Fact Checking

On Mondays – or Tuesdays after public holidays – National Radio’s Kathryn Ryan runs a session called ‘Political Commentators’. On 28 April, from the right was regular commentator Matthew Hooton. From the left was Neal Jones who is listed as: “Chief of Staff to Labour Leader Jacinda Ardern, and prior to that was Chief of Staff to Andrew Little”.

It was good to hear Hooton now becoming something of an advocate for a Universal Basic Income (UBI), though (given past comments) I am not clear yet that he understands it fully.

It was concerning, however, to hear Jones – a man close to Prime Minister Jacinda Ardern – repeating falsehoods about Universal Basic Income. Jones said that a key problem with UBI is that it would be paid to New Zealand’s richest man, Graeme Hart. That comment reflects an attitude that is dismissive of universalism. Universalism is the basic principle that underpins democracy; and, more generally, underpins ‘horizontal equity’, the idea that we are all equal in our economic and other civil rights.

Perhaps even more importunately, Jones’ comment on Tuesday was false.

It was me who in 1991 first coined the term ‘Universal Basic Income’; my aim was to connect the established concept of ‘Basic Income’ (‘Citizens Income’ in the United Kingdom) with insights gleaned from New Zealand’s tradition of universal income support, as established in the 1938 Social Security reforms and as reaffirmed in the 1972 Royal Commission on Social Security.

The mechanism I envisaged in 1991 is: “a universal tax credit available to every adult – the universal basic income (UBI) – and a moderately high flat tax rate”.

(Refer to my ‘Briefing Paper’ From Universal Basic Income to Public Equity Dividends (2018) which in turn links to a report that links to, among other papers, my original 1991 University of Auckland Policy Discussion Paper. To the best of my knowledge, this was the first ever published use of the name ‘Universal Basic Income’. The name started to be used internationally after I presented a paper at the Basic Income European Network conference in Vienna in 1996.)

Since the 1990s, the concept of Universal Basic Income has become poorly defined, and tends to be seen, simplistically, as an unfunded handout, a kind of regularly paid ‘helicopter money’. In that sense, it is true that some proposals that use the name ‘Universal Basic Income’ would raise Graeme Hart’s income. But not all versions of UBI. In those versions that are truest to the underlying concept – Graeme Hart’s income would be unaffected.

So, once again, for the remainder of this essay, I am going to avoid the term ‘Universal Basic Income’. The term I will use here is ‘Universal Income Flat Tax’ (UIFT, if you will). This is a mechanism made up from a universal income and a single (flat) rate of income tax. Thus, the universal income is funded by the removal of the lower marginal tax rates. In the New Zealand case, that means the universal income replaces the 10.5%, 17.5% and 30% marginal tax concessions. With a single tax rate of 33% and a universal income of $175 per week, Graeme Hart would be completely unaffected, at least in the implementation phase. This represents a reconceptualisation of income tax rather than a redistribution of income.

The Mechanism at Work

Rather than labour the point about how we introduce the UIFT mechanism, it’s good to get the vision of the mechanism in action. It is a mechanism that addresses the issues of stability, precarity, equity, and sustainability. UIFT is not a sufficient panacea to cure all our economic ailments, just as the introduction of MMP did not remove the politics from politics. UIFT is, however, a mechanism that makes the necessary possible. It is an enabling mechanism for the evolution of liberal democracy. The Covid19 global emergency has shown more clearly than ever that our present ways of thinking about public finance are disabling, and as such threaten to bring about an end to liberal democracy in some parts of the world.

(Much of the disabling is due to the fact that many welfare benefits continue to be delivered to us in the form of tax exemptions, allowances, concessions and graduations. These are attractive to recipients because they are unconditional – they do not have to be applied for – and to policymakers because they barely contributes to public debates about social welfare. The big problem with this kind of benefit is that, when a person’s income declines, these tax-related benefits also decline. We tend to think of benefits as a cushion, or a safety net. These tax-related benefits represent the cushion being removed when we fall. The best benefits are cushions that are there for us when we fall, rather than cushions given to us when convalescing from an uncushioned fall.)

So, imagine that we already have in place a 33 percent income tax and a weekly basic universal income of $175. (For present beneficiaries, this $175 per week would represent the first $175 of their present benefit. This situation does not represent any substantial change from the income distribution we have become accustomed to. It is a conceptual change.)

How could we use this tax-benefit mechanism to address the four issues: stability; precarity; equity; sustainability?

Stability.

Stabilisation is the familiar issue of how societies use fiscal and monetary policies to manage normal economic downturns and upturns in the economy. Governments expect to pay more welfare benefits in an economic contraction (eg a recession), fewer benefits in an expansion. And governments expect to collect fewer taxes in a contraction, more taxes in an expansion.  Thus, we expect the government to run budget deficits during contractions and budget surpluses during expansions.

