Stuff: Sound intentions, poor explanation — Why Labour needs to regroup on hate speech reforms

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When John Milton penned his seminal 1644​ defence of free speech, Areopagitica​, he asked: “Who ever knew Truth put to the worse, in a free and open encounter?” Vigorous debate, though, must not lead to “tolerated Popery”. No free speech for Catholics, then!

Milton’s inconsistencies prefigure the fraught nature of free speech reform, something the Government has just experienced since the publication of its proposals last week.

Already the debate is frenzied, and basic facts are being lost. Free speech is essential, but has never been absolute, though its benefits do now extend to Catholics. (Thank God, you might say.) It is often curbed to prevent harm: hence why we can’t make or share child pornography, or defame people.

We have also lived for more than 40 years with the Human Rights Act and its predecessors, which in one sense have set the bar lower than the Government’s proposed reforms. Since 1977, it has been an offence to say anything “likely to excite hostility or ill-will against, or bring into contempt or ridicule” groups based on their “colour, race, or ethnic or national origins”. Only one prosecution has ever been taken.

The Government’s proposal is to simultaneously narrow the kinds of speech that are targeted – only those that incite “hatred” – but extend the law’s protections to other groups, including those based on gender, religion, marital status, sexuality, disability, employment status and age.

The intentions here are sound. Hate speech can lead directly to harm, as when violence is urged. But it can also create an atmosphere which is itself threatening. As the Islamic Women’s Council spokesperson Anjum Rahman said recently, “We know that hate speech can turn into hateful actions.”

Legal philosopher Jeremy Waldron likens the public sphere of democracy to the physical public sphere of streets, plazas and libraries. Every group of people has the right to go into the public sphere and know it will be safe.

Every group has the right to participate without fear, and as an equal, in our democracy, secure in the knowledge it has “the same liberties, protections, and powers that everyone else has”. Speech that stirs up hatred – white supremacist posts, for instance – can destroy that assurance, creating fear and making people feel like lesser citizens.

So the Government is right to act. But the problems are already multiplying. Critics have seized on the fact that “insulting” speech would be caught by the proposed law.

This is slightly misleading, because speech would have to be not just insulting but also intended to incite hatred. Given the ordinary meaning of the word, though, and the frequency with which people insult each other in daily life, it may need to be dropped, if only to avoid scaremongering.

There are, moreover, real dangers in an overly wide wording. Critics have argued that the new law will invite a slew of bad-faith reporting to police as people seek to have their political adversaries convicted or at least intimidated.

Again, such logic can go too far: all laws can lead to vexatious complaints. But the critics are right that, even if false claims would ultimately be rebuffed, that is not a sufficient defence. Just being investigated or talked to by the police, let alone going through a court process, can be traumatic or have a chilling effect. The law must be worded as tightly as possible to minimise such threats.

It is also worrying that ministers appear unable to say what would or would not count as hate speech. Of course the courts will ultimately decide that, but only within a range of possible interpretations, and we need to know what the Government thinks that range is.

Equally, it is questionable whether we should, as the Government proposes, seek to protect such a vast range of groups, including those based on “political opinion”, a move that could threaten open political debate. Jacinda Ardern also needs to be clear that the law targets more than just direct calls to violence.

The debate has begun poorly, not helped by multiple bad-faith attacks, and the Government must regroup. Ministers would do well to convene something like a Te Tiriti-based citizens’ assembly, in which a perfectly representative group of ordinary people could discuss the issue deeply, hear from those affected by hate speech, and make recommendations that reflect the wider public’s considered view.

Most of all, the Government needs to be clearer about its intentions. The core problem, of course, is that hatred is difficult to define, and any law risks being either so broad as to be dangerous, or so narrow as to be unusable. But we cannot avoid striking a balance: there is already one in law, and I believe we can strike one still better, preserving the essence of free speech while protecting our most vulnerable groups from real harm.

Stuff: Worst-case scenario disastrous if proposed new education standards go ahead

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If you’re worried about our kids being sorted into winners and losers, you might want to take a close look at what the Ministry of Education is cooking up.

It has spent the last couple of years quietly working on compulsory literacy and numeracy standards – which sounds innocuous enough, until you realise it’s creating a test that four in 10 pupils might fail. And that, in turn, could derail the progress of more than 20,000 children a year, re-creating the strong pass-fail, winner-loser dynamic that NCEA was supposed to end.

The problem the ministry is trying to solve is real: government research suggests that up to four in 10 pupils are getting to NCEA level 2 – age 16, loosely speaking – not properly literate or numerate. And, superficially, the problem is NCEA. Rather than test those skills directly, it assumes that pupils will pick them up along the way, if they complete enough unit standards that apparently require strong reading, writing and maths. Unfortunately, and obviously, kids are finding ways around that.

