We live in a looking glass world where the old are a burden, unpaid work is dependency, benefits are bad for you, and taxation is theft. We have watched this world unfold over the last fourteen years. Like Alice, we were unable to read it at first. But now we have worked out how to hold it up to the mirror and see what it means.

I do not believe in being nostalgic about what preceded it. Various groups of outsiders knew very well that the welfare state had jaws that bite and claws that catch. The history of state housing, for example, often so rosily recalled today, demonstrates enduring discrimination against Maori and women-headed households.

The setting aside of reserves for hostels was the only form of shelter provided by the government for Maori until the late 1940s, when the government was forced to begin to open state housing to Maori families. Separated or divorced women were excluded from state housing until the 1960s:

In 1991, just before the National government introduced market rents and accommodation supplements, a study by the Maori Women's Housing Project Network pointed out that the state of Maori housing had been identified by governments as an issue ever since the 1930s. But "it is as familiar a sight today in the 1990s as it was in the 1930s to see Maori settlements of tumbledown houses and shacks...It was recognised then as it is now that such low living standards have a serious effect on health, education and social standards... These conditions continue to exist despite the intervening sixty years" (Maori Women's Housing Research Project 1991: 61). The report goes on to focus on collectivity versus individualism:

It is true, says the report, that "the State has been insufficiently concerned about the conditions in which many Maori women live, and insufficiently concerned with the results in terms of other indicators of welfare such as health, education and employment". But the report concludes that this is a problem which the market is clearly unlikely to solve. It is also true that "some of the solutions lie with Maori society". Therefore, Maori women are prepared to contribute their resources of heart, spirit and commitment to those of the Government, "in a combined battle against inadequate shelter, and in pursuit of a truly wealthy New Zealand." ((Maori Women's Housing Research Project 1991:70.)

Many New Zealand women - the majority, I believe - will understand and agree with what is said here about collectivity, and about the necessity of continuing to work with the state to achieve true social security and wealth. The welfare state Jabberwock has not merely failed, it has repeatedly created havoc. But killing it is not the answer.

The welfare state is now close to death. It has been wounded through attacks on taxes, on social provision, and on democracy itself. The strategy has to be understood if it is to be defeated.

The first limb of the Jabberwock to be lopped off was progressivity, or vertical equity - the rich pay a greater share of their income in tax than the poor do. Because taxes have had such a bad press, this was relatively easy to achieve.

The changes begun in 1984 made the tax system much more regressive. New Zealand now has a remarkably simple and flat tax system. There are only three income tax bands, and there is no free zone whatsoever. Employees get very few deductions for personal or family expenses of any kind. Interest is taxed at a uniform rate, as are all consumed goods and services. Because the poor consume more of their incomes, in ways which attract GST, and are less likely to claim available rebates, they pay a proportionately larger share of their incomes in indirect tax.

There are no capital gains taxes, no death duties, no inheritance taxes, and few restrictions on foreign exchange transactions. The top income tax rate of 33 percent is one of the lowest in the OECD. Finally, the surcharge on high incomes received in addition to New Zealand superannuation has been completely removed.

In a tail-chasing downward spiral, targeted funding has to be cut because taxes have been cut, and also put to other purposes, such as paying consultants for arranging the sale of state assets, and meeting the multiple costs of restructuring.

Progressivity is the essential partner for universal provision. In the recent past, progressivity was achieved principally through the tax system. There was some means testing, mainly for working age benefits. This impacted much more on women, through joint income testing or assumptions of male support, than on their male partners or potential partners. But women and children also directly benefited much more than men from the various forms of universal provision. This was the second limb to be hacked away at.

From 1991, progressivity was to come not from higher taxes on the better off, in return for universal provision, but from abatement of universal social provision - in other words, clawing back benefits and services through extended means testing, often dollar for dollar or even more. More of those things that the government used to provide for all who met the criteria, paid for by progressive taxation, were now only to be provided if income, and in some cases assets too, were sufficiently low. (See St John and Boston, forthcoming.)

