The Spinoff: Ruth Richardson’s state honour is a slap in the face for the poor

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In the early 1990s, two Porirua preschoolers burned to death when their state house was set alight by a candle their family had begun using after the power was cut off. They had been forced to this extremity by a National government that, obsessed by “market forces”, had decided to remove their housing subsidy and require them to pay market rents instead. This sharp rise in costs had left them unable to pay their power bill; hence the candle.

Labour MP Graham Kelly caused an uproar in parliament when he attributed these deaths to National’s policies – but even allowing for imponderable factors, like whether a candle falls over or not, he was in the broadest sense right. Policies that target the poor always have consequences in the end. And no one targeted the poor harder than Ruth Richardson, who on Monday was made a Companion to the New Zealand Order of Merit.

Alongside the market-rent reforms, Richardson is most notorious for the 1991 “mother of all budgets”, which cut the benefits of some of the poorest and most vulnerable New Zealanders by up to one-quarter. In a move familiar throughout history, she decided that the burden of tackling New Zealand’s (admittedly severe) budget deficit was to fall disproportionately on the poor, rather than those better able to bear it.

The result was immediate: a doubling of the number of those living in the most extreme poverty – that is, on less than 40% of the typical income – from 4% in 1990 to 8% two years later. Most policies are much slower to show their effects; Richardson is among a select few who can claim to have doubled poverty overnight.

The effects of this stark rise, quite apart from the pain and misery inflicted on families, have spread right throughout New Zealand. Food banks used to be virtually unknown in this country; in the 1990s they became commonplace.

Unable to afford to heat their homes, or indeed pay the rent, multiple families began living under one roof, enduring the cold or huddling together for warmth. Mould and damp proliferated.

Diseases like rheumatic fever, long since eliminated in other developed nations, flourished in these conditions, wrecking childhoods and ending lives prematurely. A sharp uptick in the hospitalisations of children for medical conditions – from 50 per 1,000 to 70 per 1,000 – began in 1992, just after Richardson’s budget. While she was not, of course, the sole author of these misfortunes, she undoubtedly wrote much of the script.

Child poverty leaves scars that later affluence never really erases. Children born into hardship have, in adulthood, twice the rate of heart conditions of those born into wealth. They also have far lower reading scores and educational results.

Quite apart from being devastating in their own right, these deficits create colossal financial costs: the annual bill from child poverty in this country is estimated at anywhere between $12 billion and $21 billion. This is particularly ironic because Richardson’s legacy on the right is one of financial rectitude: she is seen, in particular, as the author of the 1994 Fiscal Responsibility Act, which aimed to improve the transparency and long-term management of the government’s accounts. But not only is this relatively small beer compared to the appalling damage poverty inflicts on people’s lives, the long-term economic costs of increased hardship are an example of massive financial irresponsibility.

Not that Richardson has ever been able to acknowledge as much. Interviewed by the academic Andrew Dean a decade ago, she denied her policies had resulted in any wider harm: “Over time, was there a social cost? No, there was a social benefit.”

That, then, is the person the New Zealand state decided to honour this week: someone who not only did immense damage to the country’s poorest but is also quite disconnected from the realities of that harm. The puzzle is less – as some commentators suggested – that it took so long for her to be recognised, but rather that she has been recognised at all.

Maybe, though, we should not be surprised. Over in the UK, a similar strategy of slashing government budgets and benefit payments took place under the Conservatives between 2010 and 2024. This austerity cut access to the social services on which ordinary people rely, reduced ambulance services, and sparked poverty-related “deaths of despair”. All up, it is conservatively estimated by researchers to have caused 190,000 preventable deaths.

The man most responsible for this social devastation, former chancellor George Osborne, nonetheless occupies a gilded position in British life, having moved smoothly into editing the Evening Standard newspaper and pontificating on global politics. Inflicting misery on the poor is, in short, socially acceptable as long as it is clothed in the classic establishment rhetoric of taking “difficult” choices, “balancing” the books and fiscal “responsibility”. The poor may be, as the Christians say, always with us, but that does not guarantee that their lives will ever be accorded the proper respect.

The Post: How the pay equity ‘gift from the Government’ will keep on giving

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f you’d been underpaid by $18,000 over the last few years, you’d be fuming. Which is the situation that faces Tamara Baddeley, a Napier-based care worker who – in return for her socially essential labour – is paid the princely sum of $26.94 an hour.

Visiting the elderly and the vulnerable in their homes, she lifts them out of bed and gets them showered, fits catheters and colostomy bags, and provides much-needed social support. The work is mentally, physically and emotionally demanding. And it’d be much better paid if it were done mostly by men.

A decade ago, another care worker, Kristine Bartlett, won a landmark case proving that she and her colleagues were underpaid purely because they were women. That, in turn, forced the National government in 2017 to approve a $2 billion pay settlement for care workers and pass a law enabling further pay equity cases.

Having previously followed the Bartlett case, I must admit that at this point I switched off, thinking: job done, justice served. But not so.

Although Labour amended the law in 2020 to make pay equity claims easier, and approved several large deals, a further problem loomed. The Bartlett settlement gave care workers the biggest pay rise of their life, but that boost was rapidly eroded by inflation and other factors. And when the settlement came up for renewal in 2022, Labour, under pressure to constrain spending, balked at finding the money to once again close the gap between care workers and men in equivalently skilled professions.

Hence the situation in which Baddeley and her colleagues find themselves. She estimates that, in the 1000 days since their settlement lapsed, they would each have earned $18,000 extra had they got another 20% pay rise like the one Bartlett earned them in 2017.

