NZ POLITICS DAILY: The Right wing fightback on inequality

Bryce Edwards

The political left has been successful in putting economic inequality firmly onto the public agenda and making it a key election-year issue. But that doesn’t mean the issue is ‘owned by the left’, nor does it mean that the debate is going to be won by the left. The political right is now fighting back strongly on inequality and related issues. Not only is the National Government launching initiatives that claim to target inequality, but rightwing columnists and bloggers are now putting forward rebuttals to the leftist agenda on issues of poverty, the living wage, the minimum wage, welfare and higher taxes. 

The most audacious rightwing opinion piece published recently is Damien Grant’s Herald column from yesterday, Go softer on tax cheats – they are society's contributors. He makes the case for greater veneration of the wealthy – including those who cheat on tax – and for an appreciation that the rich contribute more to society than the poor. 

The response has been strong on Twitter – see my blogpost, Top tweets about Damien Grant’s defence of tax cheats. For a considered leftwing response, see Greg Presland’s blogpost Damien Grant thinks tax fraudsters are more worthy than beneficiary fraudsters

Arguments about the extent of inequality

Who’s to blame for inequality? To determine whether the current Government is guilty of increasing the gap between rich and poor, it first needs to be established whether or not inequality is worsening. Until now, the political left has been winning that argument based on the widespread assumption that inequality is indeed increasing. John Key has recently been fighting back on this, asserting that the Opposition is ‘constantly trying to make the case that inequality is widening, when in fact the official stats don't support that’. Similarly, Radio New Zealand reports the Minister of Finance saying that ‘income inequality is the same under National as it was under the previous Labour-led Government’ – see: English rejects claims inequality worse

So, who’s right? Labour or National? For the best account of measuring and evaluating inequality, see Pattrick Smellie’s article Gap between rich and poor a muddy margin. This is a very good short history of inequality in New Zealand (largely based on Brian Easton’s Economic inequality in New Zealand: A user’s guide). See also Adam Bennett’s Disputed statistics on income inequality.

Statistician and blogger, Andrew Chen, has also gone through the official information to look at the competing political claims about inequality. His glum conclusion is this: ‘Income Inequality is stable in the long-run. It has not significantly improved or worsened in the long-term, and that is unlikely to change. The National-led Government can't claim a victory here. The Labour-led Opposition can't claim a victory here either. Everyone loses’ – see:  Income Inequality – Better or Worse? See also, David Farrar’s Mitchell on income inequality

For a practical snapshot of the state of inequality in New Zealand, Martyn Bradbury has reproduced a very interesting chart titled ‘How much money do they really earn?’, which compares the incomes of some key occupations against the minimum wage. Backbench MPs are said to earn five times the minimum wage, while the CEO of ANZ apparently earns 146 times the minimum wage – see: This is what inequality looks like in NZ – beneficiaries vs CEOs

Minimum and Living Wages as a solution for poverty

Using the minimum wage as a solution to poverty is currently being debated internationally, after US President Barack Obama proposed giving the wage rate a significant boost. As always, there are warnings that increases will create ‘disemployment’ – see Eric Crampton’s blogpost, Minimum Wages.

The minimum wage debate could get tricky for the Labour Party, too. Labour has for quite a while differentiated itself from National over its support for a much higher minimum wage. But the Government is due to announce an increase that will see the minimum wage rise to perhaps more than $14 an hour. This leaves Labour’s promise of a $15 minimum wage looking decidedly less radical and different. The problem is that Labour doesn’t have a policy of inflation-adjusting its manifesto promises, and the party has been promising a $15 wage for four years now. Graeme Edgeler (@GraemeEdgeler) has calculated that, based on current trajectories, if National is re-elected this year, it will also implement a $15 minimum wage, like Labour. For more on this see Tova O’Brien’s Minimum wage hike puts pressure on Labour and Briar Marbeck’s Minimum wage debate: $14 an hour 'not fair'

So, although it might seem that the political parties are worlds apart on issues of inequality, a closer look shows that there are increasing similarities. This is a point well made by the latest Listener editorial, Here’s lookin’ at you, kid. The key part is this: ‘The reality is that left and right are for the first time dangerously close to a new consensus on the key needs of children. Whoever is elected next, paid parental leave will become more generous. Failing schools will get more attention, with more status and pay for some teachers and principals. Families with children will continue to have their incomes supported through tax credits. Rental housing will be subject to stricter health-related criteria. And our most vulnerable children will get extra support, such as free child care’.

