© Anne Else; 31 January 2000

Here we are almost a month into 2000. What has brought the time-shift home to me most forcefully is seeing references to "last century" - meaning the twentieth century. I just have time to keep my first writing resolution - to produce a Letter a month this year.

In any ways it does seem like a fresh start. The election of a Parliament with a solid leftish majority, the cutting back of elected National MPs to a mere 22, and the advent of a Labour government led by Helen Clark are all very cheering. It feels as if a great ideological weight has been lifted.

Yet every day brings more evidence of the long-term, entrenched damage that has been done. And as the patently sincere, gloss-free Neil Martin keeps reminding us, "It is the putting right that counts". As even the briefing papers to the new government make clear, so much has gone wrong for so many people in so many places that it's hard to see where to begin to put it right.

It was significant that the government's first real acts of restorative social justice were to raise the minimum wage by 55 cents an hour (33 cents for youth) and to reverse National's 1998 move to allow the married rate of universal superannuation to fall to 60 percent of the average wage (so the single rate was to fall to around 35 percent). These changes were old-style, even Muldoonist policy, not just because they helped those in paid work and the old (still the least controversial group of beneficiaries) but because they involved relatively simple changes of numbers. What's more, the government made the change to superannuation without also making any overt moves to refute the incessant chorus of doomsayers, notably from the savings industry, claiming that our unique system of universal pay-as-you-go superannuation is unsustainable.

The superannuation debate highlights the central dilemma facing this government.

The urgent need for more state spending in dozens of areas of national (as opposed to market) life, from housing and health to education and the arts - all of which could potentially provide many more worthwhile jobs than they do now - is crystal clear. But where is the money going to come from? The top earners are rushing to avoid even the tiny tax rise Labour has dared to bring in, and there has been no suggestion of innovations such as a capital gains tax, death duties, or a new form of super surcharge. The kind of economic growth which disproportionately benefits wealthy corporates (with much of the increased profit going overseas) and wealthy individuals (who avoid taxes and also spend or invest offshore) is not going to fill the gap.

New flat taxes are hardly the answer either. Most households - 70 percent, according to Treasury's own briefing papers - were worse off in 1996, in terms of disposable (after-tax) income, than they were in 1982. This figure does not of course take into account cutbacks in state services or increases in basic (ie unavoidable) costs, such as housing and health care. The median income for young people aged 15-25 fell by nearly 45 percent, from $14,700 to $8,100, between 1986 and 1996.

Paid work is still being held up as the panacea. But Treasury, WINZ and the Labour Department are all warning that the persistent concentration of unemployment in "certain regions, certain ethnic groups, certain age groups and the low skilled" is going to be very difficult to shift and is even increasing. With uncharacteristic realism, WINZ has even admitted that full-time employment is a vanishing hope for many beneficiaries, and it may be better to arrange for benefits to "top up" earnings from part-time and casual employment.

Many sets of briefing papers warn of threats to "social cohesion" if current patterns of disadvantage are allowed to harden into permanent exclusion. But how many of the well-off, or even the merely comfortable, are at all concerned about social cohesion, or think it has anything to do with them? In New Zealand John Kenneth Galbraith's "culture of contentment" is perhaps better described as a culture of resentment.

Yet the election results show that a clear majority of New Zealanders are, at the very least, concerned about growing inequality and exclusion, as well as about the erosion of their own sense of security. It's just that it may take a much more dramatic shift in policy and action than they have bargained for to make any real difference in what are already entrenched patterns of poverty.
 

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