When I interviewed Baddeley a few years back, she was already feeling “taken for granted, underappreciated, overworked and underpaid”. And since the current Government gutted the pay equity process in the Budget, dishonestly scuttling 33 deals already underway, those feelings have only intensified.

Much of the current anger is rightly directed at the coalition, which took away an estimated $2.7b a year in future settlements for care workers, midwives and the like. According to RNZ political editor Jo Moir, ministers “don’t think they are losing” on this issue, the public having been scared by the big costs being waved around. But that looks, for the moment, like a delusion.

Polling released last week by Talbot Mills showed just 29% of people think the pay-equity cuts are “a sensible way to reduce government spending”, while 62% believe they are “putting cost-cutting ahead of fairness”. The pay-equity message wins by a two-to-one margin.

Whether that sentiment lasts, once the media spotlight has moved on, depends heavily on how well the unions and other campaigners mobilise the issue. It is, as one activist said to me recently, a gift from the Government.

It crystallises the wider discrimination that women experience, harnessing and focusing the anger of the lower paid in particular. It could replicate – even if to a lesser extent – the Treaty Principles Bill’s mobilisation of Māori. And it exacerbates two of Prime Minister Christopher Luxon’s great political weaknesses: the public’s sense that he is out of touch with the concerns of ordinary folk, and his poor polling among women.

National’s only real strategy here is to argue that the male-dominated occupations with which women are claiming parity involve utterly different work; the comparisons are thus “ridiculous”. But such comparisons are based not on an exact job match but on finding occupations with similar levels of training, responsibility and experience.

Once the public understands that, it no longer looks so silly to claim that social workers should be paid the same as air traffic controllers. Or that care workers like Baddeley should earn as much as far better paid prison officers.

The public finances, however, remain a problem. Labour leader Chris Hipkins has been careful not to promise he would restore the $12.8 billion the Government has stolen from pay-equity claims over the next four years.

He can, quite reasonably, argue that it’s unclear how National has calculated that figure. But, in light of Labour’s past failure, one might also reasonably suspect his party is reluctant to fully fund pay equity if that jeopardises other goals.

While, in short, National must take the largest share of the blame for the current situation, a deeper, more disturbing truth remains. The caring work carried out by women is often of benefit predominantly to society, rather than any individual client, and so society needs to pay for it.

But we have not, under a government of any stripe, been willing to find all the requisite funds. We have never properly valued women’s work. That is the bigger failing that goes beyond current politics, and the basic attitude that must change.

The Spinoff: A budget for machines, not midwives

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Machines, not midwives: that, according to Thursday’s budget, is what matters to the New Zealand economy.

The centrepiece of the budget, handed down with the usual pomp and ceremony by finance minister Nicola Willis, was a $1.7bn tax break by which businesses investing in “productive assets” – machinery, tools, equipment and the like – can deduct 20% of the value of that investment from their Inland Revenue bill.

The broad consensus is that this move makes sense on its own terms, encouraging investment in the capital stock that can help boost productivity. It is, though, somewhat underwhelming: even measured over 20 years, it adds just 1% to GDP and – even more speculatively – 1.5% to wages.

More telling still was the contrast with what’s not being funded. Most obviously, and notoriously, that’s pay equity. The government has banked $12.8bn by gutting the claims currently being taken by workers in female-dominated industries who, the courts have found, are being underpaid purely because they are women. Those workers include Plunket nurses, midwives, and the care and support staff who help look after elderly and vulnerable people in their own homes.

Willis insisted money had been put aside for a much-reduced version of the pay equity process. She refused, though, to say how much, insisting that disclosure would undermine the Crown’s negotiating position – even though, in this instance, the total sum could presumably have been disclosed without making it clear to any industry how much was set aside for their specific claim.

We are free to speculate, then, that the government may have put aside just tens of millions or hundreds of millions of dollars, rather than $12.8bn, to address the historic underpayment of female workers. That, in turn, makes clear the government’s priorities. The coalition parties like big, grunty bits of kit – the sort of equipment that, despite changes in the workforce, is probably still largely owned and deployed by men – but they are not particularly interested in paying women what they are worth. 

Indeed, the annual $1.7bn cost of the business tax break is easily covered by the roughly $3bn annual cut to pay equity. It’s pretty clear, then, what matters. Machines, yes. Midwives? No.

Robbing Peter to pay Paul

Along similar lines, the rest of the budget consists of initiatives that help certain groups but only at the expense of others. It’s a familiar story of robbing Peter to pay Paul – or, given the above facts, robbing Pamela to pay Paul.

Sixteen and seventeen-year-olds, for instance, will be eligible for the annual KiwiSaver government contribution. But that contribution has been halved from $520 to $260. And even while the government is encouraging young people to save and be independent, it is telling them that, if they are aged 18 or 19, they won’t get Jobseeker Support if their parents are in a position to support them. Does this make any kind of coherent sense? Not obviously.

Elsewhere, support for children with learning difficulties gets a dramatic, long-overdue and much-welcome boost. But this is funded in part by taking, over a four-year period, hundreds of millions of dollars away from Kāhui Ako, a scheme that was producing at least modest benefits by helping teachers work more closely together, spread successes and diminish the isolation experienced by struggling schools.

Some households, meanwhile, will get around $7 a week more because the income threshold at which they start to lose their Working for Families payments is being raised from about $43,000 to $45,000. Once they earn over that threshold, though, the rate at which those payments are clawed back will increase. The state giveth with one hand, and taketh away with another. Meanwhile families earning just $79,000 will start to lose their entitlement to the Best Start payment provided during their newborn’s first year.

There are countless more cuts – adding up to over $2bn – in the budget, many of them seemingly petty: millions of dollars taken from schemes for Māori teachers, energy conservation programmes, RNZ and others. It will be interesting to see whether the government pays the price for this, in the form of story after story about the damage done by hundreds of lost programmes, or whether that is drowned out by the good vibes from the business tax break and other measures.

