The Post: Is degrowth the planet's saviour or a left-wing menace?

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On the fringes of environmental debate lurks an apparently radical idea: degrowth. Some see it as the only solution to the climate crisis; others, as a threat to human prosperity.

Where the truth lies is hard to know, because like many new movements, degrowth is intellectually chaotic. As the name suggests, its origins lie in a forthright rejection of the necessity of economic growth. Superficially, though, its modern proponents have jettisoned this stance.

One recent summary of “degrowth” proposals for reforming production and consumption finds none that actually mention reducing growth. Anthropologist Jason Hickel, a key proponent, insists the aim is to cut not GDP but “excess resource and energy throughput”.

Why, then, give the movement such an unhelpful name? Because the line that it’s “not about reducing GDP” may be mostly rhetoric. Hickel, for one, largely dismisses the value of economic growth, and believes developed nations could thrive on just US$10,000 per person, one-fifth of what New Zealanders enjoy.

Alongside this desired (if disavowed) downscaling of rich economies, degrowth is also an excuse to promote various left-wing causes – co-operatives, shorter work weeks, wealth redistribution – that may be worthwhile, but are only loosely connected to the core theme. Indeed, one of the books currently on the radical-left reading list, Japanese economist Kohei Saito’s Marx in the Anthropocene, is subtitled “towards the idea of degrowth communism”.

Are these ideas useful? To answer that question, we must first ask another: what, ultimately, is GDP? It is, at the risk of oversimplifying, the annual value of the goods and services bought and sold in markets: things exchanged for money. (Accounting for government and other services complicates this picture somewhat.)

This is, famously, an incomplete measure of progress. It values some destructive things, such as the cost of cleaning up oil spills, while ignoring positive ones, such as raising children. Degrowthers love to claim politicians have become “addicted” to raising GDP, pursuing it without cause. But most leaders have privileged it for a perfectly good reason: it marks a lifting of living standards.

There are many things we cannot achieve without conventional economic exchanges. Think about complex medical items like dialysis machines or cancer drugs. These cannot be created efficiently by people in their own homes, or voluntarily in small communities, or by the state’s commands alone.

The hugely complex web of interactions required – thousands of people being organised and motivated to produce output – can only be brought into being through markets.

Economic growth can, on its own terms, be a good thing. Up to a point, it is associated with higher wellbeing, increased happiness and longer lives. Developing countries need more of it. But it is not an end in itself. And of course it can – and has – come at the expense of the environment.

The answer is not to abandon economic growth, then, but to subordinate it. We must insist on rock-hard bottom lines for the planet, reversing the degradation of recent decades. We must stick strictly to the timetable for cutting carbon emissions roughly in half by 2030, and to net zero by 2050. Rich countries, in particular, must curb their pollution.

If, while respecting those bottom lines, we can have greater economic growth, that will often be a good thing; but if not, too bad. Rather than degrowth, this philosophy might be described as a-growth: just as a-tonal musicians are largely uninterested in conventional tonality, a-growthers are relatively agnostic about GDP, not obsessed with increasing or reducing it.

Once degrowth’s attention-grabbing label and false simplicity are set aside, many of its arguments actually amount to a-growth. And that’s a more fruitful concept. It encourages us, for instance, to better use the growth we do have, redistributing income so more people can live better within the current economic envelope, and prioritising the growth needed for medical equipment over that which serves pointless over-consumption.

What remains, though, is Hickel’s point about cutting energy and resource use. It is an open question whether we can, as “green growth” proponents hope, achieve our climate targets while bolstering the economy.

Hickel and others claim that, because even renewable energy has environmental impacts, we cannot attain this utopia: there is no way to slash emissions without massively reducing energy and resource use and, by extension, economic growth.

Certainly we are using the earth’s resources at a wildly unsustainable rate. But remember that the doom-mongers said for decades we couldn’t reduce carbon emissions while growing the economy, and were dead wrong: dozens of countries are now doing so. (This holds even when their imported emissions are counted.)

If it can be done for carbon, it’s not impossible it could be done for all resources. That, though, is a question of facts and sober assessments, not a sweeping philosophical rejection of a concept – economic growth – that lies some way from the heart of the matter.

Guardian: New Zealand’s millionaires pay lower tax rates than cashiers – it’s time to fix the system

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It was a conclusion that many had suspected but until now couldn’t prove: New Zealand’s multimillionaires, according to a bombshell Inland Revenue report released this week, pay a lower rate of tax than supermarket cashiers.

The report shows that New Zealand’s 311 wealthiest families pay just 8.9% of their income in tax – less than the rate paid by a minimum wage worker (10.5%) and less than half the rate paid by the average Kiwi (19.7%).

These wealthy individuals have such a low tax rate because so much of their income (about 80%) is capital gains – money made from selling assets – and that is barely taxed. Only 17% of their income is conventionally taxable income like wages and salaries. So despite being worth an average of NZ$276m ($168m; £135m) each, and typically earning $8m a year, these families pay an average of about $640,000 each in tax – less than 10% of their income.

