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

Read the original article on Stuff

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

Read the original article on Stuff

“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

Read the original article on Stuff

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.

All the things we could have done with a capital gains tax

I'm interviewed in this Spinoff piece about all the public services that could have been provided with the revenue from the capital gains tax, if the government had had the courage to introduce one starting this year.

Given the extraordinary gains currently being made in the housing market, it's safe to say that the revenue would have been substantial, and some seriously useful things – like providing free dentistry – could have been done with the revenue (along with some of the less serious ideas canvassed in the piece).

RNZ: Tackling child poverty a mountain that keeps getting steeper

Read the original article on RNZ

Tackling child poverty is like climbing a mountain that gets steeper with every step: easy at first, far harder as you enter the final push. So although the government should be cheered by yesterday's child poverty statistics, it must realise the scale of the task ahead.

In the two years since Jacinda Ardern's policies began to take effect - that is, from mid-2018 to just before last year's lockdown - child poverty fell on every single one of the nine measures the prime minister has set for herself.

Take, for instance, the proportion of children living in households with less than half the typical (median) income - households, in other words, who cannot afford the things necessary to participate in mainstream society and live with dignity. That proportion has fallen from 16.5 percent in 2017-18 to 14.6 percent in 2019-20.

Looking at the same measure but after housing costs have been included, the fall has been from 22.8 percent to 18.2 percent. That's 45,000 fewer children in poverty.

Consider, too, material hardship - the proportion of children in families who report they struggle to afford basic items like heating and decent clothes. That has fallen from 13.3 percent to 11 percent.

These are real achievements, and the government should be congratulated for them. Fewer children in poverty means less misery, less stifling of talent, less of a long-term burden on the public purse.

So is Ardern on track to meet her much-publicised child poverty targets? On a crude, straight-line projection, the answer is essentially yes.

Most problematic is next year's target for just 10 percent of children to be living in households with less than half the typical income, which looks set to be missed badly. But even on that measure, the 2027-28 target looks achievable.

On the measure that accounts for housing costs, the government has met its 2020-21 target (a reduction to 19 percent) a year early, and the current average reduction of two percentage points a year would see it meet the 2027-28 target of 10 percent with room to spare.

Material hardship, meanwhile, has been falling on average 1 percent a year, enough to meet next year's target of 10 percent and the 2027-28 target of 6 percent, if the average results so far are projected out on a straight line.

Four main obstacles

The future is never a straight-line affair, though. And there are at least four reasons to think that the longer-term targets might still be missed.

The first, of course, is Covid-19. The virus's economic fallout will have depressed average incomes, ironically making it easier to lift poor families closer to the middle. But the spiralling queues for food parcels suggest that extreme poverty, at least, may increase.

The second is that much of the reduction to date came in Ardern's first year, between 2018 and 2019. After that initial bump, partly the effect of the $5.5 billion Families Package, many of the measures actually got worse between 2019 and 2020. Even before Covid, progress was stalling.

Third, it is not clear what the government will do to help some of the worst-hit communities. Child poverty rates for Māori and Pacific peoples can be twice or even three times those for Pākehā. More positively, though, Māori children made up half of the most recent fall in material hardship numbers. Poverty rates are also much higher for children with disabilities.

Finally, and perhaps most problematically, the mountain to climb only gets steeper from here.

Ardern claimed yesterday that over 100,000 families were on average $100 a week better off thanks to her government. This is excellent, if true, but will only have been sufficient to lift over the poverty line those who were relatively close to it already. As the 2018 Welfare Expert Advisory Group calculated, many families would need $200 or even $300 a week to be raised out of poverty.

Each 'new' group of families to be lifted out of poverty, in other words, will cost more to help. They are also more likely to suffer multiple, overlapping issues - drug addiction, loan-shark debt, abusive behaviours, unstable living conditions - that will make it harder for them to convert extra cash into sunnier futures.

This makes the lack of a follow-up to the Families Package all the more troubling. Ministers like to talk about "radical incrementalism", the progressive realisation of demanding goals. But that implies that the Families Package should have been followed by something even more significant, something big enough to help the harder-to-reach households and genuinely keep the government on track.

So far there have been no major policy moves this term, and issues like the housing crisis are only making things harder. It is not clear that the government has either a coherent plan for meeting the 2027-28 targets or an estimate of the likely cost. Ardern and her colleagues can bask in the glow of some good first moves, but the future looks less rosy.

Spinoff: New housing and incomes data underscores breadth of Ardern’s problems

Read the original article on the Spinoff

Just-released pre-pandemic stats show that rises in disposable income have been matched by skyrocketing housing costs. And that poses a conundrum for the prime minister.

Jacinda Ardern’s critics, who see her as unable to solve the housing crisis or make meaningful progress on tackling poverty, will be emboldened by yesterday’s release of incomes data.

The Statistics New Zealand data, covering the nine months before the March 2020 lockdown, isn’t all bad news for the PM. The average household’s disposable income rose a healthy 3.9%, from $83,400 to $86,600, off the back of a similar increase the previous year.

But that increased income wasn’t evenly distributed. Central to this story is the ‘Income shares’ graph in the link above, which shows the income increases for nine groups of New Zealanders. As can clearly be seen, the groups traditionally identified as “Kiwi battlers” – the predominantly working families on low to middle incomes – benefited the most, their income increases clearly outstripping those of the very poorest.