Ardern’s child poverty promises abandoned

The budget’s lack of basic substance is most badly exposed by its plan to tackle – or rather, not tackle – child poverty. Back in 2018, Jacinda Ardern set ambitious targets for cutting hardship, pledging to reduce from 16% to 5% the proportion of families living on less than half the typical income.

Her government got about one-third of the way before progress stalled post-pandemic. Now, National’s target is literally to do nothing: to maintain the current 12% of children living in poverty for ever and ever, amen. The Treasury’s official projection is that this target will be achieved, because – from a social point of view – this is essentially what the budget is about: treading water.

The government’s opponents will, nonetheless, struggle to lend a telling blow on this budget, because it is not really about slash-and-burn. But the longer-term trend is clear.

Despite the growing calls on the state – to tackle poverty, to address the effects of climate change, and to care for an ageing population – Willis is determined to shrink government spending as a proportion of GDP from 33% to 31%. A diminishing share of our annual income will be spent on solving collective problems.

Yes, the New Zealand government is currently spending more than it earns. But, given that the wealthiest New Zealanders pay half the tax rate of we average folk, the best way to close that gap is to increase tax rates at the upper end. Instead, we have a government that – lest we forget – is still handing out $2.9bn in tax cuts to landlords.

There we have it, then: a budget that prioritises machines over midwives, funds new schemes only by cutting other successful ones, and generally treads water. New Zealand is a country with big structural problems. It is not clear that this budget solves any of them.

The Post: Throwback Budget aiming for ‘holy grail’ target

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Tribute bands never have quite the same force as the originals they copy; and so it is with governments. Thursday’s Budget continued National’s loose homage to the state-shrinking days of the 1990s, sounding many of the same notes – spending cuts, trickle-down economics, and the diminution of collective insurance – though only as a vague, watery echo.

Conservatives will say there were no budget cuts overall: the state’s core spending is projected to rise from $142b in this year to $150b in the next. But government spending has to rise just to keep pace with inflation, public sector wage rises and increased demands for medical treatment.

The truer measure is state spending as a proportion of GDP, which tells us how much of our collective revenue we are devoting – through government – to solving our collective problems. On this measure, government spending will shrink from 33% in 2024 to 30.9% in 2029, close to the conservatives’ “holy grail” of 30% of GDP. This leaves less money, relatively speaking, for tackling collective challenges like poverty and climate change; our collective support for each other will diminish.

It has never been explained why this 30% figure is so magical. And indeed it is hard to justify.

As my columns have repeatedly pointed out, the governments that deliver the best public services in the world – services envied by New Zealanders who have been lucky enough to experience them overseas – often spend 35-40% of GDP. If we had their capital gains, inheritance and wealth taxes, we would have another $20-30b to spend on repairing our frayed public services.

Finance Minister Nicola Willis likes to point out, not unreasonably, that the government’s books should balance. When it comes to current spending – hospital visits, teachers’ salaries, conservation programmes – revenue should match expenses. Borrowing should be reserved for long-lasting capital expenses – hospital buildings, rail lines, classrooms – from which future generations benefit and for which they should pick up part of the tab.

Too often, the New Zealand government has borrowed to fund current spending. But that is a problem best solved not by cutting spending, but by increasing revenue. And given that, according to the Inland Revenue, the richest New Zealanders pay half the tax rate of we ordinary folk, there is plenty of room for the latter.

Willis’ cuts, of course, are nowhere near as savage as those carried out by Ruth Richardson and the other destructive figures of the 1990s, who slashed spending from 40% to 30%, cut benefits by up to one-fifth, and doubled poverty overnight. Nonetheless there are family resemblances.

The Budget’s signature initiative, a $1.7b tax rebate for firms buying new machinery, is claimed to lift wages by 1.5% over 20 years. Not only is this a small sum, it relies – rather improbably – on benevolent employers deciding to share revenue gains with their workers.

We have seen this movie before, in the era when trickle-down economics was the dominant mantra, and it doesn’t end pleasantly: between 1984 and 1999, incomes for the poorest half of the country fell.

There is, of course, a more direct way of raising wages – especially in female-dominated industries where, as the courts have established, workers are being underpaid purely because they are women. But the government has, notoriously, turned its back on pay equity, banking over $12b in “savings” by gutting those women’s pay claims and spending the money on military helicopters instead.

Elsewhere, the changes to Kiwisaver – halving the government’s annual contribution to $260, and lifting each individual’s default contribution to 4% of their salary – send an unmistakable message that, when it comes to saving for your retirement, you are increasingly on your own. Too bad for people who – through ill health, discrimination, abusive childhoods or whatever other reason – struggle to save. And if employers effectively avoid their required 4% contribution by taking it out of people’s pay, things look even bleaker.

It’s not that there is nothing good in the Budget. Large increases to learning support and disability services are very welcome. But, owing to the insistence on shrinking the state overall, these boosts are all paid for with other cuts – to Kiwisaver, to child payments for families earning over $79,000, and to other schooling schemes.

The government claims these cuts are all to under-performing programmes. But, as we have seen with last week’s scathing Auditor-General report on Oranga Tamariki’s cuts, they are just as likely to involve indefensible, scattergun attacks on successful NGOs.

Machinery-related tax breaks aside, the Budget provides little to help build a new economy. The target of investing 2% of GDP on research and development has been shelved, and the Budget apparently contained no new spending on the science and innovation that is crucial to restoring our economic fortunes.

Such moves, however, would require hands-on government. And that – as we all know – is not the 1990s vibe.