One of the most striking findings from the report is that the 8.9% tax rate paid by New Zealand’s richest is almost identical to the 8.2% paid by the 400 wealthiest American families, according to research carried out by the US Council of Economic Advisers.

Those wealthy Americans are notorious for paying very low tax rates, and indeed for avoiding playing by the same rules as their fellow citizens. What the Inland Revenue report suggests is that New Zealand’s wealthy, though far less ostentatiously plutocratic than their American counterparts, are equally adept at working the system to their advantage.

Meanwhile, a companion report by Treasury analysts shows that New Zealand’s well-off are even wealthier than previously thought. The 0.01%, roughly 400 taxpayers, own something like 2.4% of all wealth – more than the entire bottom half of the population.

For anyone who believes that fairness matters, and that those who can most afford it should contribute more to the collective pot of taxes, these are outrageous findings. They are also a reminder of the profoundly unbalanced nature of a New Zealand tax system that asks a lot from its poorest citizens but relatively little from the best-off.

Low-income workers pay a flat-rate GST that takes a bigger chunk out of their incomes than it does for richer families, while also paying tax on every cent they earn. Conversely, as the Inland Revenue report demonstrates, the well-off pay a relatively low rate, in the absence of any meaningful tax on capital gains or wealth. New Zealand does have a “brightline” test but it captures only the gains made by selling investment properties within 10 years – a fraction of all capital gains.

Tax advisers and right wing lobby groups have, unsurprisingly, attacked the report. But it holds up to scrutiny.

One objection is that the income of the 311 wealthiest families includes unrealised capital gains: that is, increases in the value of assets that have not yet been sold. For some, this is not “income”.

However, it is an increase in wealth that can be borrowed against, and will eventually turn into conventional income once sold. If the research – which covered the six years from 2015 to 2021 – had counted only the sales made during that time, it would have underestimated the accumulated capital gains of the wealthy.

Critics have also seized on the super-large house-price rises of 2020 and 2021 to argue that the report chose an artificially bloated period. But the results are largely the same even looking at longer time horizons.

It is, in short, an impressive report, one that lifts the veil of secrecy surrounding the tax affairs of the rich. It also hints at the huge amount of tax – undoubtedly in the billions of dollars during that six-year period – that was lost by not taxing capital gains.

Whether the Labour government wants to go down that road again, having lost a battle to introduce a capital gains tax in 2019, is far from clear. But the arguments for doing so have only got stronger.

Spinoff: Our unfair tax system has been exposed – will Labour do something about it?

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Although the outcome of the forthcoming battle over taxes is no clearer now than it was last week, the territory on which that battle is fought has changed forever.

Wednesday’s landmark report from Inland Revenue shows that the 311 of the wealthiest New Zealand families are paying a lower rate of tax than minimum-wage workers. They only pay 8.9% of their income as tax (or 9.4% if you include GST), largely because most of their income is taken as capital gains, which we don’t tax in any systematic fashion.

Many have long harboured suspicions that this is the case. But it’s one thing to suspect a given situation exists, another thing entirely to be able to prove it. 

The wealthy’s veil of secrecy has been pulled aside and we now have, as revenue minister David Parker put it in a speech yesterday, proof of “a fundamental unfairness” in the New Zealand tax system. Virtually every developed country in the world, except us, taxes capital gains. They also tend to tax land, property, house sales or wealth as a whole.

The Inland Revenue report, and the appalling inequity it reveals, has permanently changed the debate on these issues. The knowledge that multi-millionaires pay a lower tax rate than aged-care workers will tilt all future discussions towards greater fairness and towards trying to ensure that those with the deepest pockets pay their fair share. The report will provoke outrage from ordinary people who pay tax on every cent of their income, and expect others to do the same.

The report will also make people think about the revenue lost by not taxing capital gains. The lost revenue from the 311 families in the report – roughly 0.01% of taxpayers – is clearly in the billions of dollars over several years. If we extrapolate out from there to include the rest of the top 1%, some 40,000 people, the sums will be even more enormous.

But as Parker asked rhetorically in his speech, “What, if anything, do we do [in response]?” Here is where things are less clear. The territory has shifted, but tax remains a very hard battle to win, in New Zealand at least.

Having got the data he long desired, Parker’s next move is to introduce a Tax Principles Act, which will enshrine a statement of the values underpinning the tax system – fairness, efficiency and so on – and require reporting against related measures, including the tax rate paid by the wealthiest.

Whether this will have any lasting effect is unclear. Right-wing groups have already made it clear they dislike including something called unrealised capital gains in the definition of income the Inland Revenue uses. That is, increases in the value of assets that have not yet been sold.

Parker can argue, correctly, that this is income. Not only is it an increase in wealth that its holders can borrow against, it will also eventually turn into conventional income when sold. And if such unrealised gains aren’t counted, the true incomes at the top end will be understated.

But it wouldn’t be hard for a future National government to change this definition. So beyond reporting measures, the real question is whether Labour wants to introduce anything that will deal with the problem their own agencies have identified. 