This can’t continue. But is the answer really to introduce by 2023 a set of compulsory literacy and numeracy unit standards, without which students can’t get their NCEA qualification? Yes, they’ll be allowed multiple attempts to pass. But when I asked the ministry, it couldn’t or wouldn’t tell me how long this could delay children’s progress – and how many would fail altogether.

Since there are 280,000 secondary school pupils, 56,000 in each year on average, we are left to assume that up to 40 per cent of them – some 22,000 children – could, in the worst-case scenario, fail the standards each year and leave school with no NCEA qualification. That sounds disastrous.

No-one thinks literacy and numeracy are unimportant. But the rationale for the current system is that the old pass-fail exams – School Certificate and Bursary – were fine for high achievers but damaging for many. I remember the kids at my school who had to repeat seventh form. It was an awful situation. NCEA, in contrast, allows pupils to build up a qualification piece by piece, maximising the return on their scholastic efforts.

Not only do the compulsory standards risk reintroducing a strong pass-fail dynamic, they could badly narrow the curriculum and encourage teaching to the test, just as the failed National Standards did. Low-decile primary schools, if pressed to anticipate the test, might suffer the most, widening inequalities in schools’ ability to give kids a broad, holistic education.

Peter O’Connor, a professor of education at Auckland University, told me it was “absolutely bizarre” to abolish National Standards but then create a high-stakes test that could be even more harmful. He called the proposal “a madness, a retreat to the past … the most retrograde step in education in over a generation”. Another education expert, who wished to remain anonymous, was less trenchant but said they still feared “big casualties”.

The ministry doesn’t even know who will be most affected, but it will probably be Māori and Pasifika. A report last year showed that practices like streaming already hurt rangatahi Māori. Surely we shouldn’t be adding to this burden.

The problem, in any case, starts well before NCEA. Toddlers whose parents don’t read to them will hear hundreds of thousands of words fewer than those whose parents do. Maths gaps are obvious at primary school. Roughly 60 per cent of the variation in children’s achievement is down to socio-economic factors.

Now, we can’t change all those things overnight. But we could immediately pour resources into reading recovery and maths support programmes that have been proven to work. We could give low-decile schools extra resources and ensure smaller class sizes to allow more tailored teaching. We could narrow the list of unit standards that allow students to indirectly demonstrate literacy and numeracy, and strengthen their rigour.

We could, in short, focus on supporting children to improve, and think about compulsory tests much further down the track and only as a last resort, if the supportive approach completely fails. As it is, the ministry is ploughing ahead with the planned tests, and has set aside just $10 million, spread over four years, to help students through the changes – a derisory amount.

Whatever happens, the plans deserve a proper national debate. The ministry ran a consultation last year, but the plans have, bar one RNZ article, received almost no public scrutiny. Yet they represent a potentially seismic change.

The ministry is piloting the standards this year and next, with a view to introducing them in 2023 “as long as the sector is ready”, though it couldn’t tell me what that actually means. So there’s time to stop, or at least amend, the plan, and ensure we don’t take a step that is the wrong answer to an admittedly serious problem, and in so doing profoundly damage the prospects of so many young people.

Guardian: Public opinion supports action on inequality. Jacinda Ardern has no more excuses

Written with Peter Skilling. Read the original article in The Guardian

Jacinda Ardern can take heart: in the last decade, public attitudes have swung sharply against New Zealand’s persistently high levels of economic inequality. Space has opened up for her to pursue the egalitarian agenda she cherishes – although, conversely, her excuses for not acting have sharply diminished.

Public opinion surveys from the two decades after 1990 showed a consistent trend: decreasing concern over economic inequality, and decreasing support for government action to tackle it, especially through taxes. The pro-market ideas of New Zealand’s 1980s reforms seemed invulnerable.

But new data from last year’s International Social Survey Programme (ISSP) shows a marked shift.

Between 1992 and 2009, the belief that income differences are “too large” fell from 73% to 63%, but by 2020, it had rebounded to its 1992 level. Similarly, the proportion of people who believed government has “a responsibility” to do something about those differences fell from 53% in 1992 to 41% in 2009, but was back up to 51% by 2020. While we don’t know exactly why this shift has happened, we can make some educated guesses.

Inequalities are often sustained by a belief that our different outcomes in life are largely due to our different abilities, effort and contribution. From 1992 to 2009, New Zealanders increasingly believed that getting ahead in life was due to individual effort and hard work, seldom attributing it to the good luck of their upbringing or social connections.