Once taxes were flattened and the tax base was broadened, universal provision became much more difficult to defend - and, of course, to fund. We were told that the better off had captured the benefits, that it was unfair for the poor to pay taxes to fund provisions for the better off, and that if help was targeted better, the poor would get more of it.

The full list drawn up by Ruth Richardson and co. included not only income tested benefits but also old age pensions, health services, education and housing. At the same time there was to be at least a distancing of state involvement, via funder/provider splits, or, preferably, a withdrawal from any form of provision other than a cash voucher. Because of the poverty traps abatement creates, this could only be done across the board by introducing the concept of "family accounts". This proved to be too complicated to be workable, and the idea was shelved.

he poverty traps remained, and spread. The obvious failure of the existing forms of provision to serve disadvantaged groups as well as possible, or to eliminate poverty, was used as a rationale for replacing them with forms which have actively increased poverty and misery. Not only have funding and services been cut; tight targeting inevitably results in extremely high marginal tax rates. These are much easier to impose on the poor than on broader groups. But they also make it very difficult to escape from being poor.

One of the most damaging poverty traps has resulted from the changes to housing assistance. Help with housing now comes in one basic form: the accommodation supplement. This provides some money to help tenants pay for market rents - but never enough to bring them back down to 25 percent of income, the old benchmark for state rents. The supplement is tightly targeted on assets as well as income. It starts to cut out as soon as extra income is earned.

Residual cash provision for the poor only can do nothing positive to influence overall standards of provision. It becomes a low-level sink for those who have no alternative. For example, accommodation supplements have done nothing to improve affordable housing provision at the bottom end of the market. The money goes to the landlord, not the tenant. They have resulted in overcrowding, use of any kind of shelter available, and repeated shifts.

Tighter targeting has not resulted in more help for the poor. It has resulted in less - so much less that other forms of provision become ineffective. The lack of affordable, secure, adequate housing destroys people's ability to use education and health services. The Principals' Federation has recently reported on how forced mobility is destroying young children's education. One child in Northland was typical: by the end of her first year at school, she had moved house 16 times. But the inability to benefit from these services is then made out to be an individual failing in social responsibility. This in turn justifies further punitive cuts in provision.

Cutting funding for targeted benefits has proved to be much easier than cutting funding for life cycle related universal provisions, which are extremely broadly used in New Zealand. Only 4 percent of children, for example, go to private schools. ACT is now focusing much of its anti-state campaign on education. But the most prominent current target is the most universal - old age pensions.

The World Bank has published a handy blueprint of how to move away from reliance on public provision of old age income, and force individuals to increase their savings instead. "The first step is to raise mandatory retirement age and downsize benefit levels (in the frequent cases in which they are overgenerous to begin with). Governments must also make the benefit structure flatter, the tax rate lower, and the tax base broader." (World Bank 1994:22.) This has now all been done in New Zealand.

The second step is to launch private provision. This can be done in three ways: downsizing the public pensions pillar gradually, while reallocating contributions to a second mandatory pillar; or holding the public benefit relatively constant but raising contribution rates and assigning them to private schemes; or starting a completely new system straight away. (World Bank 1994:22.)

The first attempt to remove universal taxpayer funded provision of an adequate pension in old age came in 1991, when National passed legislation to reduce the pension to a low means-tested safety-net benefit only. This move was too drastic and sudden and it failed. The government was forced to backtrack. So did the second, in 1997. The government made the fatal mistake of asking the public if they wanted change, and then had to explain what change would mean. Women's organisations, allied with the trade unions, played a major part in the defeat of the compulsory retirement savings scheme.

The government and the finance sector are now gearing up for a third onslaught. The tactics so far have been to repeat frightening statistics about population ageing and the looming grey peril - the enemy is us; remove the surcharge, which effectively removes progressivity for wealthy superannuitants and makes the system blatantly unfair; insist that our current system is unsustainable in terms of the tax burden; blame the lack of personal saving for our precarious economic position [and in October 1998, lower the floor of the band linking pensions to wages - for couples, from 65 percent of the average after tax wage to 60 percent, meaning that single people living alone (overwhelmingly women) will get only about 35 percent of the average after-tax wage].