In particular, do they want to revisit the capital gains tax (CGT) debate? Although there are other options out there – including the Land Value Tax that TOP and others propose – a CGT is something Labour has extensively researched, is probably more politically palatable than the alternatives (though there is little specific polling on these issues) and would directly address the unfairness that’s just been revealed.

Contrary to much political commentary, a CGT was not universally unpopular: polls in both 2014 and 2018 showed around 40% of people in support (more than outright opposed it), despite the lack of a consistent campaign by either Labour or civil society. This suggests that a concerted and coherent push could get it across the line.

On the other hand, Labour remains scarred by the debacle of 2018-19 when it put the issue to a working group, was unable to defend its own policy for the duration, and saw the argument become lost as opposition and misinformation poured into the breach. It’s also unclear that now is the right time for tax rises. 

In the midst of a cost-of-living crisis and a probable recession, the public seems more in the mood for tax cuts than tax increases. Another option, of course, would be a tax “switch”: cutting the bottom rates of tax (or introducing a tax-free threshold) while bringing in a CGT.

Parker obviously favours something along these lines: in his speech yesterday, he said, suggestively, “If you do have a tax switch…” and, later, “There’s many ways to switch things.” But this isn’t Labour policy – which, he was careful to say, won’t be announced until later in the campaign – and it’s not a straightforward exercise either. 

Making the first $5,000 tax-free, for instance, would cost around $1.8bn. That would be a lot of revenue to make up, when a capital gains tax – if it applies at the moment people sell assets – takes a long time to raise much money. And the move would still face many of the usual right-wing attacks. So even with the scale of the problem now plain to see, the prospects for a proper solution remain distant.

Stuff: What's really going on behind the scenes of the latest tax battles?

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When you file your income tax return, or see the PAYE deductions from your salary, do you experience a gross breach of privacy? Nineteenth-century commentators thought so. Confronted with the then-novel demand to itemise his income to the state, one British critic labelled it an intolerable intrusion by “the pimply minions of Bureaucracy”. In New Zealand, the MP John Bryce argued that men would be tempted to file false returns – and, thus hardened to criminality, would pretty soon be turning to drink, hitting their wives and robbing banks.

All this was nonsense, of course. But it served to defend the well-off against a new levy and to buttress the belief that the contemporary system was fair.

Income taxes, of course, eventually won the day, and are now totally normal. This tells us two things. First, what counts as “commonsense” can change out of all recognition. The radical becomes respectable. And second, progress is often delayed, for a time, by people raising spurious objections.

Why is all this relevant now? Because those with vested interests and entrenched beliefs fear that change is in the air, and are mobilising against it.

Stoking their anguish is the much-trailed publication next week of an Inland Revenue report on the assets, incomes and taxes of New Zealand’s 400 wealthiest individuals. The research continues the agency’s long-standing interest in whether the wealthy play by the same rules as the rest of us.

Very often, of course, they don’t. Inland Revenue has had to carry out this research because the wealthy often refuse to fill out the statistical surveys which would otherwise yield this information, and which the rest of us readily answer. Officials also have a not-unreasonable suspicion that the wealthy are quite good at minimising their taxes.

One key issue is capital gains. If someone has a salary of $100,000 and also makes a capital gain of $100,000 selling an investment property, they pay $24,000 tax on the salary, but (often) nothing on the property sale. That means their total tax rate is $24,000 on $200,000 of income – just 12%, less than someone on the minimum wage.

This is the kind of thing Inland Revenue is investigating. But not everyone welcomes such scrutiny. A 200-page report published this week claimed to show, in the words of RNZ, that the tax system is “reasonably fair and equitable”. Written by consultants Sapere, the report partly bases its claims on “illustrative” examples of wealthy families who – conveniently enough – take hardly any of their income as capital gains.

Indeed, to claim that the current system works, one has to ignore all kinds of data. The 2019 Tax Working Group showed that, once GST is included, poorer families pay about the same rate of tax as middle-class ones – despite being evidently less able to afford it.

And at the upper end, tax rates almost certainly fall. In 2020, Treasury estimated that many wealthy New Zealanders pay a rate of less than 10%, partly because much of their income may be untaxed capital gains. Next week’s report is a more detailed attempt to answer the same question, but as it stands, the best estimate is that many millionaires pay a lower rate of tax than supermarket cashiers.

Yet the irony here is that those mobilising against tax reform – which now includes the chartered accountants’ association and the National Party – may have little to fear. Though they seem convinced the Inland Revenue report presages a capital gains tax (CGT), this is far from obvious.

In technical terms, a CGT is relatively straightforward: for all the hand-waving one hears about unintended consequences, the truth is that Australia, the US, the UK and nearly every developed country has introduced one without major issues. The problem, rather, is that the politics of tax is difficult at the best of times, let alone during a recession, and the government remains badly burnt by its last failure to implement a CGT.

The Inland Revenue report will, nonetheless, hand Labour a large dilemma: if, as expected, it shows very low tax rates at the top end, the government will either have to do something about it and face a massive political fight, or explicitly say it will do nothing to right the injustice its own research has identified.