When we have welfare benefits that are easy to access, this process is known as automatic stabilisation. While such automatic benefits are good for the recipients, they are especially good for the stability of the economy as a whole. (Countries that already had a system of benefits in place before the Great Depression of the 1930s – notably Sweden and the United Kingdom – emerged from that emergency comparatively quickly, in 1932. Other countries – for example France and the United States – were still in economic depression at the onset of World War 2.)

The more bureaucratic the process of accessing benefits – and the more conditional those benefits are – the less efficient is the stabilisation process. (Reliance on benefits delivered as tax concessions is especially destabilising, because these benefits are lost when they are most needed. A particularly egregious example of a destabilising benefit in New Zealand at present is the In-Work Tax Credit, which, as its name suggests, is lost when recipients lose their employment. Another such benefit is the KiwiSaver annual tax credit of $521, which is progressively lost as a person’s gross weekly income falls below $1,043.)

Under the UIFT mechanism, the full universal income is retained when a person loses their job, or suffers a reduction in wages. And it’s instant, a genuine cushion; not a subsequent palliative. Further, this cushion benefit cushions people with partners still in work; many people (especially married women) do not qualify at all for present targeted bureaucratic Work and Income benefits.

When there is an economic expansion, under this UIFT regime, government income tax revenue increases by 33 cents in the dollar for every extra dollar of gross income; thus, during a normal economic upturn, the government moves into surplus more quickly and more automatically.

Precarity.

Precarity is the situation where many people are employed on short-term contracts; some may be expected to be ‘on call’ without being compensated for that restricted time. It also refers to many the self-employed people – free-lancers and small business operatives – whose labour incomes fluctuate with little predictability.

For these people, a basic universal income works as a personal economic stabiliser – a cushion allowing some income tide-over during down times – with a higher marginal tax rate which offsets this cushion in the good times. With the UIFT mechanism in place, these people can remain self-reliant, and will have minimal need to engage the welfare bureaucracy which needs to prioritise those people with structural income incapacity.

Further, the unconditional benefit component of the UIFT creates some incentive for self-employed workers to retain work-life balance, by not overworking at certain times, and by not penalising them when they need some downtime, such as family time.

Equity.

Equity is a central component of democracy. And equity represents the equal ownership of productive resources. Private equity represents the equal ownership rights of the principals of private businesses. Public equity represents the equal ownership rights of all economic citizens over those many productive resources which are not privately owned. Equity-holders expect to receive an economic return on their equity. There is no law of economics that restricts this capitalist expectation to private shareholders.

The consequence of this liberal democratic reasoning is that the universal income component of UIFT can be properly understood as an economic dividend; interest on the public equity represented by the public commons. And it also means that a universal income that is basic (ie low) need not remain low under all possible future circumstances.

Just as political citizenship reflects the universal suffrage, one person one vote, so, in a mature democracy, economic citizenship requires a universal publicly-sourced private income. One person, one equity dividend. A reflection on equity principles suggests that the universal income part of the UIFT mechanism should be understood as a public equity dividend.

A universal publicly-sourced private income is capital income, not labour income. It is a social dividend, not a wage. It is a yield on public capital. It is social capitalism at work, not socialism.

The word ‘equitable’ must be associated with an equalising mechanism. Here we may consider both financial inequality and time inequality.

A liberal democratic dividend means that one substantial part of the economic pie is distributed equally, and that the remainder of the economic pie is distributed unequally in line with market forces. It means that people experiencing substantial declines in their market incomes retain a personal stake in their liberal democracy, through their rights to an income from the public share. And it means that people experiencing increases in their market incomes do not simultaneously draw increases from the public share. Financial inequality is mitigated.

Time inequality is addressed, because the inclusion of an unconditional universal income gives encouragement to the overworked to work less, and for the underworked to work more. Without such an equalising mechanism, workers, who also lose public benefits when they lose private incomes, are disincentivised from reducing their work overloads. Likewise, people with little or no work know that, with UIFT, they will retain their publicly-sourced private income when they take on increased market workloads. The overworked work less and the underworked work more. For the unemployed and the underemployed, a basic universal income is work enabling; it facilitates rather than restricts labour supply.

Sustainability.

This issue relates to both the issue of robots and the issue of climate change. It relates more generally to the possibilities of being able to enjoy high living standards in a more relaxed form, and having a supply-elastic economy. At present we try to have a full-capacity (ie, ‘maxed out’) growing economy where we have little choice but to overproduce and overconsume. At present, our overconsumption is someone else’s livelihood.

The robot concern is that our economies will become too productive. The only thing scary about that scenario is that, at present, we have no social mechanism to distribute the proceeds of that productivity. In the absence of such a mechanism, the endgame is extreme inequality, which means (among other things) extreme poverty. An advanced society with extreme poverty has high unemployment of bothpeople and robots.