The Post: The ‘basic dignity’ of hospice care threatened by health crisis

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Just as people should be able to live well, so too should they be able to die well. But even that basic dignity is under threat from the slow-moving disaster unfolding in our health system.

Hospices, a vital institution of care for dying people and their loved ones, face a $16 million shortfall this financial year, according to a report commissioned from consultants Martin Jenkins. Yet health officials are adamant that they have no funds available to fix that shortfall.

“What they have said to us clearly is there’s no money,” Tina McCafferty tells me. The head of South Auckland’s Tōtara Hospice, she oversees an institution that provides highly specialised medical care – not to mention emotional, social and spiritual support – for 1400 individuals and their families each year.

A decade or so back, state funding met around 70% of the operating costs for Tōtara and the country’s 27 other publicly contracted hospices. Now, in the wake of inflation, increasingly complex care demands and other costs, state monies cover less than half their budgets.

Even successful efforts to fund-raise elsewhere just can’t keep up, McCafferty says: “Every way I find to make money, there’s another layer of [state] disinvestment.”

Seasoned observers are stunned by the state of play. Our health system has always lacked cash: medical unions estimate we spend billions of dollars a year less - as a proportion of GDP - than comparable developed countries. Nonetheless, governments have generally found funding to support basic initiatives and simply keep the lights on.

Now, though, there may not even be that, as the system creaks under the combined weight of growing medical need, Labour’s ill-advised restructure, a decades-long failure to recruit enough nurses and doctors, and a National-led Government determined to shrink the state’s presence in our lives.

Last year’s Budget trumpeted supposedly massive health spending, but once inflation, Holidays Act back-pay and capital investments were accounted for, it provided just $93m extra– a 0.4% increase in operational spending – during a system crisis.

While health will notionally be protected in next week’s Budget, the Government’s obsession with cutting expenses as a proportion of GDP, coupled with increased defence spending and a refusal to significantly raise taxes, will in reality leave very little to go around. (As hundreds of thousands of female workers have just found out.)

Hence the stonewalling of the hospices. Nor is this a case of capricious officials; decisions on health spending are being made at the very heart of government.

The terrible irony of this cost-cutting is that, as is so often the case, it doesn’t even save money. If hospices have to cut back on the care they provide to people at the end of life, those individuals will simply require more hospital beds, emergency-department visits and ambulance call-outs.

Martin Jenkins estimate that the $100m spent annually on hospice care saves $108m in costs elsewhere in the health system, while easing the suffering of patients and their families in countless uncosted ways.

Whānau even recover more quickly if their loved ones have died a gentle death, McCafferty says. But for all the Government’s fine talk about social investment, such savings go largely unrecognised.

At places like Tōtara, the potential consequences are severe. “I can’t, hand on heart, tell our communities we can maintain services,” McCafferty says. “Because we can’t... If we have no uplift [in this year’s funding], we are going to have to reduce services to [people with] a prognosis of three months or less.”

That alone would represent a sharp – and hurtful – curtailing of the hospice’s mission. Even more alarmingly, McCafferty foresees a “domino” effect of service reductions at other hospices and then, if nothing changes, “a series of closures”.

This, she notes, is the exact situation unfolding in Britain, where the hospice sector is battling chronic underfunding. And the pressures on hospices here – which support nearly one-third of all dying New Zealanders – will only rise as the population ages.

The Government’s mean-spirited, Grinch-like approach will, of course, find its defenders among those who argue that the state’s coffers are bare. That, though, is a self-imposed choice.

The Green Party’s alternative Budget, released earlier this week, proposes an annual levy of 2.5% of the wealth held by couples over a threshold of $4m. This would, the party estimates, raise $18 billion for the “common good” services we all need to flourish – of which health is a prime example.

While such a levy would be unlikely to survive coalition negotiations with Labour, even a more modest capital gains tax could raise billions of dollars a year for healthcare and other services.

We have, then, a range of choices, from Greens to Grinches. And surely the latter path is a flagrant breach of our core social beliefs. Is this really what we want to become – a country that denies people even the dignity of dying well?

The Spinoff: Once again, workers pay the price in the fight against inflation

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Inflation, as the economist Geoff Bertram once remarked, is a matter of settling “distributional contests among the great classes of society”. And one way to think about those contests is this: if prices start to rise, who bears the burden of bringing them down again – companies making excess profits, or rank-and-file workers?

Yesterday’s unemployment data, in which the official jobless tally stayed at 5.1% or 156,000 people, is all the answer you need. (The underutilisation rate, which includes people who don’t have enough work, is more than twice as high, at 12.3% or 390,000 people.) If, as some economists predict and any sensible person would hope, these figures represent the peak of the current cycle of unemployment, they will be a final reminder of the fact that we dealt with the post-pandemic inflation spike by the simple expedient of putting tens of thousands of people out of work.

Since at least the 1980s and the rise of “inflation targeting”, this has been how it goes. When the economy is deemed to be “overheated”, and inflation rising too sharply, the Reserve Bank hikes the rate at which commercial banks borrow money. Those banks in turn levy higher borrowing charges on firms, which duly cut back investment, and large numbers of people lose their jobs. All this reduces the amount of money available to be spent on goods and services, and so inflation falls.

Various problems with this approach have been evident in the latest bout of inflation-related combat. One is that it has proceeded on the assumption that the major force “overheating” the economy was a Labour government spending too much money through the pandemic, just as other governments had supposedly overspent worldwide.

Inconveniently for those making this argument, there is a fair bit of evidence to the contrary. When the Council of Trade Unions looked into it a couple of years ago, they found that easily the biggest contributor to New Zealand’s inflation spike was not government spending but higher corporate profits. Some careful attempts to tease out this question globally came to the same conclusion. This was the phenomenon characterised by the economist Isabella Weber as “greedflation”: firms taking advantage of an economic shock, and exploiting their own market power, to raise prices faster than their own internal costs were increasing. (This was not an argument universally accepted, of course.)