The establishment would, of course, prefer inaction. Sapere, conveniently, warn that the mere act of researching top-end tax rates could create “a more uncertain environment for investment” if the well-off fear it foreshadows a CGT.

Democratic debate, in other words, should be constrained lest it harm established interests. Which would be convenient for the wealthy – for if there is one thing we can take from the nineteenth-century defeat of income tax’s opponents, it’s that bad ideas don’t stand up to scrutiny. But, as a corollary, the good ones eventually win out.

Spinoff: Revealed: The four suburbs where house prices have slumped to pre-Covid levels

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Like the world’s most socially harmful rollercoaster, the New Zealand housing market has left its 2021 peak behind and in some suburbs is – according to new data released to The Spinoff – descending with dizzying speed. 

There are now four neighbourhoods where the average house price is below its pre-pandemic level: Auckland’s Newmarket, and the Wellington suburbs of Oriental Bay, Pipitea and Wellington Central. According to data produced by real estate platform OneRoof and its partner Valocity, average prices in those areas are now $4,000-$55,000 lower than their February 2020 value. These falls are only in the order of a few percent: prices in Newmarket, for instance, have dropped from an average of $895,000 pre-pandemic to $866,000 today. But even that was hard to imagine when prices were rising 30% in 2021 alone. 

And other suburbs are hot on their heels. A fall of just a few percent more, and five further suburbs, again concentrated in the nation’s two largest cities, will join the reversing-Covid-gains club: Grafton and Manukau (Auckland), and Te Aro, Mt Cook and Mt Victoria (Wellington). 

OneRoof editor Owen Vaughan says the price falls have – unsurprisingly – been concentrated in areas “that rose quite sharply during the boom”. The nation’s capital, arguably the frothiest of all during the pandemic, has had correspondingly the biggest collapse. Whereas in suburbs like Oriental Bay, owners in the pandemic had been “cashing in – selling off their properties and making quite a bit of money off it”, they have since reverted to their usual habit of holding onto their houses for long spells.

Other suburbs have also experienced startling falls in value, albeit without completely wiping out their (even more startling) pandemic-era price rises. In Auckland’s Herne Bay, average prices have fallen $647,000 from their 2021 peak (to a mere $3.58 million); in Wellington’s Roseneath and Kelburn, the falls have been around $555,000 and $545,000, respectively. 

Of course the housing market as a whole has not returned to its pre-pandemic level. The biggest post-peak fall, by region, is Wellington’s 22.8%, but even that is a long way short of wiping off the 40% rise that occurred nationally during 2020 and 2021. Other regions, like Canterbury and Otago, have seen price falls (compared to their peak) of just 5% – “minuscule”, in Vaughan’s words. 

Prices in Christchurch in particular have kept defying gravity. In nine of its suburbs – Avondale, Linwood, Woolston, Wainoni, New Brighton, North New Brighton, Little River, Phillipston and Aranui – prices have risen by 50% since February 2020, and fallen back only a few percent from their pandemic-era peak. “It [Christchurch] is seen as an affordable sector where prices aren’t as insane as they have been in Auckland,” Vaughan says. “You can still get quite a lot of house for your money.” A wide range of house types are available for purchase, and many have been strengthened since the 2011 earthquake, raising their perceived value.

Generally, though, prices have fallen across the country. According to interest.co.nz, the typical house-price-to-income ratio is, at 7.4, more or less back where it was in April 2020. Good news? Only until one remembers that, even in early 2020, New Zealand had some of the world’s most expensive housing, relative to incomes. Internationally, a sensible price-to-income ratio, one in which homes are generally considered to be “affordable”, is more like three to one. 

What does all this mean? It suggests, first, that a modicum of sanity is being restored in some suburbs, though they also tend to be the pricier ones. And while this is good news for first-time buyers, interest-rate rises are also making it harder to service a mortgage than at any time in the last decade.

Those who bought at or near the peak, meanwhile, will have the unpleasant sensation of being underwater, in the jargon. But for those who can sit tight, this may not matter too much: one’s ability to pay the mortgage is based on one’s income, not the house’s value, and in the long run prices tend to rise. 

Vaughan says the current house price falls are very much a function of higher interest rates raising expected mortgage costs: “It’s not a case of [buyers saying], ‘I’m not paying that!’, it’s a case of, ‘I can’t pay that.’” What happens next is unclear. As the Reserve Bank’s rate hikes are predicted to plateau shortly, many commentators are picking the bottom of the market to arrive around mid-year or soon after. Slowing house construction and renewed immigration might also push prices up. 

If, conversely, the predictions of a deeper-than-expected recession evaluate and tens of thousands lose their jobs, one of the forces “stopping a free-fall” in house prices – the strong labour market – will have been removed, Vaughan says. For all that, he doesn’t foresee “a massive decline on the horizon”.

In all this, spare a thought for those who, for whatever reason, need to move now, and may have to crystallise substantial losses, having bought high and been forced to sell low. That burden, though, was inevitable the moment the government allowed – or encouraged – prices to soar out of control at the pandemic’s height.