How does a mature UIFT mechanism address this issue? It addresses the issue by both raising the amount of universal income and by raising the income tax rate. If done in a neutral manner, then the overall extent of economic inequality (measured by the Gini Coefficient) would be unchanged.

In order to avoid increased inequality, both the universal benefit amount and the tax rate would need to increase. This would be a simple reflection of increasing capital income relative to labour income; more gross income accruing to ownership relative to income accruing to effort.

(At this point we might note, Graeme Hart, as a likely robot investor, would be even richer than he is now, before tax. While the UIFT mechanism would give him an increased public equity dividend, he would also pay more income tax. The net effect of these three influences on Hart’s income should be that his ‘disposable income’ would increase at about the national average.)

As this process of rising incomes and rising income taxes unfolds, it means that the public share of the economic pie increases relative to the market share. This increases the willingness of the overworked to work less. And it increases the understanding that paid work is a cost rather than a benefit. Rising public equity dividends relative to total income gives the necessary signal to the entire workforce to work less for money, and to embark on more projects that may not deliver financial returns. More voluntary unemployment, less involuntary unemployment. More ‘slack’, in the sense that slack represents market supply elasticity. An economy with more slack has the capacity to increase production when it needs to. In normal times, liberal capitalist economies should not be ‘maxed-out’; only in certain types of emergency.

We can now imagine a democratic capitalist world order, in which people choose to both earn less and spend less, while being assured that basic economic needs are covered, as well as many higher-order needs. Ironically, in our Covid19 lockdowns many of us gained a sense of that, though missing the coffee and ambience of the local café. But not missing the wider rat-race.

It is this slower living – which we have seen briefly – that has the potential to bring about environmental sustainability. We have heard more birdsong. We have smelled the flowers. We have heard that the people in China have lately seen the stars in the firmament.

We can have a high productivity economy without maxing-out our countries’ GDPs. We just need a mechanism to make the necessary possible.

What is the First Step?

In New Zealand, the first step is to reconceptualise our tax-benefit system, and in the process to apply a little relief to those who work hard without receiving high wages. This step would have easily been funded through tax revenue in 2019, pre-Covid19. Today this first step should be funded – and immediately, eg through the 14 May 2020 Budget – by Reserve Bank credit, just as the emergency wage subsidies have been funded.

See my Five Examples for any further clarification about how the transition to UIFT would affect different people.

In many other countries, the process will be more difficult. They have more complexities to unravel (compared to New Zealand) in their present income-tax scales. Australia could make the transition quite easily, with a 37% tax rate and a basic universal income of $240 per week.

We need political commentators with open minds.

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References:

Universal Basic Income (or Basic Universal Income) and Covid19. Scoop or Evening Report, 7 April 2020.

From Universal Basic Income to Public Equity Dividends (2018); Policy Observatory Briefing Papers, AUT, Auckland

Public Equity and Tax-Benefit Reform (2017); Policy Observatory, AUT, Auckland

The Universal Welfare State incorporating proposals for a Universal Basic Income, Keith Rankin, University of Auckland Policy Discussion Paper No.12, 1991

Constructing a Social Wage and a Social Dividend from New Zealand’s tax-benefit system, paper presented to the Basic Income European Network (BIEN) international conference; Vienna, Austria, 12-14 September 1996.
(Note that in this paper, I used the terms ‘full universal basic income’ and ‘adequate universal basic income’. My use here of words such as ‘full’ and ‘adequate’ are suggestive of the aspiration that a basic income could be more than a basic dividend; rather a substitute for a wage, and therefore a possible disincentive to engage with the labour market. However my emphasis in this paper – and subsequent papers – was the ‘social dividend’, a basic universal income that might eventually evolve into a non-basic payment.)

If there were any doubts about Jacinda Ardern’s ability to deliver the goods as a campaigner, then they were quashed by her masterful performance against Australian Prime Minister Scott Morrison on Friday.

Ardern made what is being reported as a “stunning attack” on the Australian Government, while standing alongside the Australian PM in a highly-orchestrated press conference. She declared his Government were in the wrong for deporting people to New Zealand who have very little connection with our country. She said, “We have a simple request. Send back Kiwis, genuine Kiwis – do not deport your people and your problems.” And she concluded: “We will own our people. We ask that Australia stop exporting theirs.”

Ardern’s extraordinary attack, and the reaction, is well covered by the Herald here: NZ Prime Minister Jacinda Ardern lashes Australian Prime Minister Scott Morrison – the reaction.

For a good report on the press conference, see Henry Cooke’s account: Extraordinary scene as Jacinda Ardern directly confronts Scott Morrison over deportations. He says the confrontation was highly unusual: “Ardern went for the jugular”, Morrison responded strongly, and “They didn’t just make their points and leave it at that – they directly argued with each other”.