The 2020 survey reverses those trends: while most people still believe that our outcomes reflect our individual merit, fewer people attribute getting ahead in life to hard work. Between 2009 and 2020, there were large increases in the proportion of people saying that your chance of getting ahead in life are importantly related to coming from a wealthy family (from 9% to 17%) or knowing the right people (29% to 41%).

The belief that there are fundamental conflicts between different social groups has also rebounded.

From 1992 to 2009, support fell precipitously for the claim that there is conflict between rich and poor people or between management and workers. But between 2009 and 2020, an increased number of New Zealanders perceived conflicts between rich and poor (from 33% to 37%), the working class and the middle class (11% to 19%), management and workers (34% to 42%), and young people and old people (23% to 33%).

In line with these trends, egalitarian policies are increasingly popular. Support for progressive taxation, under which those on higher incomes pay a higher rate of tax than those on lower incomes, fell significantly from 1992 to 2009, from 72% to 54%, but climbed again, to 68%, in 2020.

Why, though, have attitudes shifted in this way, when income inequality itself is not much changed from its early-2000s level?

For one thing, the effects of inequality are cumulative – and often delayed. In New Zealand, inequality rose more rapidly between the mid-1980s and the early 2000s than in any other developed country. The richest 10% went from earning 6 times as much as the poorest 10% to earning 9-10 times as much.

Such economic inequality can create multiple harms. By denying the poor the income they need to thrive, it can entrench poverty, worsen health and social problems, and lead to wasted talent. And by pushing rich and poor further apart, it can diminish trust, empathy and social cohesion. Even if the level of inequality does not increase, it exacerbates these problems every day it is allowed to persist. Metaphorically, it is like dumping toxic waste in a stream: the waste continues to leach out and damage the environment over time, even if the volume of waste stays the same. These effects can accumulate, but only become obvious with time.

Political decisions themselves can affect attitudes. The previous National-led government’s anti-egalitarian policies – cutting taxes for the highest earners and reducing union powers, for instance – may have heightened existing concern. In the mid-2010s, pollsters UMR found the vast majority of New Zealanders increasingly anxious about inequality. This will have been amplified by the recent prominence of inequality in global debates: just think Occupy Wall Street, the campaigns to get tech giants like Google to pay more tax, or the way Jeff Bezos’s Amazon fortune swelled during the pandemic even as hundreds of thousands of people lost their jobs and faced unsafe conditions.

All this is highly relevant to a New Zealand Labour government that has often ruled out egalitarian policies – notably a capital gains tax and sweeping benefit increases – on the grounds that they lack public support. Of course, concern about economic inequality may not translate into an endorsement of specific policies. The ISSP data shows that support for government action against inequality, although increasing, remains lower than concern about inequality itself, suggesting that not everyone sees government action as the best solution. Other research suggests that the middle classes are reluctant to address poverty if they perceive they will be burdened more than they will benefit.

These are all reservations, though, that can be at least partly addressed by politicians, especially those with the communication skills that Ardern possesses. What is now abundantly clear is that the New Zealand public is no longer operating on the assumptions of the 1980s. The ground of public opinion has been cleared for action against the country’s persistently high levels of economic inequality.

Stuff: Middle class parents, your kids will be fine at a lower-decile school

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It’s that time of the year when parents start putting their children’s name down for high school – and for all the middle-class mothers and fathers fretting over where their offspring end up, I have a simple message: relax, it’ll be fine.

Of course parents want the best for their children, and worry about the quality of their schooling.

But that can’t be the only thing that’s in play, because one of the most profound trends of the last few decades is white flight: the growing tendency for middle-class Pākehā parents to shun low-decile schools, even if they’re just down the road, and try instead to get their children into higher-decile establishments.

This shift can’t easily be justified on quality grounds, because, as the New Zealand Initiative think-tank found in a 2019 report, Tomorrow’s School, “there are no significant differences in school performance between schools of different deciles”.

If richer schools get better grades, it’s because they have richer students. So middle-class parents can send their kids to the local low-decile school knowing that the teaching will likely be as good there as anywhere else.

Easy for me to say, perhaps, because I’m not the one making that decision. But I went to precisely the kind of school that makes middle-class parents nervous: Petone College, a decile 3 high school in Lower Hutt with a majority Māori and Pasifika intake.

It was an unusual choice for a child from wealthy Eastbourne, and the pupils at my decile 10 primary school were quick to make that clear. I was going to a school “for cabbages”, I was warned, and the “Polynesian kids” would sell me drugs, or beat me up, or possibly both.