Stuff: What you get when no-one is focused on the common interest

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Bad urban planning. Classrooms lying empty in low-decile schools. A looming gap between rich and poor. The debate over education in Porirua East is a microcosm of modern suburban life, of New Zealand as we now know it.

The locus of this complex story is the Aotea Block, an expensive new ridgeline subdivision in Porirua East, where homes can sell for over $2 million. In a textbook example of inequality, its shiny new residences are perched high above the mouldering state houses of Cannons Creek.

A few years back, Block residents thought the subdivision would get its own primary school, something they greatly desire. But the Ministry of Education has quite rightly ruled it out. The suburb has grown more slowly than expected, and, crucially, there are at least eight primary schools in Cannons Creek and nearby Waitangirua, many with empty classrooms.

So why aren’t Block parents sending their kids to these schools? They are nervous, for one thing, about the challenges facing these predominantly low-decile establishments. Speaking to Block residents, I’ve heard understandable concerns that such schools may have worse facilities, struggle to retain the best staff, or enrol disproportionately troubled students who consume teachers’ attention. On the other hand, I myself attended exactly that kind of school, and found it an immensely rewarding – and academically successful – experience.

It is hard not to wonder if these schools’ large Māori and Pasifika intakes don’t play a role in parental decisions. New Zealand, after all, is a country shaped by the ‘white flight’ of parents who, in the two decades to 2013, took a staggering 70,000 Pākehā kids out of decile 1 schools. (I rather doubt the trend has reversed since then.)

In Porirua today, some 700 families bypass local schools in favour of the city’s more “desirable” northern establishments. And many of the excuses for doing so are unconvincing.

On the Block’s Facebook group, parents claim to favour decile 9 Papakowhai School in the north because it’s “closer” than decile 2 Rangikura – even though a quick glance at a map proves otherwise. (Rangikura, incidentally, gets glowing official reviews.) Other parents say they are happy to detour to Tawa’s decile 10 Redwood School on their way to work in Wellington, but – again – will not drive the few kilometres to Rangikura.

Even if there are valid reasons in individual cases, I have misgivings about the wider picture. As one sceptical person put it on Facebook: “If Aotea residents will go ‘out of their way’ to go to Countdown Aotea, how come they can’t handle another couple of km to go to Rangikura or Tairangi [school]? I think the elephant in the room here is people not wanting their child to go to schools based on a certain school’s suburb.” One local educator, speaking to me anonymously, makes a blunter argument: “There is no doubt in my mind that laced all the way through here is prejudice and racism and inequity.”

Also detectable is a consumerist mindset among parents: a view that you buy the “right” home zoned for the “right” school with the “right” classmates. It’s a long way from the traditional ethos that a local school is a community asset, one to be cherished and strengthened. Christchurch woman Stacy Silich, interviewed by Stuff a few years back, embodied that ethos, saying: “If my local school isn’t good enough for my children, then surely it isn’t good enough for any child. [And] if that’s the case, we should be investing in our school community to help them be the best they can be – not using our privilege to get into another school, but using our time, skills, voice and energy into strengthening our local schools.”

On the other hand, Block residents do deserve some sympathy. As rising mortgage costs and grocery bills force parents back into work, few are left with time to serve on a school board.

These parents are, what’s more, the victims of poor urban planning. At one stage in the subdivision’s development, a road connecting it to Cannons Creek was proposed, only to be dismissed as having “little strategic value”. This leaves the Block cut off from the suburbs below, a situation not helped by an inadequate bus service. To get to most nearby schools, parents would have to drive their kids the long way round, adding to traffic and carbon emissions.

The last time I visited, the Block had virtually no collective infrastructure: no community centre, no church hall, almost nowhere to build connections and create a shared life. No wonder parents desperately seek a school as some kind of local hub. The Block, in short, is what you get when urban form is left largely in the hands of private developers, and no-one is looking after collective goods like community centres and high-quality public transport. A neglect of the common interest lies at the heart of so many of our problems.

Stuff: How will Hipkins tackle stagnating progress on child poverty?

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Prime Minister Chris Hipkins is known to dislike the nickname Chippy, a hangover from his student days.

Given the way he has chewed through Jacinda Ardern’s old policies, maybe we should instead call him the Wood Chipper: big, gnarly policy offcuts are fed in, and out comes a handy pile of pie-related photoshoots and small-target appeals to swing voters.

Judging by Thursday’s poverty statistics, however, Hipkins has a new problem from the past to test his well-honed political skills.

When Labour came to power, it made a big play about addressing child hardship. It was, Ardern made clear, a moral stain on the country, as well as an appalling waste of potential.

Making herself child poverty reduction minister, Ardern set her government immensely demanding targets. Ever since the Rogernomics reforms of the 1980s, and the cruel benefit cuts of the 1991 Mother of All Budgets, New Zealand has had some of the developed world’s worst child poverty rates.

When Ardern came to power, the number of children living below the poverty line – often defined as half the typical household’s income, because that’s the point where paying the bills gets unmanageable – was 16.5%, or one in six.

By 2028, she wanted that down to just 5%, or one in 20. This would represent an extraordinary accomplishment, slashing the amount of misery experienced by struggling families and taking the country from among the developed world’s worst performers to among its best.