Cooke looks at the motivations of both sides: “There was no softening of positions on either side. Both prime ministers were clearly playing to domestic audiences. Morrison got to look tough on criminals while Ardern got to look like a leader unafraid to smash another politician in the face when needed. It was quite a show.”

I’ve written for the Guardian today about the political calculations behind the PM’s performance – see: Taking on Scott Morrison over deportees is a win-win strategy for Jacinda Ardern.

In one respect, the attack is clearly an attempt by the Government to deal with the Opposition’s strong push on law and order issues: “It’s election year and National started the year ramping up talk about criminal gangs in New Zealand. While that’s to be expected every election year, there is evidence that the Australian deportation policy has contributed not just to growth in criminal activity but, alarmingly, to the establishment of a whole new gang culture imported from Australia.”

I explain the PM couldn’t let the National own this issue: “Ardern needed to be seen to be doing something about it, and directly confronting Morrison on his home turf certainly got everyone’s attention. Making this stand on the international stage, in such a commanding fashion, also ensured that opposition leader Simon Bridges was overshadowed and left with few options to attack her on.”

This was a departure for Ardern, who has been relatively quiet in dealing with other world leaders recently over other big issues. For example, last year she met with Donald Trump but did not raise any contentious issues such as climate change – see my Guardian column at the time: Ardern was supposed to be the anti-Trump, but she failed to speak truth to power.

So, Ardern has answered her critics and shown she will stand up to bigger countries when necessary. As I argued in today’s Guardian column, “Her supporters want to see her ruffle feathers internationally on issues of principle and humanitarianism, especially at a time when critics say she has been too pragmatic. Compassion, particularly when it comes to migrants, is one of her defining political characteristics, and in Scott Morrison she has almost the perfect foil. Standing up for the rights of New Zealand citizens abroad is always a winner.”

For more background on the political threat the deportation issue poses for the Government, and why Ardern had to respond so strongly, see Luke Malpass’ PM Jacinda Ardern gets a win in ScoMo’s territory.

He explains that deportations are linked to concern about a rise in gang problems here, made even more galling by the fact that New Zealand doesn’t treat Australians in the same way. Malpass says the deportation move “has sparked a crime wave in New Zealand, boosted gang membership and introduced a whole new Australian gang, the Comancheros, to these shores. It is a fair gripe. Under New Zealand law, with few exceptions, if you’ve been on these shores for 10 years you are considered New Zealand’s problem.”

National has started to make political capital out of this, and have been campaigning hard on the need to reciprocate and deport Australians, and this is worrying Labour: “The fascinating thing domestically is how the gangs and deportations issue is clearly now starting to nip at Labour’s heels. It has not been the party of law and order for many decades”, but with Ardern’s response on Friday, “Law and order just became a bigger part of the election campaign.”

In terms of impressing supporters, the strategy worked. For example, Labour blogger Greg Presland wrote about how Ardern had effectively snookered Bridges and shown her toughness: “National with its latest tough on crime approach will be hating this. Not only has Jacinda again displayed a backbone of steel but she has again shown that she is one of the most remarkable International leaders. The justice of her argument is clear.  And she has trashed traditional notions of how New Zealand Australia relations are conducted when making her point” – see: Do not deport your people and your problems to New Zealand.

Even some of the more sceptical voices on the left watched Ardern’s performance with great appreciation. For example, blogger Martyn Bradbury says “Jacinda stepped up……she is just such a class act isn’t she? She has acted with real leadership… She’s just amazing” – see: Jacinda robs Simon Bridges of his Australian thunder.

Bradbury also sees the electoral strategy as very smart, saying “Last week I thought Bridges had made a break through moment by promising to deport Australian criminals back home to Australia”, but now “she makes Simon’s earlier announcement of reciprocity look blunt and desperate”.

Ardern’s strong attack on the Australian Government over deportations was justified, according to Guardian reporter Ben Doherty, who specialises in immigration issues. He says: “Australia is unambiguously in the wrong here, and it has been consistently for years” – see: Not much love actually: Jacinda Ardern was right to call out Australia’s ‘corrosive’ policies.

Doherty argues: “countries are responsible for the people they create…They are Australian, and they are Australia’s responsibility. Just as parents can’t spurn their children who behave badly, states can’t simply foist people they find difficult onto other countries. The Australian government mounts arguments around national security and safety, but they are spurious, and made for the hackneyed political gain of being seen as tough on crime, and harsh towards ‘others’.”

Although Ardern is being widely celebrated for speaking out so strongly on Australia’s treatment of deportees, there are rumblings about her silence, so far, on controversial statements from one of her own ministers. On Saturday, NZ First’s Shane Jones went on Newshub Nation to say this about immigration: “If you want another million, 2 million, 3 million people, we should debate it and there should be a mandate, rather than opening up the options, unfettered, and everyone comes here from New Delhi. I don’t like that idea at all. I think the number of students that have come from India have ruined many of those institutions” – see Dan Satherley’s Shane Jones says Indian students have ‘ruined’ NZ academic institutions.