The other obvious problem with our inflation-combating approach is that it ignores – or is overly sanguine about – the immense personal toll inflicted by job losses. As the University of Auckland economist Robert MacCulloch has shown, unemployment has a much, much larger negative effect on people’s wellbeing than does inflation. (Albeit inflation is directly experienced by a greater number of people.)

Peculiarities of New Zealand politics also mean that job losses have a greater impact here than they might elsewhere. Most countries’ welfare systems incorporate something known as social insurance, in which the shock of unemployment is cushioned by a temporary payment that is more generous than the conventional benefit – typically something like 60-80% of the person’s former salary, paid for six to 12 months.

This reduces the likelihood of catastrophic post-redundancy events such as people having to sell their house to survive. It gives them time to assess their options and potentially retrain. Above all, it prevents them from having to snatch at the first job that comes their way, whether it be a good fit for their skills or not. This is the kind of system that Labour was preparing to introduce before Chris Hipkins put it on the “policy bonfire” in early 2023.

Unable to access such support, or indeed much else by way of job-seeking assistance, unemployed New Zealanders often end up in positions much worse than the ones from which they were let go. A detailed study by Motu found that New Zealanders who lost their jobs were, even five years on, earning one-fifth less than their peers. Even if they found another job, it typically paid 15% less than their old one.

Given that this situation often implies a skills mismatch, in which people are working below the level for which they are qualified and not fully using their capabilities, there is a massive cost not just to the individual but to the wider economy. And that is even without accounting for all the other harms that often accompany unemployment, including lowered self-esteem, greater social isolation and worse health.

The damage that ripples out from this surge in unemployment, in short, will be felt for years to come. Of course the pain is not limited to employees: many small business owners have gone under, as is obvious to anyone observing the closed shopfronts on our country’s main streets.

So far, however, the large companies operating in uncompetitive markets – which are also those most able to raise prices during supply shocks and stoke inflation – have not had to feel much pain. Our supermarket duopoly remains splendidly insulated from the threat of real competition. Our – or rather, Australia’s – banks continue to report colossal profits and post margins far higher than those generated in other countries. Fletcher’s continues its near-total dominance of the markets for key building products. The insurance sector – where price rises have contributed significantly to inflation – remains highly concentrated.

There are rumblings of discontent – even among the current crop of ministers – about some of these arrangements. The supermarkets, for instance, have been threatened with even tougher action than normal. But it remains to be seen if the government will actually follow through. As it stands, then, the depressing thought is that the response to the next inflationary shock is likely to repeat the same mistakes, and that innocent workers – rather than profiteering firms – will pay the price.

The Post: This best-selling book on ‘abundance’ has got it wrong

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A minor coincidence this week: Wednesday, New Zealand’s official “Earth Overshoot Day”, was also the day I finished Ezra Klein and Derek Thompson’s best-selling new book Abundance.

Earth Overshoot Day marks the date at which Kiwis have, per capita, consumed more resources than the planet can regenerate in a year; globally, humankind would need 1.8 Earths to sustain its current patterns of consumption (and this is, if anything, an underestimate).

Such facts sit in curious contrast to the Abundance book, which blithely argues that if we just build more essential infrastructure – renewable energy and inner-city housing, in particular – we will solve all our environmental problems.

Sitting atop the American bestseller charts, Abundance has grabbed attention in part because it bracingly confronts a left-wing doomer mindset that can seem to offer only defeatism and negativity in the face of climate change. Thompson and Klein posit instead an apparently positive vision of untrammelled abundance, available immediately if only we seize the opportunities offered by renewable energy and technological innovation.

One colossal drawback in Klein and Thompson’s argument, though, is that they never seriously contemplate its environmental flaws. Other than demolishing the strawman argument for massive economic retrenchment to protect the climate, they don’t deal with the fact that – for one thing – most construction materials must first be dug out of the ground, often at massive cost to the environment.

Rare-earth-mineral reserves, and even potential wind-turbine sites, have a nasty habit of being co-located with precious wetlands and the last remaining populations of endangered species.

Construction itself is environmentally damaging: concrete production alone generates up to 8% of all global carbon emissions. Klein and Thompson speculate hopefully about “green” concrete, but even if – optimistically – its CO2 emissions could be halved, the overall benefit would of course be wiped out by a doubling in concrete production. (Every two years, China consumes more cement than the US did in a century.)

There are echoes here of the so-called Jevons paradox: advances in energy efficiency get wiped out by people increasing their use of the more-efficient thing. Got a car that does more kilometres per litre of petrol? You drive it further.

Of course people can and should switch to electric vehicles. But although they are a marvellous invention, they will – experts estimate – across their life-cycle remove 70% of a traditional car’s emissions – not 100%.

Globally, three-quarters of energy is still produced from fossil fuels. Just replacing that with renewables will be daunting, let alone keeping up with population growth, and increased expectations of affluence, which could easily require twice as much energy. Do we seriously think that can be done while reducing emissions at sufficient speed?

Climate change, what’s more, is only one dimension of the wider environmental crisis. We are in the midst of the sixth mass extinction of species, and breaching most of the planet’s ecosystem limits.

Klein and Thompson vaguely acknowledge these crises, suggesting that if – for instance – we grew synthetic meat in skyscraper factories, we could re-wild vast areas of farmland. But even if feasible, this will never happen quickly enough to address the biodiversity crisis.