In the early years of her government, things went well. The Families Package put $1 billion a year into poor households’ pockets, through the Best Start payment, increases to Working for Families, and other policies.

The poverty rate dropped from 16.5% to around 13% in 2020, lifting 30,000 children above the line and into a better life.

Since then, though, progress has ground to a halt. The child poverty rate, Thursday’s data showed, was about 12% in June last year. On all measures, it was essentially flat between 2021 and 2022.

On the one hand, it is a testament to the government that, during a pandemic, it did not allow overall poverty rates to spike. Some people may ask how the official figures can say as much, given that the media are full of stories of spiralling foodbank use and the catastrophe that is emergency motel housing. But the two stories are not inconsistent.

The most vulnerable people have, during the pandemic, found things unbearably hard; their misery, the depth of their poverty, has clearly increased. But at the same time, tens if not hundreds of thousands of families have benefited from Labour’s ongoing minimum wage increases, tax-credit rises, and a $100-a-week boost to the core benefit since 2018.

That has helped lift, or at least sustain, their incomes, resulting in a flat overall child poverty rate.

Even that, though, poses real problems for Hipkins. Like someone leaving the hardest jobs till last, the Government has pencilled in the biggest poverty reductions for the final period covered by its targets, 2024 to 2028.

Getting the child poverty rate down from its current 12% to the 5% Ardern envisaged would be a mammoth task in just four years. Labour’s problem is that although there are several big levers it can pull to reduce poverty – wages, benefits, housing and services like health and education – it has so far only leaned on them modestly. Its actions, though meaningful, have never matched the image of a great moral mission that was sketched out in Ardern’s rhetoric.

If policies are to match words, we need to lift wages for the 40% of poor children who have a parent in full-time work. We under-invest in retraining and skills schemes for the unemployed. Families on benefits still do not have enough income to lead a life of dignity, and they are denied some Working for Families payments that go to in-work households, even though their children’s needs are just the same.

Some 12,000 places have been added to the social housing stock, but we are still tens of thousands of homes short of where we were in 1991 (adjusted for population). The schools and health clinics servicing poorer families also need greater investment.

In particular, the Government’s own officials have said it needs to deliver a Families Package each term, if it is to meet the targets. But no such package was evident this term.

Hipkins will have to explain how, if re-elected, he will find the required $1b a year. But he seems hamstrung by being, like his predecessors, terrified of talking about tax.

In Labour’s view, better-off New Zealanders don’t like it, and don’t necessarily want to pay more of it to help those who are struggling. The stagnation of progress on child poverty, in other words, reflects Labour’s long-term inability to challenge some of the core assumptions of New Zealand politics.

RNZ: A three-point plan to clean up lobbying and vested interests

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How many times have we been told New Zealand is a country where anyone can get a meeting with a politician? It's a line constantly used to defuse criticism about the influence that lobbyists and vested interests have on big political decisions.

The underlying message has always been false, of course. Constituents have a decent chance of talking to their MP, but access to the real decision-makers - Cabinet ministers - has always been hard to get. Many individuals and NGOs can attest that it is possible to ask repeatedly for a meeting and get nowhere.

Conversely, as shown by Guyon Espiner's devastating reportage this week, some lobbyists have extraordinary connections. They cheerfully send texts inviting ministers and staff to boozy events. And we can be sure the same happened under previous governments. Clearly some people have far more access to ministers than others.

We also know that, unlike many other countries, New Zealand suffers terribly from the 'revolving door' phenomenon, in which people move seamlessly from politics to corporate life and back again. What should be confidential government information gets instantly turned to private use, giving some people an unfair advantage over others and raising the likelihood that public decisions will be perverted to favour private interests.

I am part of a group of experts and academics who have helped Health Coalition Aotearoa, an advocacy group, come up with a three-point plan to clean up lobbying and vested interests.

Point One is a Lobbying Act that would create a register of lobbyists - containing their names and their clients - and an online searchable database of every meeting they have with decision-makers. 'Lobbyist' would be clearly defined, as it is in other countries' regulation, to include only those influencing government as part of their job - not ordinary people contacting their MP.

All lobbying - from NGOs just as much from corporates - would be caught. The aim is not to bar lobbying, as people have a right to contact decision-makers, but to bring it out in the open, so that we can look for imbalances in who is influencing ministers.

The Lobbying Act could also mandate some kind of "cooling-off" period before people leaving politics can start lobbying. Personally, I would suggest a three-year stand-down, so no-one can work in government and lobby in the same Parliament, and so their inside information loses its currency. But I note concerns from Māori researchers that this could create undue problems for people moving between government and iwi or hapū positions, so further work may be needed.

Point Two would be to introduce rules to ensure that contractors, senior public servants, and people appointed to government committees and boards must declare - or even remove - any commercial interest that might bias their decisions. This would apply to, for instance, health advisory board members who represent the alcohol industry, or public servants who own companies that could benefit from their own agency's decisions - a problem RNZ has recently exposed.