Since 12-year-olds have few original thoughts, these children were presumably just channelling their parents’ prejudices.

Either way, they were wrong. No-one beat me up, nor even tried to sell me drugs. My Bursary marks were more than good enough to get me into university. And I gained something just as valuable as university entrance: I learned a little about lives very different to mine.

I don’t mean that I suddenly “knew” what it was to be poor; you can’t know, really, unless you live it.

But my eyes were opened. I saw the toll taken on my peers by poverty, discrimination, dysfunctional families and the feeling that no brighter future awaited them.

I heard kids say it was going to be “great” to turn 16 and go on the dole, and rather than being enraged – as an outsider to the school might have been – I could see the hurt behind the statement, the desire to save face.

On the lighter side, I also learned something about a wide array of cultures – different foods, forms of art, ways of speaking, senses of humour – that I’d have missed at a more monocultural school.

All this made me a better-informed adult, a citizen better able to grasp what goes on in this country.

And in retrospect, I was always going to be fine academically, in part because well-off kids come with so many advantages. Children actually spend very little time at school: something like 900 hours a year, out of a possible 6000 waking hours.

In every one of those waking hours, well-off children are, for the most part, blessed by having less stressful home lives, quieter places to study, and parents who have the time, energy and confidence to readily help with homework.

Most education researchers, unsurprisingly, would say that a family’s background – its social and economic status – accounts for around two-thirds of the variation in kids’ marks, with schools determining as little as one-fifth.

Middle-class school choices clearly aren’t just about quality. Prejudice, alas, is real. On a Stuff story about white flight some years back, one parent anonymously commented, “Fair enough. I’m not putting my kids where they’re going to be spending all day with loser kids.”

The billionaire Bob Jones, who may unfortunately not be alone in his views, decries low-decile schools as “filled with low-decile people”.

Of course schools vary in their orientation and character, and so do kids. You want the two to match up. I get that. Still, it’s hard not to notice that the “loser kid” schools have a predominantly poor, Māori and Pasifika intake.

So I would urge all the middle-class parents shunning their local school to look deep into their hearts, and ask themselves whether it’s really about quality and character, or whether something less pleasant lies beneath.

And, above all, I’d ask them to remember that low-decile schools generally provide a good education, and that if they send their kids there, they will almost certainly be fine. I went to one of those schools, and I was fine. If you send young George there, he’ll be fine. Little Isla? She’ll be fine, too. I was fine. They’ll be fine. Everything will be fine.

Guardian: Jacinda Ardern’s budget made progress on poverty, but it’s not mission accomplished

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Today, we close a chapter on our past.” So said New Zealand prime minister, Jacinda Ardern, on Thursday, as she launched a budget that included the largest increases to benefits since the 1940s. But although she should be congratulated for finally taking concrete steps to attack poverty and inequality, there is a real danger of celebrating too soon.

Child poverty is one of our much-lauded prime minister’s signature issues, and she has committed herself to ambitious targets that require hardship rates to be cut by as much as two-thirds by 2028. If achieved, this would be an exceptional feat, a rapid reduction that would place New Zealand among the world’s best performers.

But in her first term, Ardern’s only major move against child poverty was her $5.5bn Families Package, which increased tax-credit payments to households with children. This helped reduce the number of children in poverty by about 20,000-40,000.

It was a good start, and the government looked on track to meet its short-term 2021 targets. But the economic impact of coronavirus, combined with the need to help families in progressively deeper levels of poverty, meant far more would be needed in future. And it didn’t look like the prime minister’s cautious, softly-softly approach was going to get us there.

Thursday’s budget, though, set down a marker. Its headline move was an increase in benefits of between $32 and $55 a week, which is projected to lift a further 20,000-30,000 children out of poverty. This will include significant reductions in hardship for New Zealand’s indigenous Māori population and Pacific peoples, both overrepresented in the poverty statistics.

Does this put the government on track to meet its extremely ambitious targets? Not quite. And one of the budget’s central – but little-recognised – insights is that Ardern faces a nasty conundrum about how to handle the disparity between poor households and middle New Zealanders.

One of the key child poverty measures looks at how many families have been lifted over an income level that was fixed in 2018. This measures what’s known as absolute poverty: do poor families have more money than they had in the past? And indeed they do. The government is on track to meet its targets here.

One of the other key measures, though, looks at how many households have less than half the current income of the typical (median) family. This measures relative poverty, the extent to which poorer families are – or are not – keeping pace with mainstream New Zealanders.