David Cormack suggests there is a clear mismatch between Ardern’s treatment of Morrison and her continued leniency towards Jones: “So as our Prime Minister was standing next to a man who has the leadership skills of a potato and telling him to change Australia’s domestic policy on deporting criminals, a man who sits in her Cabinet was back at home belching out vile racism. And will she say anything about it? I hope so, but I’m not holding my breath” – see: Jacinda Ardern’s deafening silence over Shane Jones ‘racist’ comments (paywalled).

Finally, comedian Oscar Kightley is impressed with Ardern’s press conference on Friday, saying it “felt like a turning point in terms of our relationship with Australia. Finally, a leader from here was willing to stand up and say what New Zealanders have been thinking since this discriminatory treatment started – see his broader outline of how this latest spat fits into the long-running relationship between the two countries: Jacinda Ardern’s shirtfront on ScoMo a turning point in trans-Tasman relations.

Prime Minister Jacinda Ardern won power in 2017 on the basis of statements such as “My goal is to eradicate child poverty in New Zealand”. The Government’s progress on child poverty will be under scrutiny at this year’s general election, but progress is slow, and many are claiming not enough is being done to address this urgent problem.

Statistics NZ has just published details of child poverty levels for the last few years, as required under the new Child Poverty Reduction Act. For the best report on this, see Sarah Robson’s New figures show little change in child poverty. She reports: “for the year ended June 2019, there was no significant change to the percentage of children living in material hardship, compared to the previous year – remaining at about 13 percent, or one in eight children”.

The Children’s Commissioner Andrew Becroft has described the figures as “underwhelming”.

The problem is the statistics can be interpreted in different ways – or at least cherry-picked by supporters and critics. Also, the statistics are limited in what they measure, particularly in terms of the time periods involved.

Some critics to the left and the right of the Government are pointing to various elements of the report to say things are getting worse, while the Government is highlighting elements that show they’re making progress.

Overall, there’s probably a consensus that if improvements have been made, they are marginal, and much more needs to be done to combat child poverty.

Interpretation of the child poverty statistics

Jason Attewell of Stats NZ gave an insight yesterday into why measures of poverty are contested and interpreted differently: “Now child poverty is a real complex issue, and it’s really hard to define who’s poor and who’s not poor… So we don’t look at just one measure we look at nine measures across.”

For the best discussion of the different interpretations of the new stats, see Jason Walls’ PM Jacinda Ardern and National’s Simon Bridges spin child poverty numbers – but who’s right? (paywalled). He points to the Government and Opposition arguments on the latest report, and declares “Both are right but for different reasons.”

Here’s the Government’s interpretation: “Ardern used what is known as the after-housing costs measure to argue her case for successfully combating child poverty. That showed that after housing costs, 235,400 kids lived in homes with less than 50 per cent of the overall median household income, in the year to June 2019. That’s a drop of 18,400 children, or a 2 per cent fall compared to the previous year.”

Here’s the Opposition interpretation: “Bridges used the numbers to suggest child poverty was getting much worse ‘under Jacinda Ardern’. He used the before-housing cost measure for the bottom 60 per cent of households and compared the year to June 2017 figures with those from 2019. On this measure, the 20,000 figure is correct – 243,300 kids were in this category in 2017, compared with 263,400 in 2019.”

In contrast, Walls points out that there is arguably a third and more important interpretation of the figures: “the most important measure – according to Children’s Commissioner Andrew Becroft – was actually increasing. Material hardship, which measures the things most people would consider to be essentials – such as access to fresh fruit and vegetables, going to the doctor and the ability to pay bills on time – increase by just over 4000 in the year to June last year.”

For further discussion of the different measures of child poverty and what is changing, see Thomas Manch’s Child poverty: Numbers show marginal change, but more children in material hardship. This includes reporting of Stats NZ’s principal statistician Diane Ramsay, who “said she could not be confident there was a downward trend in the figures due to margin, and results in the coming years would clarify this.”

Also, see Max Rashbrooke’s analysis, which is more positive, suggesting that the PM should be relieved to finally have “a tangible – if tentative – sign of progress” – see: Child poverty stats promising, but more is needed.

Rashbrooke also points to the contrast with what was occurring under the last National Government: “If the improvements are real, they will be all the more impressive when seen in the light of the previous National-led governments, of which the best that can be said is that they maintained, overall, a very high level of poverty. In their nine years in power, poverty fell on some measures but increased on others, and in general seemed to be becoming cemented into the foundations of New Zealand life. We may look back on this moment, then, and see it as a turning point”.