Point Three would be to reform the Official Information Act, so that there is proactive publication of advice and research provided to ministers. That way, we can better detect situations where ministers go against that advice, and look more closely to see if vested interests have biased that decision.

Will these ideas be taken up? Because the problem affects all parties, to a greater or lesser extent, few have had incentives to address it. However, the Green Party has long called for action.

What's more, the potential for change is greater now than ever. National might traditionally have resisted action that it saw as being aimed at the business interests that comprise part of its support. But the solutions being offered address all lobbying, not just that carried out by commercial interests, and media reporting has made clear the issue is not limited to the right of politics.

Labour, for its part, might once have been reluctant to take action that could have exposed its own weaknesses, or which could have been (wrongly) attacked for limiting participation in the political process. But it has a clear incentive now to clean up the issue, and will face limited opposition if it does so.

Promisingly, Prime Minister Chris Hipkins has said he "never shut the door on those conversations" about lobbying and cooling-off periods, while National leader Christopher Luxon has said now is "probably a good time to take stock" of the issue.

Reforms of this kind rarely happen without some kind of incident or protracted media coverage to spur action. That spur now appears to be present.

As the election campaign intensifies, my hope is that all parties will be asked to take action on this issue - and that they will see the need to do so. After all, preserving the integrity of political decision-making, and ensuring it serves the public good not private interests, is something in which all parties have a stake.

Stuff: Reviving a modern Ministry of Works necessary to cope with modern infrastructure demands

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It was, according to some, an outfit of “mere guessers and gamblers”; to others, an organisation “widely respected for its technical expertise”. The Ministry of Works, which from 1870 to 1988 oversaw the roads, railways and power stations that underpinned this country’s prosperity, was always divisive.

Now, in the wake of Cyclone Gabrielle, a proposal to revive it is once more sparking debate. New Zealand’s crumbling public buildings need $210bn of investment, the Infrastructure Commission estimates. Hospitals have sewage leaking down the walls; tens of thousands of state houses are required. To adapt to climate change, post-Gabrielle, the country needs to repair electricity substations and bridges, and build back greener with EV charging points and wind-power plants.

Labour has doubled the previous government’s infrastructure spending. But money alone won’t do it. Our public schemes frequently run late and over budget, suffer quality defects, and cost more than they would overseas. Just look at Transmission Gully.

One response would be to revive the Ministry of Works, which – until it was privatised under David Lange – was an infrastructure titan. Its teams of architects, engineers and other experts scrutinised project plans, designed buildings, oversaw private contractors – and often did the work themselves. Their legacy ranged from the Roxburgh hydro dam to Wellington’s Central Police Station.

All this became terribly unfashionable in the pro-market 1980s, when it was held that government should just “get out of the way” and give the private sector a free hand. But in a thought-provoking 2021 paper, researchers Max Harris and Jacqueline Paul argue for the (re)creation of a Ministry of Green Works. Their call has since been taken up the Council of Trade Unions, and is being heard more loudly in Gabrielle’s wake.

The need for some such agency is, I think, undeniable. The current debate over consultants has revealed how hopelessly, cravenly reliant modern government is on the Deloittes and Chapman Tripps of this world. The state has been hollowed out in recent decades, losing expertise, wisdom and savvy. One of the worst examples came in Kaipara some years back, where, following the grotesque failure of a wastewater project, it became clear the local council was so short-staffed it couldn’t even manage its contracts with private providers – let alone build anything itself.

Central government suffers, too. I spent years as an infrastructure reporter in London, and it became evident to me that British public servants, often trying to procure the one and only large infrastructure deal of their lifetime, were getting done over, time and again, by the sharp-eyed private contractors who did this stuff all day long.

What New Zealand needs, at a minimum, is a ministry of super-procurers: a team of infrastructure experts who have decades of experience behind them and can drive a tough deal with contractors. We should also restore the position of Government Architect and employ more engineers to ensure our public works meet high standards. One of the biggest failures of 1980s market-fundamentalism, after all, is that it ignored imbalances of knowledge. The state must retain some, rather than let it all be dispersed amongst private providers.

Fortunately, Labour knows this. In a little-noticed move late last year, it began repurposing Ōtākaro, the Christchurch rebuild agency, as a super-procurer that will help other departments deliver big projects.

What’s less clear is whether, as Harris and Paul propose, a new Ministry of Green Works should build things itself, employing legions of its own plumbers, electricians and other tradies. The argument is this would save having to pay private profit margins, and help keep a closer eye on quality.

Economic theory suggests, though, that competition and contracting-out works if the state can properly oversee what the private provider does. This is partly why governments outsource stationery, where it’s easy to check quality, but not, in general, prisons, where the evidence suggests it’s very hard to ensure contractors aren’t cutting corners.

The original Ministry of Works never resolved this tension, sometimes buildings things itself and sometimes tendering jobs. Today, the colossal deficiencies of Transmission Gully – the delays, the poor quality road surface, the endless disputes – suggest private contracting can end in debacle. But what, absent competition, would ensure a state construction agency was more efficient?