While all the poverty measures are important, for me this matters most, because poverty is so inherently relative. Of course, people need basics like a roof over their head and food on the table. But poverty is also about not having the things that other people have: feeling like you cannot afford to be part of mainstream life, not feeling included in society, not feeling able to – for instance – let your kids attend birthday parties because you can’t afford presents for their friends.

On this measure, the government is not doing well. It has made some progress but will almost certainly miss its 2021 target, and is nowhere near being on track for 2028. In a sense, it’s a victim of its own success. It has ensured that middle incomes have increased reasonably rapidly, and cushioned the pandemic’s impact on them. This in turn increases the level which the worst-off families need to reach if they are to be deemed no longer poor.

There is only one way out of this conundrum, and that is to raise the bottom more rapidly than the middle. The government needs to tackle not just poverty but inequality. That is difficult politically, because many New Zealanders feel as if they are the “squeezed middle”, those most deserving of support, and are highly sensitive to the idea that those below them are getting more help than they are.

Ardern also faces a wider challenge. While she may have undone the widely-despised 1991 benefit cuts, poverty rates remain much higher than they were before the 1980s reforms. We also have a housing crisis, with catastrophically high rents, unlike anything faced in the 1990s.

On Thursday, I challenged social development minister Carmel Sepuloni on her boss’s claim that we could “close a chapter” on the past. “I think the prime minister would be the first to put up her hand and recognise that there’s a lot more work to do, and that we face challenges now that we didn’t face in the 1980s,” Sepuloni responded.

But, she added, the benefit boosts, plus moves to tie future increases to wage rises, were slowly shifting the dial. “When you add them all up, they do demonstrate significant traction in the welfare space.”

Bureaucratese aside, that’s a reasonable response – but one which still highlights the scale of the problem. Real progress is finally being made. But mission accomplished? Not yet.

Stuff: Budget 2021 — Labour’s years of caution are finally paying off

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Vindicated. That’s how Jacinda Ardern, Grant Robertson and colleagues will feel about the overarching strategy they’ve pursued in government, after the political triumph of yesterday’s Budget.

Their approach can be encapsulated in the phrase “radical incrementalism”, which another key government lieutenant, Education Minister Chris Hipkins, used in an interview with me some years back. The idea is to have a radical destination in mind, but get there with small steps, slowly warming up the country to the prospect of change.

I’ve always been sceptical about the approach, not least because, in the short term, radical incrementalism is indistinguishable from any other kind of incrementalism, and ministers didn’t seem to have a clear path towards a radical goal.

Some – though certainly not all – of that changed yesterday. Take the welfare reforms. Increasing core benefit rates by $32 to $55 a week won’t, by itself, radically improve the lives of beneficiaries, especially as a small amount of their other entitlements will be clawed back.

But they are the biggest benefit increases since the 1940s, the Ministry of Social Development says.

And all the Government’s changes since 2017 have lifted the basic unemployment benefit by $86 a week, or 38 per cent, according to Budget documents. In pure dollar terms, and adjusted for inflation, this undoes the infamous cuts in Ruth Richardson’s 1991 Mother of All Budgets, so long a figure of hate for the Left.

Even before this Budget, in fact, Labour probably had – at least in a narrow sense – reversed the cuts. But they didn’t shout it from the rooftops, lest the middle classes feel like the poor were getting more help than they themselves were. So Jacinda Ardern became the beneficiary’s secret friend, lifting incomes – but only incrementally.

Not that it’s radical stuff yet. The core weekly unemployment benefit may now be $315, but it’s still well short of, say, the Super rate of $435. If Ardern really wants to restore beneficiaries their “dignity”, as she said in her pre-Budget briefing, she has a lot more to do.

Even though core benefits are now just above their 1991 rates in pure dollar (inflation-adjusted) terms, the fact remains that wages have increased significantly since then. So beneficiaries will still be further adrift of wage-earners than previously, further excluded from mainstream life.

The housing crisis has sent rents soaring in recent decades, and power prices have risen alarmingly, so there’s a lot of “damage” left to undo, despite what the finance minister says. And the Budget was silent on some potentially transformative welfare changes, such as removing intrusive questions about beneficiaries’ relationships.

But Ardern has finally launched a long-overdue review of Working for Families. I can imagine her delivering on it, too, because if she can manage politically difficult benefit increases, she can manage the politically much easier task of increasing payments to low and middle-income working families.

And if the review takes a year to 18 months, the Government might be in a position to announce increases in a 2023 Budget that would – just coincidentally – be a few months out from the next election.

It all speaks to clever political management – as does the increase in benefits itself, coming as it does at a time when the public mood, according to opinion polling, has finally swung in favour of such moves, perhaps because of the shared pain of the pandemic. And those still opposed may have forgotten the increases by 2023.

