next step, and the next.


Dr Liz Gordon began her working life as a university lecturer at Massey and the Canterbury universities. She spent six years as an Alliance MP, before starting her own research company, Pukeko Research.  Her work is in the fields of justice, law, education and sociology (poverty and inequality). She is the president of Pillars, a charity that works for the children of prisoners, a prison volunteer, and is on the board of several other organisations. Her mission is to see New Zealand freed from the shackles of neo-liberalism before she dies (hopefully well before!).


  1. Between you and Frank, we get the clearest scrutiny of the massive failure of the neoliberal experiment. Unlike the rest if middle New Zealand, I vote for radical reform.. or as radical as the establishment will permit. The Greens may not be radical enough for some of my comrades, but it has to be small, incremental steps. Or else the criticisms outlined by Martyn that’ve been in the headlines (https://thedailyblog.co.nz/2018/09/14/latest-media-claims-of-cracks-in-the-government/) will be only the beginning of a massive media-right-corporate pushback.

    The whole Kiwibuild thing may be middle class welfare. In fact, it IS! But its also a clear signal to voters that neoliberalism will NOT deliver their cherished kiwi dream, and in fact will work against it. Kiwibuild is a sign that the state is needed in our lives and and cries of “nanny statism” from the right is a statement agsinst home ownership and other aspirations of middle NZ.

  2. Excellent piece here Liz, 100%

    Our hats off to you for exposing the truth about the grubby ‘underside’ of today’s imbalanced economy riddled with Neoliberalism in NZ.

    I hang my head in shame for being a kiwi born 74 yr old who is struggling today to survive.

  3. At last some one shines a light on the real problems facing our nation, fixing a self creared problem will only come when our so-called leaders realise that courage is required and needs to be displayed. Liz said it all when she wrote

    “Apart from the CPAG conference and some authors, I hear only the deepest silence on this. The poor are silenced by the weight of the blame that is placed on them, by the burden of the immediate needs they cannot hope to meet, by the slings and arrows of the welfare system. The government is silenced because of fear and a lack of stated alternatives.

    Actually the real problem is simply a lack of courage, they know [Labour and the Nats] that they have stuffed up over the past decades and the poor have got poorer and the richer…

    The second step they could take is to increase the top tax rates, the race to the bottom is over, we are already there…remove GST on food could be a third step…but will this government do it, I doubt it, they are simply too weak kneed.

    The CPAG are a light in the darkness…keep up the good work.

    • Agree cutting GST on fresh fruit & vegetables and basic core food items is a no brainer, however this Coalition Government needs to open it’s eyes if we are going to improve the health standards and eating habits of our lower/middle classes. Eating fast food and drinking fizzies is the least cost alternative these days even though it affects the country’s national health standards ?

  4. Thanks for telling our story again, Liz. We need to hear it regularly.

    However, what about how the unleashed freemarket lifted vast numbers beyond poverty around the world while we endured stasis and assaults on our egalitarian democratic culture?

    Telling our story is made harder by the filed teeth of the rich-owned national media through which we have to pass to hear about things.

  5. Voters are between a rock and a hard place. Natz are the worst neoliberals and thank god they are gone, but Labour is also neoliberal and they and NZ First signed TPPA.

    TPPA is apparently the same version as the Natz but with a few pages added as “suspensions” and still apparently it does not mention climate change once… and still the ISDS clauses in there for big business apart from side agreements with a few other nations.

    Apparently that is why Singapore investors can still buy NZ existing houses and apartments and the new apartments which apparently was the hope for the poor to live in. (Auckland has it’s entire planning gutted with huge consequences to people’s lives in a negative way and opposite to what the woke left thought it was all about with huge rise in spec mansions and congestion and the affordable housing actually being demolished).

    oh well, that’s great they demolished that old house that now is replaced by apartments, because under Labour’s new foreign buyer laws it allows foreigners to purchase new-build apartments in large complexes without OIA approval (and lets face it, OIA approval seems to be a given in most cases anyway and you can become a NZ resident and therefore able to purchase any home in NZ anyway as easy as that Restaurant Manager position at Burger King under the skilled category to migrate here).