Sadly, there seems to be little direct evidence of how well the Ministry of Works performed. Rosslyn Noonan’s otherwise excellent history of the organisation, By Design, doesn’t explain how much ministry projects cost per square metre, nor how high their design standards were, compared to equivalent private-sector projects.

So I’d need to see stronger evidence before I embraced the idea of an all-singing, all-dancing Ministry of Green Works. But its advocates are broadly correct. It would be an important move in the ongoing drive to rebuild what is sometimes called state capacity: the government’s ability to provide the public goods on which we all rely.

Spinoff: Saying it’s ‘too late’ to mitigate climate change sounds seductive – but it’s wrong

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Say what you like about Maureen Pugh, but she’s a fast reader. Having claimed around 10am last Tuesday that she was “waiting” for evidence humans were driving climate change, the National MP was immediately told by her deputy leader, Nicola Willis, that she had “a lot of reading” to do; and just a few hours later, Pugh was reciting a hostage-video-style statement insisting that she did, in fact, accept the scientific consensus on human-made climate change. Since doorstop-sized climate reports from world bodies make for famously hard reading, it was an impressively quick turnaround.

On the other side of this comedy, though, lurks the not-unreasonable suspicion that Pugh doesn’t really believe the words she was made to recite, and nor perhaps do other National MPs. In correspondence posted on Twitter, Port Waikato MP Andrew Bayly said it was “unhelpful” to debate whether climate change was man-made, though under pressure he later acknowledged that “mankind has played a significant part” in warming the planet.

In National’s defence, the party supports the Zero Carbon Act, the corresponding target of no net emissions by 2050, and significant reductions by this decade’s end. Yet despite endorsing the targets, National has opposed nearly every emissions-reducing policy Labour has put forward, while offering little of its own. The 2030 goal cannot be met without difficult political choices. So if its MPs are wavering in any sense, it is not unreasonable to fear that a National government would find itself unable to summon the requisite will, and that the intensity of climate action might slip. It doesn’t help that its likely coalition partner, ACT, would repeal the Zero Carbon Act, and has no substantive climate policy beyond a vague pledge to tie the country’s carbon price to that levied by its main trading partners.

Meanwhile, influential right-wing voices have begun questioning the need for New Zealand to pull its weight. Matthew Hooton used his most recent Herald column to say that since New Zealand’s emissions are so small in the global context, and others aren’t inspired by our stance, we must shift governmental efforts away from cutting emissions (mitigation) and towards managed retreat and flood defences (adaptation). Although domestic emissions might still fall, he wrote, “New Zealand’s era of climate-change mitigation … is over”, while “the era of adaptation has begun”. He added: “Every dollar we now spend on domestic mitigation … is a dollar we cannot invest in adaptation.”

Elsewhere, ACT deputy leader Brooke Van Velden and left-wing commentator Chris Trotter have taken a similar line. It is a seductive message for those who wish to leave their lifestyles undisturbed, and an understandable response to the devastation of Cyclone Gabrielle, an event that concentrates attention on how best to protect vulnerable communities. But it is absolutely the wrong lesson to draw from that disaster.

Firstly, and most obviously, every tonne of carbon that we don’t emit helps reduce global warming and with it the severity of Gabrielle-style storms. Nor can we keep using that tired old excuse that we represent just 0.1% of global emissions. No-one would say that an economic powerhouse like the UK, though representing just 1% of the total, should do nothing; yet if you add up ten small countries like ours, they have the same emissions as the Brits. Clearly each must play its part in getting to net zero: New Zealanders are simply being asked, in the classic phrase, to “do our bit”. 

It is also ludicrous to think that, when it comes to climate action, we have somehow got out in front, in a naïve, self-harming attempt to inspire the rest of the world. In point of fact we are dreadful laggards. As UN data shows, we are one of only seven major countries to have increased our carbon emissions since 1990. Ours are up 26%. In Sweden they are down 81%. Emissions have fallen by 49% in the UK, 43% in Germany, and 6% even in the US. 

New Zealand’s failure has knock-on effects. Veterans of climate negotiations, such as Oil Change International’s David Tong, argue that developing countries have routinely used the increased emissions of countries like New Zealand as justification for also doing very little. And who can blame them, especially when the developed world’s huge historical emissions are taken into account?

The arguments of climate-action delayers are all the more frustrating given the long history of obfuscation on this issue. The 2014 documentary Hot Air showed how a chorus of right-wing voices – the Business Roundtable, corporate leaders and conservative commentators – used junk science and scare tactics to prevent climate action when it was first needed, back in the 1990s. They drew of course on the tobacco lobby playbook, seeding doubt where there should have been none.

Those now equivocating on man-made climate change, and calling for adaptation not mitigation, may be less cynically motivated than their predecessors. But they are equally mistaken. Climate policy is at yet another crossroads, and some commentators will have no shame in pivoting swiftly from saying “nothing needs to be done” to saying “it’s too late to do anything”. We mustn’t let that message take hold. Adaptation is needed, of course. But we must also reaffirm our commitment to cutting emissions – and keep the pressure on parties like National to prove they really can rise to the task ahead.