Criticism about the failure to deliver

Critics on both left and right of Labour are saying the Government is failing to deliver the promised improvements in child poverty.

On the right, Mike Hosking is calling this out as “another promise not met”, which he says is especially damaging for the PM, as child poverty reduction “was the Prime Minister’s calling card” – see: Child poverty is the KiwiBuild of social failure. Hosking concludes: “Every social indicator has gone backwards – food handouts, housing queues, jobless payments and poverty. Every single one of them in the wrong direction.”

Heather du Plessis Allan also has a hard-hitting take on the findings – see: Child poverty figures shows PM is not helping those she promised to. She says this about Ardern: “Remember when she promised to lift 100,000 children out of poverty by 2020. Well, it’s 2020, that is so far from happening… it’s just gutting. We expect centre-left governments to come and do the best they can for people at the bottom of the heap, because those people are there.”

Du Plessis Allan warns it will damage Labour and Ardern’s credibility with their own supporters: “It has charities, NGOs, churches, unions, all telling them to get on with it. Labour’s entire support base is telling them to help people, but they’re not. How can they expect those people to re-elect them or even respect them? How can the Prime Minister ever say again that she will help the worst off and expect us to believe it? Today’s figures haven’t just hurt the government’s credibility; they’ve hurt the Prime Minister’s.”

Those NGOs are also speaking out. Child Poverty Action Group spokesperson Susan St John says: “Put simply: these statistics do not show any change for the children living in the worst, most entrenched poverty… This confirms our view that the Families Package (implemented July 2018) was not designed to give the necessary income boost to those in the deepest poverty. This picture is unlikely to change when the full Families Package is counted in the next report due in 2021” – see: The latest child poverty statistics are a wake-up call.

Her group says “child poverty requires urgent and immediate action. Meaningful adjustments to the benefit system and working for families must not wait until after the election for implementation.”

And even in Max Rashbrooke’s cautiously congratulatory account, he warns much more action is needed, saying: “the government will have to marshal resources of which it has only just begun to dream. Most of its efforts so far have focused on taking those who are just below the poverty line and lifting them just over it. That is valuable, and makes a real difference to families’ lives. But there are still tens of thousands of families in far deeper poverty. Their situation, the new data suggests, has barely improved.”

Rashbrooke says the PM needs to take a bolder approach: “That will require considerably more political courage from a leader who has so far governed cautiously. But it is the reality of the task she has set herself. The early steps she has made, though valuable, may turn out to have been the easiest.”

Ardern is promising more, and she is reported as believing that her government is “on track” to meet its promises. She says part of the problem is that the latest statistics don’t reflect how much has recently been done – see Zane Small’s Prime Minister Jacinda Ardern confident child poverty reduction policies ‘yet to show’ full results.

Finally, last month the Child Poverty Action Group commissioned Spinoff cartoonist Toby Morris to illustrate the need for “the government to fix the broken welfare system so all children and families can thrive” – see: Fairer Future: Fixing Poverty in Aotearoa.

How rotten is New Zealand, given the state of poverty at the end of 2019? And why do politicians and the public allow it? These are the questions that might be asked in the lead up to Christmas this year, given the wealth of information we have on disadvantage and suffering at the moment.

Auckland City Mission is currently carrying out their annual distribution of Christmas care packages across the city, but the reports resulting from this are pretty bleak. This week the head of community services development for the Mission, Brook Turner, pointed to the rising poverty and desperate situations facing beneficiary and working families as we come into the holiday season. He says “At Christmas that’s a pretty rotten thing to be happening to Kiwis” – see Carmen Parahi’s Auckland City Mission Christmas service sees families queue all night for parcels.

According to this report, the City Mission now distributes its relief from four centres instead of the traditional CBD one, and demand is badly exceeding supply: “Each centre is part of the Auckland City Mission’s Christmas service to distribute 200 family care packages per day for eight days. On the first day each centre reported turning away 50-100 families. They were expecting people would miss out every day. At Ngā Whare Waatea Marae, Māori Wardens were on site for most of the night keeping people safe as they queued. By 10pm, 60 families were camped and at 6.30am several hundred were waiting. Many missed out by the time the gate opened.”

Some families are travelling from long distances outside of Auckland to queue overnight. The Mission’s Turner reflects on this: “We were quite astonished by that. It speaks to how far those who are in need are willing to go to get the help they need.” He said it was a sign of rising inequality, food insecurity, living costs and issues around financial hardship, not just for those on benefits but also people who were working.”

TVNZ’s John Campbell visited some of those queuing at the City Mission’s Eden Park distribution centre this week, saying the existence of the centres is “a stark reminder of poverty in New Zealand”, and reported that of those camping out, “30 to 40 of the 200 people at Eden Park were children” – see: John Campbell kneels next to sleeping child at food bank, livid at state of poverty in NZ.