    Greens are becoming bogged down with small topics that are probably well under the radar of many people’s top priorities for NZ. Hopefully the will fire up a bit against neoliberalism…

    Mana has virtually disappeared and they had much bigger topics of hope for the poor, living wages, full employment, 10,000 state houses a year being built, free tertiary education, abolish GST and replace with financial transaction tax, nationalise assets and remove monopolies…etc

  6. In some ways the ersatz left coalition becoming government was the worst thing that could have happened to Aotearoa’s long term chances of returning to a community which rated the welfare of every citizen its #1 priority. I write that knowing full well the coalition may indeed be slightly more well meaning than the natz were but that isn’t exactly a stellar achievement, in fact in this instance it is a disadvantage in a world dominated by the very real political ratchet effect and not the lame excuse for inflation which assorted neolib economists have distorted the ratchet effect into.

    The political ratchet effect has been tightening the screws on ordinary kiwis since the early 80’s, There is one slight difference between the Aotearoan model and the model in most other societies since it was an allegedly leftist party which first cranked up the tension to the detriment of the citizens but following that initially left handed spanner the situation has returned to normalcy. Indeed considering that the year the natz defeated the Labour government they had campaigned on loosening the screws but of course did the opposite once elected shows the kiwi model to be as sturdy and unforgiving as anywhere else.

    You all know how it works, a conservative gang takes government and screws us all to the wall allegedly in the common interest & trickle down etc but only elites actually benefit. After a few terms even the indoctrinated can take no more, so a mob of pretend lefties take over (always pretend since the whores in media destroy anyone who is actually caring & sharing). Sometimes they manage to refrain from making things worse but one thing is certain, they never make things any better. That is the pawl slipping into place. This vid https://www.youtube.com/watch?v=EpVPG2fZrHE describes it.

    The blue piece at the left of screen is the pawl, while the similarly blue device at right is the lever which drives the mechanism tighter tightening the screws on the citizens.
    For the purposes of this illustration the lever at right should be considered to be the dreaded ‘market forces’ aka rich buggers pushing for more of we the people’s resources.
    The blue device on the left the fawl, is of course the ersatz left political movement which is in government. The pawl slips in whenever our community has been screwed tighter, although after that it generally remains stationary not doing much at all, there is a sole action at which is excellent. It ensures there can never be any movement back to loosen the screws, return Aotearoa to a more benevolent society.

    The enire citizenry could try to force the axis in a contrary direction and the pawl ensures that cannot occur. People are wont to allege that the current coalition is fragile and could maybe shatter. I take the contrary view, it is an alloy of slightly left careerists, pale green careerists and slightly conservative careerists, on their own, all as weak as piss, but melded together into a durable alloy they are very tough to smash.
    Enough with the metaphor, even a cursory study of effective resistance, particularly resistance without an effective mouthpiece tells us that circumstances have to get really bad before sufficient humans prioritise fighting back ahead of meeting the immediate needs of their loved ones.

    That is why despite utterances to the contrary the elite has been pretty sanguine about this new government. The pawl has slipped into place, possibly at the most opportune moment before kiwis became so upset at the notion that they too could end up in the streets as Aotearoa’s creaky infrastructure failed to keep up with demands placed on it by immigration that slipping in a mob of confused, disorganised and poorly led neolibs could be just what the doctor ordered.
    Yes another three years of natz would have been horrific, yes this does provoke concerns about means and ends, but unless Aotearoa and its citizens are driven to the point of having to fight back, the society which our whanau and whakapapa strove to create for us will be gone for good.
    My mob who had been driven off the ancestral lands they had worked for many centuries by the Highland & Island clearances of 19th century Scotland came here to live because they had been (incorrectly it transpires) informed that the available land had been honestly purchased from or gifted by tangata whenua.
    I know that was the case for many of the 19th century immigrants into Aotearoa, when I read the letters and diaries from them which remain it is plain they came here to build an inclusive & fair society. If material wealth or religion was driving them, I’d be talking amerikan today.
    Why have we done this to ourselves and more importantly, how do we switch the pawl around so any movement can only be to a fairer, more just community.

  7. Yes, we need to reform our institutions first – the most important of which is our democracy. It must be protected from the influence of money through 2 means:

    1. Generous state funding of parties based on votes won.
    2. Banning everything else but for fixed value, transparent private individual funding (allowing parties without seats to get started). i.e. no business or union funding.

    That way even National would have to represent their voters and not their funders. The whole political spectrum would naturally move left.

    Next you would ban the ownership of multiple media companies and politically campaigning by companies.

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