The pledge to establish a social insurance scheme, providing higher temporary benefits for those who have just lost their jobs, is also clever politics, as it could – if done right – help shore up support for the welfare state among the “squeezed middle”.

Problems still abound, of course. A few weeks ago, I used this column to attack the Government’s efforts on child poverty, and while the Budget brings them closer to the right path, they are still not meeting all their key targets.

If they are to do so, they will have to keep wheeling out similar benefit packages every couple of years, I suspect. That’s what radical incrementalism demands: a constant stepping-up of effort.

And that’s hard when the Government hasn’t really challenged some of the old certainties. Wealth taxes are still too hot to touch. And ministers are still too worried about public debt. Transformative? Not quite.

But for almost the first time, there is a clear sense that the slow, cautious winning of trust among middle New Zealanders is finally paying off. Political capital has been built up, and is now being spent. More needs to be done. But it feels like a corner has been turned.

Stuff: Labour still haunted by economic ‘loser’ tag

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“I know they spent all the money!” The scene is 2015, and a focus group is flaying the economic track record of the last Labour government.

The group is presented with figures showing that Helen Clark and Michael Cullen had, in fact, run repeated surpluses and got government debt down to almost nil. Whereupon – in the recollection of one observer – a member of the focus group angrily says, “No, no, no. That can’t possibly be true. You must be talking about some other kind of debt … Because I know they spent all the money!”

Once negative perceptions set in, facts can’t always shift them. And this will shape Finance Minister Grant Robertson’s approach when he delivers the Budget the week after next.

Labour and its global counterparts suffer from an entrenched view that conservatives are somehow better with the economy, irrespective of facts. It doesn’t help that many left-wing parties were unfairly blamed for the global financial crisis and the resultant spike in public debt.

But it’s more than that. In the US, for instance, the economy has grown faster and more jobs have been created under Democrats than under Republicans. But the negative perception persists.

In extremis, even promises to spend up large on health and education fail, because voters refuse to believe left-wing parties can afford them. That leaves Labour politicians in a defensive crouch, “terrified”, in the words of one former staffer, of being seen as economic losers.

Hence 2017’s Budget Responsibility Rules, which constrained government debt and spending, in line with the post-1980s economic orthodoxy. The rules may have hamstrung Labour, but for Robertson, being able to shout “surpluses, surpluses, surpluses” defused an array of National attacks.

Now, by handling coronavirus well, and thus limiting the economic damage, Labour has – for the first time in ages – become the party most trusted on the economy. That trust is fragile, though, and could easily flow back to a classic National Party “sensible man in a suit’’, if only the Nats could stop forming circular firing squads.

That’s what Labour’s most left-wing critics don’t fully grasp. The world of economic perceptions is not a level playing field; for Labour, a false step can be fatal.

On the other hand, the flaws in Labour’s recent approach are clear. The party wins by ensuring voters aren’t worrying – or talking – about the economy, by keeping things ticking along, by defusing the issue.

But that leaves it unable to make the structural changes needed – to restore frontline staff’s share of company profits, to tax capital gains like any other kind of income, to fund public services properly by boosting government spending from 30 per cent to 40 per cent of GDP – lest it frighten the horses.

Consider also the coronavirus lesson: protecting people turned out to be the best way to protect the economy. And the global picture has shifted. After the 2008 financial crisis, the debate was dominated by austerity and public spending cuts; now, it’s all about government stimulus. Inequality is more salient.

Even the National pollster David Farrar thinks New Zealanders will in future “feel much more positive about [the] big state” that saved the economy from collapse.

All this could be the core of a different economics, combining old elements – like 20th-century ‘‘Keynesian’’ government spending to counteract recessions – with new ones, like the need for growth that respects environmental limits.

It would draw on the Italian-American economist Mariana Mazzucato’s ground-breaking work, which shows how governments create whole new markets by picking big social ‘’missions’’ and mobilising behind them private-sector innovation that would otherwise never occur.

In this view, the economy is not something organic that should be left alone but rather a machine in need of constant adjustment. It needs government to direct it, actively using its taxing, spending and regulating powers, and investing in people, to ensure economic growth is built from the bottom up, or the middle out.

You could call it Living Wage economics, since better-paid staff often work harder and quit less often, making the Living Wage a benefit, not a cost, to their company.

So far Labour hasn’t fully capitalised on its coronavirus success. Businesses know the wage subsidy saved their bacon. But Labour has yet to translate that into support for everyday – as opposed to crisis-based – active government.