Reflecting on the situation, Campbell said, “People are sleeping on concrete outside and they are sleeping to get food and presents for Christmas. Imagine having to do that”. Furthermore: “This is our country and there’s no point pretending this isn’t our country because it is, and those of us who are journalist’s see it quite often. Those of us who work in this sector see it all the time.”

Campbell reports on one mother queuing at the centre: “She caught the bus before 6am, carrying two suitcases to bring back kai for her whānau, because otherwise they wouldn’t have enough.” Apparently, “The mother-of-one said she goes without power most weekends, telling her family it’s ‘like camping’.”

The poor state we’re in

The Auckland City Mission has been trying to estimate the severity of New Zealand’s food shortage problem. General Manager for Social Services Helen Robinson, who has just completed a MA on food insecurity, says “about 500,000 Kiwis are too poor to afford appropriate food” – see 1News’ ‘This is a public health crisis’ – City Mission calls for food insecurity measure to understand issue of poverty.

The government no longer measures food poverty, and that’s something Robinson is trying to change: “With the best information the mission has, we believe about 10 per cent of New Zealand is food insecure. So [there are] about 500,000 people in our country, like the hundreds that you have seen today, who don’t have enough appropriate food. What we’re calling for is to measure that.”

Robinson has also written about her disbelief that the situation is so bad: “I couldn’t understand why, that in New Zealand – this beautiful land of plenty, people simply didn’t have enough food and were forced to seek support to feed themselves and their families” – see: Christmas is about food and family – but not for all.

And it’s only getting worse: “Over the last few years, the need has increased. Our most recent information shows a 40 percent year-to-year increase in demand for emergency food parcels.” And, it’s not just a problem of those without work: “Some are working more than one job but still can’t meet all their living costs.” Such people, according to a survey of 650 people using the Mission’s food bank, are having to frequently “choose between buying food and meeting other essential costs.”

For more on the Auckland City Mission’s “8 Days of Christmas” operations, and why it’s expanded to new distribution centres around the city, you can listen to an interesting RNZ documentary – see Liu Chen’s Food parcels’ distribution on four sites to avoid ‘humiliating’ queues. Chris Farrelly, the Auckland City Missioner, explains why they shifted to four new centres outside of the CBD: “These long queues in Hobson Street stretching all night – we stopped that. There was no dignity. It was quite a humiliating”.

Other agencies are also reporting a worsening situation for those at the bottom. Trevor McGlinchey from the Council of Christian Social Services reports that charities are “telling him that demand for food is growing” – see Sarah Robson’s 10% of Kiwis experiencing food insecurity. Apparently, “An organisation that may have been distributing 100 food parcels a month five years ago today will be distributing 200 to 300 food parcels a month.”

Similarly, see Cate Broughton’s Overwhelmed charities say child poverty in NZ as high as ever. This article reports on the charity KidsCan, which helps children in low-decile schools, saying it’s facing “continued high demand for its support”, and over “the past five years the number of schools supported has almost doubled, from 388 to 740.”

New reports on poverty 

Last week the Children’s Commission released its annual stocktake of the state of child poverty – the Child Poverty Monitor – produced in conjunction with the University of Otago, and it was generally bad news – see Thomas Manch’s Child Poverty Monitor shows 148,000 children are living in material hardship.

According to this report, “More than one in 10 children in New Zealand are living in material hardship, and tens of thousands are going without healthy food.” And Children’s Commissioner Andrew Becroft is quoted saying that families are not able to keep up with the “ever-increasing costs of daily living, like rent and putting food on the table”.

Elsewhere, Becroft warned “We are in danger, as a country, of marginalising a group of kids and reinforcing generational disadvantage”. See Dan Satherley’s report, More Kiwi kids living in low-income households, suffering hardship, for more details of the report.

Another report, came out recently about working households living in poverty, which was carried out by AUT’s New Zealand Work Research Institute on behalf of the Human Rights Commission, and claims to be the most detailed research ever carried out on the working poor in New Zealand – see Vita Molyneux’s The staggering number of Kiwi workers living in poverty.

According to this, 50,000 households – or seven per cent – are living in poverty “despite containing at least one person who is in paid work.” The report warns of a renting “underclass” being formed due to the extreme cost of housing.

Worsening inequality

The Ministry of Social Development has recently released its annual statistical report on household incomes – you can read this here: Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2018.

This report “makes for depressing if not surprising reading” according inequality researcher Max Rashbrooke, who provides a very useful overview in his blog post, Inequality and poverty: A summary of the 2019 household incomes in NZ report.

He says that, “Economic inequality remains at the very high level the country was left with in the late 1990s following 15 years of market-based reforms.” According to his calculations, based on the report, New Zealand’s level of inequality are now “noticeably higher than the OECD average”.