Those over 65 continue to have a universal right of call on the public purse and on collective responsibility. Unlike unemployment and sole parenthood, getting too old to earn is not evidence of moral failure [though failure to save may be]. But virtually every other tax-funded category of need has been deconstructed into fragments based on detailed pigeonholing, according to income, assets, age, age of children, relationships, location, duration, and presumed ability to undertake paid work. Judgements of precisely which fragments apply to those seeking help are made according to increasingly complex, contradictory rules by state employees who are only marginally less confused than their clients.

Above all, this strategy seeks to enforce recognition of differences among citizens according to a range of arbitrary and inconsistent dualities: whether they have paid work or not, whether they are married or not, whether their children are dependent or not, whether they are welfare dependent or not, whether they are employed in the public or the private sector, what they do or do not consume, what lifestyle choices they make, whether they support or oppose more market liberalisation, and, simplest of all, how rich or poor they are.

These differences interweave in complex ways. A company owner who speaks of social responsibility or a judge who appears to be an obstacle to removing the few remaining restrictions on employment practices can be rapidly positioned on the wrong side. But of course, they do not suffer any real penalties.

The ranks of "us" and "them" are constantly shifting. The tactic is to identify more and more people as part of the fearsome Jabberwock, because they rely on the welfare state instead of on themselves. But there are now clear signs of strain, as the proportions tarred with the brush of failing to act in accordance with the correct model grow beyond credible bounds. The Code for Social Responsibility backfired: the divisions were too crude and obvious. Colmar Brunton's research on the first draft of the public booklet got an overwhelmingly negative response. It was perceived, and rejected, as an outright attack on Maori and beneficiaries, by people who were neither.

A recent division is savers versus non-savers. The Treasurer and the Prime Minister have blamed the large current account deficit on the non-savers, and threatened to force "them" to save by making more changes to tax and superannuation. But this means condemning at least 80 percent of the entire population for not saving enough. Divide and rule on this scale becomes very difficult to sustain.

Of course, as targeting increases and universal provision disappears, more and more people get less and less in return for their taxes. Those who can afford it begin to buy expensive private provision instead. So the pressure to cut taxes grows, from the top earners down. ACT has been egging this on by mounting a campaign against "paying twice", for health and education. This whips up support for cutting the general level of tax revenue as a share of GDP, starting by cutting the top tax rate yet again. This is said to be necessary in order to:

The optimal tax burden to achieve this is said to be about 20 percent of GDP. The current level is about 35 percent of GDP. To quote a handy recent summary by a business journalist (Evans 1998), despite the chorus of condemnation of the methodology used to reach these conclusions, they "seem intuitively right":

This is said to be an example of a paradigm shift - "changes in dominant ideas [in this case, Keynesian views on tax] prompted by problems unable to be solved by the old ideas."

These "old ideas" are those which prompted the setting up of the welfare state. Keynesian economics, says Patrick Caragata, one of the experts recently contracted to work on tax issues by Inland Revenue, "was created for an extreme situation in the 1930s, but after 1945 the welfare state made possible by high taxes 'was stretched far beyond its original purpose and problem-solving capability.'" The paradigm "hit a brick wall by the 1990s, when OECD countries' fiscal deficits and government debt became too large to ignore any longer" (quoted in Evans 1998). In other words, the welfare state cost more than governments were taking in tax. The answer is not to raise taxes, because they are already said to be too high. Cutting the welfare state is not enough either. Instead, taxes must be cut, thus removing the source of the state's power to spend.

We must understand that this is not a self-seeking crusade by the rich and powerful. On the contrary, it is a moral battle against an evil beast. As Patrick Caragata puts it:

According to this view, collective tax-funded provision of any kind is like pre-antibiotic medicine, a weakening poison, and only to be used with extreme caution in cases of extreme need if at all. The most reviled use of tax revenues is for direct transfers of money to those who have not "earned" it in the market. These transfers are said to be both inefficient and immoral. But the entire range of state provision is the real target: not just a few of the Jabberwock's limbs, but the beast itself.