Recent moves to clamp down on property investors, though – plus free trades training, and instructing the Productivity Commission to re-examine immigration policy – hint at a new approach.

Robertson has said he wants to fix long-term failings like unaffordable housing, runaway climate change and ingrained child poverty; we can likely expect something in the Budget on the latter two.

Mostly, though, Robertson will be balancing old and new, rehashing public-debt fears while quietly trying out a few new lines. He’ll still be worried about the economic losers tag. But he has room to accelerate the shift towards a new world – and must do so, lest we remain forever trapped in the old.

Wealth inequality: the full datasets

In 'Wealth Inequality in New Zealand', a working paper for the Institute for Governance and Policy Studies, myself and my co-authors, Geoff Rashbrooke and Albert Chin, examine the distribution of wealth in 2014-15 and 2017-18. The working paper presents the data in some depth, but inevitably, for reasons of concision, we have not been able to include all of our original data, generated in conjunction with Statistics New Zealand.

Instead, our original datasets are available as Google Docs through the links below. Any queries concerning them can be addressed to me using the contact details in the footer.

1. Wealth shares and boundaries

2. Upper-end wealth

3. Ownership of different assets, broken down by five groups

4. Ownership of different assets, broken down by deciles

Stuff: Plan and budget both AWOL in child poverty fight

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No plan, and no budget: that’s the public state of the prime minister’s much-touted drive to slash child poverty rates in a decade, according to documents released to me under the Official Information Act.

I acknowledge, of course, the progress thus far. One of Jacinda Ardern’s first steps on taking power was to bring in the $5.5 billion Families Package, which raised government payments to nearly 400,000 families by $75 a week each. She has also lifted benefits by $25 a week and ensured they will always keep pace with wages.

Under Ardern, child poverty has fallen on every measure, improving the lives of thousands of families. Take, for instance, the proportion of children living in households with less than half the typical income, the point at which basic necessities become severely unaffordable. That figure has fallen from 16.5 per cent to 13.8 per cent, lifting 25,600 children out of poverty.

This solid achievement had put the Government on track to meet its short-term 2020-21 targets. But coronavirus may have derailed that train. And the long-term targets for 2027-28 are extraordinarily ambitious. They require poverty rates to be slashed by two-thirds, falling from 16.5 per cent to just 5 per cent on the above measure.

To free 130,000 children from poverty would be an historic, world-leading achievement. But to get there, the Government will need at least two things: a plan and a budget.

I don’t expect them to know all the details yet, or give away their hand. But I do expect them to have scoped out the options, to have calculated that increasing benefits by $100 a week would lift so many thousand children out of poverty, and so on. If they’d done that, they’d also have a budget, an idea of how much that whole plan would cost.

Of course such calculations are hard to do, and always approximate. But without them, we simply can’t assess whether the prime minister’s pledge to slash child poverty is credible or not.

So I asked the Government for those two things, the plan and the budget. The response? They don’t exist. “No specific document precisely matches your specific request,” the Department for Prime Minister and Cabinet told me. In the documents they did release, Child Poverty Unit officials offer to help the prime minister establish “an agreed whole-of-government work programme for reducing child poverty”. The plan is yet to be written, then.

Of a budget, there is no sign whatsoever. Perhaps more work is going on behind the scenes. But as it stands, there is no budget or plan publicly available for one of this Government’s core missions, four years into its term.

Some might ask: does this matter? Can’t the Government just make changes ad hoc?

Not so, for several reasons. Coronavirus has made things much harder. And to make continuous inroads into the poverty numbers, the Government will have to lift families experiencing ever-deeper poverty and ever-greater forms of dysfunction. That will take careful, coordinated effort.

It will also be expensive. The documents released to me argue that “substantial income support packages” – that is, benefit and tax credit rises – “are likely to be required every few years”. Most experts think it will cost billions of dollars annually to meet the targets.

This presents a colossal challenge for a Government that has shied away from every major tax-raising proposal. There appears, at first glance, a nasty contradiction between the Government’s stated aims and its likely inability to raise the money required.

So we need Ardern to tell us exactly how she will meet her long-term targets, how much it will cost, and where those funds will be found.

The issue also cuts to the heart of her Government’s credibility. Bear in mind that Ardern made herself minister for child poverty reduction. It’s not that she doesn’t care. Nor is she a lightweight: she knows the subject inside and out, diligently reading – I’m told – even the driest of technical papers.

The lack of political courage to raise taxes is a greater problem. So too is the inability to drive change from the centre. More than most governments, this one seems to struggle to identify a few key aims and force the public service to achieve them.