This is all, on one level, very predictable. We already knew that Ardern intended to govern for the centre, taking a cautious path towards social progress with her eyes firmly focused on a third term. So she’s looking after the middle. The very poorest? Not so much.

In the pragmatic world of elections, which are won and lost in the centre, it’s not always a bad approach. But it raises major moral questions – and some political ones, too.

Ardern has staked a lot on tackling child poverty, but many of her targets there are relative ones – that is, they measure how much income poor families have compared to the typical household, and therefore require incomes to increase more rapidly for the former than the latter. If current trends continue, Ardern will struggle to hit those targets, creating some awkward political problems, to put it mildly.

All this, of course, is based on data from before the economic pain of the last 12 months, which – although widely spread – seems to have been visited most on those who were already most vulnerable. Against that, though, the incomes of the very poorest New Zealanders, being made up mostly of benefits, are often fixed, and may actually have held up better than those of middle-income households affected by job losses.

We won’t know exactly how all that has washed out until the next data release in a year’s time. But there is nothing in this data to suggest that, pre-lockdown, the prime minister was barnstorming her way towards a brighter, less poverty-ridden future.

The second, equally predictable problem for Ardern concerns housing. In the new data, the share of family income taken up by housing costs, 20.8%, was unchanged from 2019 to 2020. But that implies that the 3.9% increase in the average family’s income was almost exactly matched by an increase in housing costs – as indeed it was, the precise figure coming in at 3.8%.

Ardern could argue that, despite the “crisis” rhetoric, housing costs didn’t actually outpace incomes in that year. But the point that will stick in most people’s minds is that, on average, any increases in income are being matched by housing cost increases (although the former start from a higher base, so in dollar terms people do have more left over).

And generally the housing stats are horrific. One in six New Zealanders spends more than 40% of their income on housing. Renters are twice as likely as homeowners to be in that unfortunate category. In the poorest fifth of the country, nearly one-third of people face that situation, as opposed to just 3% of people in the richest fifth.

Bright spots in the data are few and far between. Because the income increases were weighted more towards the middle than the top, inequality, as measured by the Gini coefficient, fell slightly, from 32.7 to 32.0. Wellingtonians, meanwhile, got the country’s biggest income boost, recording an increase of 9.6% even after housing costs. If the city is dying, it’s dying fatly (as Donald Trump would probably put it).

Mostly, though, the data will make difficult reading for Ardern and her ministers. In the coming years, they will be quick to point to coronavirus as an impediment to social progress. What this data shows is that, even before the virus hove into view, they weren’t doing a splendid job.

What do New Zealanders think about inequality?

I’ve been reviewing the evidence on New Zealanders’ views about economic inequality. I’ll publish a full report in time, but for the moment, here are some initial conclusions.

·       Concern about inequality, belief that it has increased, and belief that it damages society are all at high (70-80%) levels (UMR, 2014). People want a much more equal wealth distribution

·       Certain policy proposals (higher taxes on the very rich, minimum wage rises) are popular. There is also a view, in some surveys, that high earners are significantly overpaid. People also feel the rich should be more grateful for the social support they receive. However, these proposals are “popular” only in an abstract sense. People say they want/are open to these things – but this support may decrease when other factors are introduced.

·       Belief that inequality overall should be tackled, however, can be muted by the ‘middle’ effect: everyone thinks they are average, and that “those in the middle” are having an especially hard time in New Zealand today. Tackling inequality would thus mean raising the undeserving poor above them. This sentiment – “I want more equality, but not if it harms me personally” – leads to political caution in addressing inequality. Louise Humpage’s work shows that while many people say they want a more equal distribution, they are often unsure or confused as to how this might be achieved (or whether it is possible).

·       Also muting the desire to tackle inequality is the familiar moral worldview that rich and poor deserve their station. In particular, people think the poor are lazy. This view would lead to a belief that even if inequality exists and is damaging, it may be inevitable.

·       Blame for child poverty is often put on bad parents (40%) (CPAG, 2014). Even the structural explanation (40%) is about jobs, etc – not government action directly.

·       People continue to believe that opportunities are open to all or most New Zealanders, even if they understand that life is tough for poor children. They also tend to think that inequalities resulting from skill, effort, etc, are more valuable than greater equality.

·       People’s views about government are mixed. Many surveys show falling or low support for the idea that it should tackle inequality, though that support has increased in recent years.

·       If people are sceptical that politicians are competent, or that policy mechanisms will be effective, this may reduce support for tackling inequality. A strong belief in market logic may be having the same effect. In Peter Skilling’s 2014 focus groups, even people who strongly supported a more equal distribution of earnings seemed persuaded by the argument that “it’s just not possible” because of the unchangeable laws of the market.

·       There is a strong view that people who are poor need to take more responsibility.

·       Related to this, the idea that inequality is a result of society being “unfair” has fallen to very low levels. This is in keeping with what social psychologists have termed “system justification theory”: the finding that people are loathe to accept that the (economic-political) systems that they live within are fundamentally unfair.

·       People do not feel they have much in common at all with the poor/beneficiaries.

New Wealth Inequality Statistics

Today we are releasing the second tranche of our wealth inequality data in conjunction with Statistics New Zealand.

The data, available at this link, give details of wealth inequality thresholds – that is, the boundaries between wealth deciles (and in some cases percentiles) by both individual and household.

Other tabs in the same spreadsheet provides details about the overall make up of wealth by asset class.