So-called “sustainable” aviation fuels and carbon capture and storage, meanwhile, are fine ideas, but currently unproven – and incapable of delivering the 50% emissions reduction by 2030 that’s needed to avoid climate change’s worst effects.

Although asking people to massively curb their lifestyles is political suicide, a more feasible alternative to abundance may lie in a combination of two unsexier words: sufficiency and efficiency.

Psychologically, going backwards is hard, but it might be easier to accept that – at least in the West, and in America in particular – people on average already consume enough material things. Then, greater efficiency could rapidly deliver genuine reductions in energy use, emissions and planetary impact.

When I lived in the UK, I remember officials estimating that an entire power plant could be retired if every Briton making a cup of tea boiled not a full kettle but only the water they needed.

Here, state agencies estimate that, if we just had the will and the technology to use energy off-peak – charging EVs overnight, for instance – we could build far fewer power plants (and save billions of dollars).

These are, of course, big ifs: even this modest behaviour change has long eluded Western societies. But it is the shift we need.

Klein and Thompson are not entirely wrong: there is a role for optimism, for renewables and housing intensification, and for whatever technology can realistically offer. There is, though, something almost arrogant about the intensity of their belief in abundance.

We need, instead, to rediscover our connection to the earth, to live on it more lightly, to be more content with what we have. That reconnection need not be scourging or self-denying: it can be joyful, as when we find delight in nature.

But it relies on a recognition that not everything is abundant, or can be made so. Some things are just plain scarce.

The Spinoff: A stocktake of all the policies rolling back workers’ rights in New Zealand

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Frogs, it turns out, do notice when they’re being boiled. For years the favourite metaphor for people’s insensibility to slow change has been the amphibian that, as the temperature increases imperceptibly, fails to clock that it’s being cooked. Recent research, however, has shown that frogs do in fact jump out of an increasingly hot pot.

So a new metaphor will be needed for what this government is doing to workers’ rights, as it deploys a strategy that is unmistakably based on incremental attacks. Eschewing a full-blown confrontation with labour, the government is subtly chipping away at pay, conditions and many of the other things that make work life-giving. And because no one policy in isolation is world-changing, few people have understood the full extent of the rollback. Here, then, is the long list of the coalition’s anti-worker policies, whether already implemented or in the works.

Implementing real-terms minimum wage cuts

Last year, the minimum wage went up 2% when inflation was 4%. This year, it increased 1.5% when inflation was 2.5%. Minimum-wage workers’ pay packets, in short, buy significantly less than they did in 2023, something economists call a real-terms (that is, inflation-adjusted) pay cut. The Council of Trade Unions calculates that a full-time minimum wage worker is cumulatively $2,438 worse off (again, in real terms). 

Removing the living wage in government

Finance minister Nicola Willis wants to remove the requirement that government contractors have to pay the living wage. This is likely to mean that, over time, parliament’s cleaners, caterers and security guards drop from the living wage ($28.95 an hour) to the minimum wage ($23.50), a pay cut of nearly one-fifth.

Repealing Fair Pay Agreements

One of the government’s first moves was to repeal the Fair Pay Agreements Act 2022, which would have established industry minimum standards across low-paid industries. This would particularly have helped workers just above the minimum wage, who don’t directly benefit from its increases and who have seen pitifully small salary rises in recent decades.

Extending 90-day trials

Under Labour, only small employers could impose 90-day trials, which allow them to dismiss an employee for no reason within their first three months of work. The government has allowed employers of all sizes to impose the trials, despite detailed research showing they do not increase hiring, even though they do cause terrible instability for new staff.

Removing union protections for new workers

The government wants to remove the rule that for the first month in a new job, an employee’s pay and conditions must be as good as those in their workplace’s collective agreement (where one exists). This rule gives new staff time to settle, a taste of the terms and conditions negotiated by the union, and protection against being pushed into an inferior individual agreement on day one. Removing this protection will also make it easier to impose 90-day trials on new staff (as above). 

Reducing workers’ redress

Even when employees win personal grievance cases, they will no longer be able to get reinstated, or be compensated for hurt and humiliation, if they have “contributed to the issue” in any way – no matter how minor. This, unionists argue, will encourage employers to “go on fishing expeditions, trawling for any tiny errors a worker has made in their job or their application for justice”. 

Enabling questionable payouts

A select committee is considering an Act Party member’s bill that would let employers offer employees cash in return for the latter agreeing that their employment is terminated. The offers could be made even when there is no evidence of an employment relationship problem, but where – in the bill’s vague stipulation – “the demands of the business mean that it is imperative to dismiss the employee”. The offers would be “off the record”, meaning that if bullying behaviour occurred during negotiations, the employee could not cite it in a future personal grievance. Staff often feel vulnerable, moreover, and experience fear and stigma about being fired. In practice, then, employers would feel emboldened to “giv[e] the employee an ultimatum – accept what is being offered or be fired”, says employment lawyer Susan Hornsby-Geluk. The bill “would create an unbridled ability for an employer to present an employee with a fait accompli, under the cloak of ‘legal privilege’”, she argues. “This is likely to result in unjust outcomes for the most vulnerable.”

Limiting unjustified dismissal claims

The government plans to prevent employees earning over $180,000 from raising an unjustified dismissal claim. Cry me a river, some might say – but why should, for instance, a senior manager on $181,000 not be able to take a claim if they have been sacked for no reason? There are also many reasons to think the change will be “gamed”.

Limiting contractors’ rights

The government plans to prevent employees incorrectly classified as contractors from contesting that status in court. New Zealand courts have repeatedly found in favour of four Uber drivers who argue that, whatever their written agreement says, they are effectively employed by the ridesharing firm and should have all the protections of employees. The government wants to remove these workers’ ability to pursue their rights in court, arguing that if they have signed an agreement saying they are contractors, that’s all that matters. This flies in the face of standard New Zealand legal practice, which rightly allows the courts to effectively set aside written agreements if the actual working relationship is otherwise (and thus protect employees from the consequences of being bullied into signing something inaccurate).