In the documents released to me, the Child Poverty Unit – which numbers just four full-time staff – notes the need to “ensur[e] other ministers and agencies are clear about the role … they play in delivering on the government’s commitments in this area”. I suspect this is code for, “Ministers aren’t taking the targets seriously enough.”

I write all this not in anger but in fear – fear that the Government simply doesn’t grasp how big a task it has set itself. Ardern has some immediate opportunities to convince us all otherwise: a Budget next month, an announcement on new child poverty targets for 2024 the month after.

But if her plans remain opaque, the doubts will only grow.

Stuff: Another blow for the doom-mongers

Read the original article on Stuff

All around me I see people succumbing to despair. The world looks dark, and it seems – in some quarters – to have become the savvy thing to heed only the most downbeat predictions, to trust the doom-mongers. But in the last couple of years those commentators have been consistently wrong.

Take the coronavirus vaccines. When the outbreak began, even experts assured us it would be years before a vaccine was developed. It took nine months.

The rush has had some downsides: the Oxford vaccine, currently being investigated for links to potentially fatal blood clots in a very small proportion of recipients, may not be completely safe. But the other vaccines appear problem-free, and are being rolled out globally at an exceptional pace. Over half of Israelis and Brits have received two jabs and one jab respectively. (Our roll-out has been far slower, though we started from a stronger, almost coronavirus-free position.)

While the vaccines won’t solve all our problems, they will make the coronavirus immeasurably easier to live with. They also represent a triumph of human ingenuity. Humanity may have brought the outbreak on itself, the insatiable drive for economic growth pushing us further and further into the pristine native habitats where such viruses would otherwise circulate at no risk to ourselves. At some point we will have to reckon with that fact. But at least we have, using all our vaunted powers of innovation, found a quick fix. And that’s not what the doom-mongers foresaw.

Speaking of vaccines: how well are the Americans doing? Over 100 million of them have now had at least one jab. Turns out you can work wonders if you actually have competent people leading your country. And that’s another area where the doom-mongers got it wrong.

President Joe Biden was always going to be popular in New Zealand, given that surveys showed just 11 per cent of us would have voted for Trump if we had the chance. But the doom-mongers didn’t give Biden much of a chance.

Trump’s grip on middle America was too strong, we were told. The politics there were too poisonous, the voters too ready to believe his propaganda. Well, that proved false, albeit only just.

The fallback doom-scenario was that even if Biden won, Trump would steal the election. But while he gave it a good go – what we saw at the Capitol on January 6 was nothing less than an attempted coup – he ultimately failed.

But even if Biden resisted Trump’s attempted fraud, the darkest scenario ran, he wouldn’t be able to govern a hopelessly divided country. Well, he’s already passed a US$1.9 trillion stimulus package that is predicted to halve child poverty, and is gunning for a massive infrastructure spend-up that would reorient America towards a low-carbon future.

Speaking of climate change: that might be another issue where the doom-mongers are wide of the mark. Of all the dark things in the world, it is, admittedly, the darkest. We are already seeing its effects. We have watched wildfires burn around the globe, each incident a harbinger of what we can expect in a warmer world. Some sea-level rises are also inevitable, no matter what we do now. The poorest regions are being, and will continue to be, worst-hit.

But the gloomiest views – like the claim, echoed by the prominent US Democrat Alexandria Ocasio-Cortez, that “the world is going to end in 12 years if we don’t address climate change” – are obvious hyperbole. The darkest predictions are based on scenarios in which countries stay on their current carbon trajectories, something that simply will not happen.

In fact, there are signs of progress. In December last year, the Climate Action Tracker, a global not-for-profit initiative, argued that the Paris climate goals – to keep warming to below 2° Celsius, and ideally 1.5° – were coming “within reach”.

The Tracker folk are no softies: they like to label countries’ climate plans “highly insufficient” or “critically insufficient”. So what’s changed their minds? Big new net-zero emissions commitments from China and the US, among others.

The obvious problem remains, of course: countries so far have been much better at the relatively easy stuff, the long-term commitments, than the hard stuff, the short-term moves to actually reduce emissions. Those emissions continue to rise, year after year.

But the momentum for a greener world is growing. Australia is building huge renewable-energy batteries, each bigger than the last. More than half the cars sold in Norway last year were electric.

Naive optimism serves no-one; but a guarded, grounded optimism is a vast improvement over despair. Hope in the dark, as the author Rebecca Solnit calls it. We are too prone to believe the darkest predictions, forget them when they are invalidated, and fall for them all over again the next time. So we need to keep reminding ourselves that the gloomiest scenarios are not always the right ones.