Even the Jabberwock is not the ultimate enemy. Behind the campaign against tax and the welfare it pays for stands yet another, even bigger dragon for the new right to slay: democracy itself. When the Business Roundtable brought out David Green, far more attention was paid to his attack on state welfare than to the attack on democracy which underpinned it (see Green 1996). Modern "majoritarian" democracy, says Green, "has corrupted the true democratic spirit. The higher ideal is to confine the political process to making laws that protect us all, and to refrain from use of the political process to benefit one group at the expense of another."

This fits perfectly with ACT policy: "Have as a long-term goal that the state only own and operate as of right the nation's defence, foreign policy, justice and administrative governmental issues." Today, says Green: "private interests bargain with government for benefits...claiming "victim status" has become a popular strategy for winning political support for measures that confer advantages on some at the expense of others. Such tactics undermine not only liberty, but also the self-respect of would-be victims....The claim that welfare should be universal as a badge of democratic citizenship has created division rather than solidarity. Democratic citizenship is desirable but the political process is not the only potential outlet for the desire to be a good citizen. The political process intensifies the corruption of the vote-buying process." By contrast, the market system is "a daily referendum" which "allows choice and initiative", unlike a "majority view" prevailing.

Ideally, "The state's role...would be reduced to a point where its core functions could be financed with radically lower levels of taxation - probably just a goods and services tax of the kind currently in place in New Zealand - thus greatly increasing economic efficiency and dynamism. The abolition or drastic reduction of income tax would put less pressure on both parents in a household to seek paid work, and allow many more people to become self-supporting, thus strengthening both family and social cohesion. Through such a programme we can begin to restore to civil society the tasks that belong within the sphere of the people and confine government to its important but limited duties."

How much support has there been for killing the Jabberwock? A new survey shows that 67 percent of the population now believes that the country is on the wrong track. But this conceals a large gender gap. When it comes to political support for policies designed to reduce collective responsibility in all its forms, men consistently outnumber women. ACT supporters are overwhelmingly male; women support Labour much more strongly than men do, and also favour the Alliance.

This is not surprising. The membership of most of the groups on the wrong side of each carefully constructed difference is heavily female, and disproportionately non-Pakeha. But this membership is no longer strongly marked as female, and ethnic marking is usually avoided, at least in public.

Unless Pakeha feminists can successfully join forces with Maori and other opponents of the new right - of whom women form the majority - then we may as well give up now. As Susan Bordo has pointed out, just as there is no view from nowhere, neither is there any view from everywhere. All there can ever be is a view from somewhere. The view from feminism is still the only view which focuses explicitly on gender, and gender issues have repeatedly proved to be one of the major stumbling blocks for the new right.

For all its past and present blindnesses, silences and shortcomings, feminism provides a useful standpoint. It offers the only standpoint from which large numbers of Pakeha women can begin to see that the death of the Jabberwock has to be resisted, and how this could be done. Unless more women can be persuaded to resist more strongly, and take more men with them, the New Right's opponents could very soon be history.

Carroll, Lewis. Alice Through the Looking Glass. Spring Books, Feltham, 1965.

Evans, Steve. "High taxes 'bad for the economy' - but not all agree". The Dominion 18 February 1998.

Ferguson, Gael. Building the New Zealand Dream. Dunmore Press/Historical Branch, Palmerston North, 1994.

Green, David. From Welfare State to Civil Society. New Zealand Business Roundtable, Wellington, 1996.

Maori Women's Housing Project Trust. "...for the sake of decent shelter..." Maori Women's Housing Project Trust, Wellington, 1991.

St John, Susan and Boston, Jonathan. "Targeting Universality: Social Assistance for All or Just for the Poor?" in J. Boston, P. Dalziel and S. St John (eds.) The Decent Society, forthcoming.

World Bank. Averting the Old Age Crisis: Policies to Protect the Old and Promote Growth. OUP for the World Bank, Washington, 1994.

Ó 1998 Anne Else

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