Cutting public sector jobs

While the final scale of the government’s public-sector job cuts is not yet known, it is clearly in the thousands. Staff could have been redeployed to new priorities, or asked to carefully find efficiencies. Instead a hasty and blunt process has seen thousands of often highly skilled workers made redundant.

Disestablishing the pay equity taskforce

The government has disestablished the six-person pay equity taskforce, arguing – in essence – that public bodies have got so good at settling pay equity claims that they no longer need centralised support. This argument got short shrift from people like Nurses Organisation chief executive Paul Goulter, who said the move represented “a huge loss” of knowledge and skills that were “of huge benefit to both employers and the unions representing their employees in sorting pay equity issues”.

Watering down health and safety

The health and safety minister, Brooke van Velden, has announced that small businesses won’t have to manage things like psychosocial or ergonomic risk. But mental health and musculoskeletal disorders are the two main causes of workplace harm, and smaller firms have higher rates of injuries than larger ones. Meanwhile van Velden has talked vaguely of a “first principles” review of the 2015 Health and Safety at Work Act, despite everyone from Business New Zealand on down pointing out that this would be a bad idea.

Implementing pay reductions for partial strikes  

The government has introduced a bill that would allow employers to reduce workers’ pay by at least 10% when they carry out “partial” strikes, such as refusing to perform all their duties. Hornsby-Geluk argues that this “does not seem unreasonable”, but unionists believe that, given most employees have very limited ability to win better terms and conditions, partial strikes are a valid form of action and should not be penalised.

The Post: The challenge Trump’s tariffs pose for the progressive left

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The list of victims of Donald Trump’s incipient trade war grows with every passing second.

Global prosperity, the Chinese economy, American consumers, even the approval ratings of the man himself: all have been hit. Trump’s popularity is tanking, his billionaire backers are revolting (in the active as well as passive sense), and young voters seeking economic stability are fleeing him in droves.

Such chaos understandably elicits schadenfreude among the Donald’s opponents. But this trade war also has the potential to harm the progressive cause – by succeeding, or, to an even greater extent, by failing.

To unfold this apparent paradox, one has to understand the modern American Right, where the political energy has long since shifted away from a purely “neoliberal” – that is, market-led – approach. It embraces instead pro-statist positions that sound weirdly left-wing. State action to protect local manufacturing, and domestic production more generally, is in; untrammelled free trade is out.

What’s driving this shift? Thinking along similar lines to Trump, albeit with slightly more sophistication, American conservatives have clocked the decimation of local communities as steady, high-paying manufacturing jobs have gone offshore, to countries like China with vastly lower labour costs (and, indeed, rampant modern slavery).

Such is their newly rediscovered love of 1950s-style community that some conservatives have even come to embrace trade unions, a key post-WWII force for limiting working hours and – consequently – freeing up time for communal life.

The prospect of more pandemics, and greater armed conflict, has also led conservatives to question whether America should rely so much on foreigners for vital supply chains, and whether – therefore – the nation wouldn’t be more secure making those things at home.

In another world, then, the Trump tariffs, by hammering foreign firms and encouraging manufacturers to shift Stateside, could strengthen both national security and local communities, cementing his appeal among voters abandoned by the left.

But this is not the world that Trump is creating, as economists have been explaining ad nauseam. Because the tariffs change with the president’s passing moods, no sensible foreign firm will invest the billions of dollars needed to relocate production to Pennsylvania or Vermont. No-one builds on shifting sands. Nor would American consumers enjoy the resulting sticker shock: an iPhone built in Chicago might cost twice as much as one built in Shenzhen.

It could, in fact, be the failure of Trump’s trade war that harms the left. Not in an immediate sense: currently the tariffs are a gift to the Democrats. The damage, rather, could be to a recently re-energised intellectual cause among progressives: industrial policy.

In the last decade or so, global thinkers have challenged the 1980s orthodoxy that governments mustn’t attempt to meaningfully shape their economies. Attempting to do so, market fundamentalists have long argued, would simply result in a disastrous attempt to “pick winners”, wasting resources and leaving countries poorer.

But, in an important 2023 paper, “The new economics of industrial policy”, the brilliant Harvard economist Dani Rodrik and his co-authors show just how much the tide has turned on that worldview. The debate about the “East Asian” miracle has been settled, they argue: recent research confirms the view that the astonishing post-WWII acceleration of the Taiwanese, South Korean and other economies was driven by activist governments.

As influential economists like Mariana Mazzucato have argued, well-functioning national governments, with their long time horizons and mandate to pursue the public good, can sometimes see or exploit opportunities that individual firms cannot. Mazzucato has shown, for instance, that the iPhone’s 12 key technologies – lithium-ion batteries, touchscreens, GPS and so on – were all developed or funded by blue-skies public-sector researchers.

National “missions” – America’s drive to put a man on the moon, or Germany’s 1990s push for renewable energy – can also mobilise public and private investment behind new technologies, driving innovation and job growth.

As Rodrik’s paper points out, innovation often depends on clustering – cutting-edge firms locating themselves close to each other – which governments can encourage in various ways. Economies can also get caught in a situation where, for instance, a potential exporting opportunity requires a particular piece of local infrastructure, but no firm will provide either element without the certainty that the other will also be provided.

Governments, Rodrik and co argue, can step in to provide that certainty, pushing the economy onto “a superior equilibrium”. Tariffs can even have their place as a strictly temporary measure, sheltering infant industries until they are ready to complete globally.