And Rashbrooke suggests that things have even worsened compared to Britain: “Looking at the share of income going to the various fifths (quintiles) of the population, New Zealand is now slightly more unequal than the supposedly class-ridden UK, with its poorest fifth taking less, and its richest fifth taking more, than their British counterparts”

Part of the problem is the global financial crisis that occurred a decade ago, leading to dramatic changes. However, in the decade since the crisis hit, the Herald’s business editor Liam Dann says the burden has been shared very unevenly, and not everyone has fared so badly: “if you started the decade with assets it’s been a golden age. If you started the decade poor you’ve probably gone backwards. While structural inequality has always been part and parcel of capitalism, it was supercharged by the fallout from the global financial crisis” – see: The bad joke that spoiled a golden decade (paywalled)..

Looking at changes in wealth over the decade, Dann says: “If you had all your wealth in the NZX-50 since the end of 2009, you’d have seen it increase by more than 300 per cent. If you had your wealth in housing you’d have doubled it – at least. If you were relying on wage growth to get ahead, well, I hope you got a promotion or two.” He therefore concludes that “the world still seems an uglier, less friendly place in 2019.”

Finally, although the ultimate solutions to the problems of poverty are political, individuals can still ameliorate the rotten symptoms of a severely unequal system, and Josephine Franks details how in her article, Giving at Christmas: How you can help Auckland’s homeless and others in need.

Great strides have been taken to empower women and girls in the Asia-Pacific region since the Fourth World Conference on Women in Beijing adopted an ambitious global agenda to achieve gender equality twenty-five years ago. Gender parity has been achieved in primary education. Maternal mortality has been halved. Today, the region’s governments are committed to overcoming the persistent challenges of discrimination, gender-based violence and women’s unequal access to resources and decision-making.

The Asia-Pacific Ministerial Conference for the Beijing+25 Review will meet in Bangkok this week to explore how more Beijing Declaration commitments can be met to improve the lives of women and girls in the region. Asia-Pacific governments have reviewed their progress and identified three priority areas, areas where action is imperative to accelerate progress in the coming five years.

First, we must end violence against women, such a severe human rights violation which continues to hinder women’s empowerment. As many as one in two women in the region have experienced physical or sexual violence from an intimate partner in the last 12 months. Countries in the region have adopted laws and policies to prevent and respond to violence against women. This is progress on which we must build. The Association of Southeast Asian Nations (ASEAN) in 2015 adopted the Convention against Trafficking in Persons, Especially Women and Children, and a Regional Plan of Action on the Elimination of Violence Against Women in 2018. Free legal services, hotlines and digital applications to report violence, and emergency shelters and safe spaces for survivors are increasingly common. New partnerships are underway challenging stigma and stereotypes, working directly with boys and men. However, more investment is needed to prevent violence, and to ensure all women and girls who experienced violence will have access to justice and essential services. 

Second, women’s political representation must be increased in Asia and the Pacific. Our region’s representation rates are behind the global average. Only one in five parliamentarians are women in Asia-Pacific. Despite governments committing to gender parity in decision making 25 years ago in Beijing, the region has seen the share of women in parliament grow at just 2.2 percentage points annually over the past two decades. We must therefore look to where faster progress has been made. In several countries, quotas have helped increase the number of women in parliament. These need to be further expanded and complemented with targeted, quality training and mentoring for women leaders and removing the barriers of negative norms, stigma and stereotypes of women in politics and as leaders.

Third, economic empowerment remains key. Only half the women in our region are in paid work, compared with 80 percent of men. Ours is the only region in the world where women’s labour-force participation is decreasing in the past 10 years. Two out of three working women are in the informal sector, often with no social protection and in hazardous conditions. Legislative measures to deliver equal pay and policies to ensure the recruitment, retention and promotion of women must be part of the solution, as must supporting the transition of women from informal to formal work sectors. Digital and financial inclusion measures can empower women to unleash their entrepreneurial potential and support economic growth, jobs and poverty reduction. Action has been taken in all these areas by individual countries. They can be given scale by countries working at the regional level.

Next year will mark the convergence of the 25 years of implementation of the Beijing Platform for Action and the five-year milestone of the 2030 Agenda for Sustainable Development. Investments and financing for gender equality need to be fully committed and resourced to realize these ambitious targets and commitments.  Our hope is that the Asia-Pacific Ministerial Conference for the Beijing+25 Review will help provide the necessary momentum. Now is time to craft priority actions for change and accelerate the realization of human rights and opportunities for all women and men, girls and boys. Let us remain ambitious in our vision, and steadfast in our determination to achieve gender equality and women empowerment in Asia and the Pacific.

About the authors:

Armida Salsiah Alisjahbana, Under-Secretary-General of the United Nations and Executive Secretary of ESCAP.

Phumzile Mlambo-Ngcuka, Under-Secretary-General of the United Nations and Executive Director of UN Women.