Doing industrial policy well is, of course, supremely difficult, requiring thoughtful strategy, total transparency about government-business linkages, and disciplined leadership. But this is not – to state the blindingly obvious – the way that Trump does things.

His erratic, vengeance-based approach to trade and economic development will, in precisely the way that conservative economists predicted, create all manner of problems. And, along the way, tarnish the reputation of a policy that should have much to offer progressives – and indeed the world.

The Spinoff: Is political trust ‘in crisis’? It depends

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A few years ago, trust in New Zealand’s government was higher than at any other time in the last 35 years. Why, then, do we hear so much about a “crisis” of political trust? Obviously, trust matters: it is the glue that holds society together. Communities become dysfunctional when people cannot, as a rule, rely on their neighbours to behave predictably. Business transactions become near impossible without a basic assurance that others will follow ethical norms. And a populace can become ungovernable if it no longer trusts those doing the governing. This is not to say that full trust is desirable: surveys showing 100% confidence in government are a mark of authoritarian, dissent-suppressing dictatorships. Some measure of distrust is healthy. But very low trust is corrosive.

To see what that looks like, cast your eyes over the calamitous decline in the number of Americans who trust their government, now numbering just 20%. No wonder so many Americans are willing to back Trump.

New Zealand’s situation, however, is very different. In a master’s thesis published in February, Victoria University student Oliver Winter compiled data from surveys dating back to the early 1990s. What they show is a long-term increase in trust.

Note: the surveys graphed here are the World Values Survey (WVS), International Social Survey Programme (ISSP), New Zealand Election Study (NZES) and the Institute for Governance and Policy Studies (IGPS) trust survey

By 1999, New Zealanders were – as other surveys at the time make clear – reacting to 15 years of often undemocratic change carried out by governments intimately entwined with big business interests. But the introduction of MMP, and Helen Clark’s ability to hold corporate interests at a greater distance, helped restore some measure of confidence.

A slight decline in trust may have occurred under John Key, before trust spiked – as it did in many other countries – during the early days of the pandemic. The equivalent charts for parliament and the courts – equally important political institutions – show a similar, indeed slightly more positive, long-term trend.

This story comes, however, with two big caveats. The first is that the rise has been from a low base. The second and more serious caveat concerns the last few years: a return to pre-pandemic levels of (dis)trust can be seen even by 2023, and the data since then has only worsened.

The Edelman Trust Barometer survey, carried out late last year, shows a continued decline in trust. Relatively little weight should be placed on New Zealand’s underperformance versus the rest of the world, as Edelman surveys just 28 countries with wildly varying political setups.

More worrying is the fact that, as indicated by the circled numbers at the base of the blue bars, trust has continued to fall in all major institutions, and in the case of government is now below 50%. The slight downward trend detected in Winter’s work appears to have accelerated.

What is going on? Scholars in this area distinguish between weather and climate: changes in trust can be short term, transient responses to current events, or they can represent a shift to a permanently different environment.

It is plausible that New Zealand’s current decline in trust is just a form of weather. Evidence for this argument would include the lingering effects of the pandemic (which may well fade with time), the cost-of-living crisis (already easing, though certainly not over), and the confidence-sapping decline in the performance of our education and health systems (serious but eminently solvable problems).

Much angst has also been created by successive governments’ failure to fix apparently intractable economic problems, including crumbling infrastructure, rampant house price inflation and unchecked oligopolies. But current moves – including tentative steps towards bipartisan infrastructure investment, rezoning of large swathes of land for housing densification, and threats to break up the supermarket duopoly – hold out the promise of these problems being addressed.

We would not want, however, to put too much faith in such arguments. Distrust is not driven solely, or even mainly, by governments’ failure to deliver. Research suggests it is greatly amplified by economic disparities, which rightly lead the poor to believe that the rich have everything locked up, and people’s sense of not being heard by decision-makers. This entwining of poverty and political exclusion can be corrosive.

In a 2022 OECD survey, trust in parliament was 60% among financially secure New Zealanders, but only 40% for people struggling to pay their bills. Relatedly, just 35% of the poorest New Zealanders felt they “have a say” in political decisions. Across the whole country, barely one-third of us believed that if we took part in consultations, state agencies would listen. 

So what would ensure the weather of distrust doesn’t become a climate of toxic disaffection? As a recent OECD report put it: “People need to feel trusted by the government in order to trust it.” The same report produced evidence that the most trust-enhancing reforms are those that ensure citizens’ voices “will be heard”.

That requires us to tackle the corrosive intersection between poverty and political exclusion: lifting living standards for the worst-off, clamping down on the channels (notably lobbying and political donations) that allow vested interests to convert money into power, and – above all – doing government differently. We need to bring politics closer to the people, giving citizens greater opportunities to be meaningfully engaged in shaping political decisions.

That could be as simple as doing consultation better – early enough that people’s input can shape the final result rather than being a tick-box exercise, and with officials going to the venues – shopping malls, sports clubs and so on – where people already are, rather than expecting people to come to them. It could also involve things like citizens’ assemblies, where representative groups of ordinary people are brought together to debate and find solutions to issues on which conventional politics has become logjammed, or participatory budgeting, in which local councils put up a proportion of their infrastructure budget for the community to discuss and allocate.

Either way, there is no need yet to panic about trust. We start from a much higher basis than many other democracies. We do not yet have hard evidence that we are in a permanently new climate of distrust rather than just a localised depression, to use the meteorological term. As the economist Shamubeel Eaqub has said in a recent report on social cohesion, we are “fracturing, not polarised”. But that still points to a country heading in the wrong direction, even if not yet arrived in the darkest place. We cannot be complacent.