At the local government level, there’s been a burst of enthusiasm for introducing the so-called Living Wage of $18.40. The latest authority to consider this is the Christchurch City Council – see Lois Cairns’ Council considers Living Wage. For objections to this, see The Press editorial Complexities of a living wage, and David Farrar’s Will Christchurch City Council join the stupidity?

Debates against increasing taxation

With income redistribution being pushed by the left as a mechanism to combat economic inequality, many on the right are attempting to discredit such arguments. For the most hardline argument against increased taxation, see Rodney Hide’s column Greed behind tax threats

The efficiency and effectiveness of taxation is also being questioned by members of New Zealand’s elite. For example, according to Radio New Zealand, ‘Dame Rosie Horton says increasing the rate on the wealthy to provide services for lower income New Zealanders would just discourage hard work’ – see: Philanthropist dismisses 'rich tax'

David Farrar has also lampooned some of the arguments for higher taxes on corporates, pointing to flaws in leftwing arguments that focus on corporate revenues instead of profits – see: Let’s call it a living tax campaign!

There is no doubt that the introduction of a capital gains tax will be a major topic of election debate this year and Geof Nightingale makes a useful contribution to the debate in his opinion piece, We need a capital gains tax – or do we?

Welfare and poverty

We might also expect to see an increased focus from the political right on state welfare in relation to inequality. The most recent example of this sort of critique is Karl du Fresne’s Benefit meant for downtrodden, not to fund lifestyle choices

But are beneficiaries really to blame? Leftwing unionist Mike Treen argues that recent Labour and National governments have ‘punitively’ kept genuinely unemployed people off benefits, which both increases inequality and reduces the official statistics on unemployment – see: Billions of dollars stolen from the unemployed. This argument is also well conveyed in Matt McCarten’s column Rose-tinted view cruel fairy tales

Who should pay for inequality? 

Satirist and social commentator Dave Armstrong, has written his weekly newspaper column on a subject that – on the surface – appears to be yet another condemnation of public holiday café surcharges, but it actually goes much deeper than that – see: No justification for coffee surcharges. Armstrong argues that ‘our low-wage economy’ is the problem, and that the state gives huge hand-outs to the rich with its various welfare provisions that effectively subsidise the cost of labour for businesses. This is his argument: ‘The Government also subsidises employers to take on low-paid workers, who also get Working for Families and other forms of welfare.  This indirectly makes businesses that pay the minimum wage one of New Zealand’s biggest welfare recipients.  If the Government stopped subsidising low-paid workers, I suspect there would strikes in every cafe, hospital, old folks’ home and cleaning company in the country’.

This leads on to today’s must-read item about inequality, welfare and taxation – Colin Espiner’s Scrap Working for Families, raise wages. Espiner surveys many of the issues relating to minimum wages, living wages, welfare and inequality, and comes up with the radical solution of shifting the responsibility for eradicating poverty from the state to the private sector, who he says needs to pay higher wages without state subsidies.

Finally, for a more in-depth discussion of the issues of inequality and its putative solutions, you can listen to Radio New Zealand’s very good 27-minute Insight programme from yesterday: Does the Rich-Poor Divide Matter?

Today’s links

NZ-Australia relations

Herald: Editorial: Competitive answer to 'buy Aussie' campaign

The Press: Aussie move a trade decision

Tracy Watkins (Stuff): A couple of true-blue trans-Tasman cobbers

Barry Soper (Newstalk ZB): Political Report: The Mad Monk and the press

Clare Curran (Red Alert): John Key’s new BFF over-reaches in his attack on the ABC

Fran O'Sullivan (Herald): Australasian love-in but rocky marriage

Michael Cummings (Stuff): Denial of services taxes have paid for

The Press: We don't know how lucky we are, mate

Rachel Smalley (Newstalk ZB): Key has the upper hand when negotiating with Australia

Greg Ansley (Herald): Key 'not overly hopeful' about talks with Abbott

Newswire: Key seeks better deal for expats in Australia

Corin Dann (TVNZ): Food lockout: Kiwi exporters told to approach watchdog

Tracy Watkins (Stuff): Australia agrees loan deal for Kiwi expats' kids

Newswire: Australia, NZ background checks expanded

Kurt Bayer (Herald): Australia and NZ to share crime files

Greg Presland (The Standard): How to replace Tony Abbott with cats

Greg Presland (The Standard): Play it again John

Tracy Watkins (Stuff): Key tiptoes around Aussie rules

Tracy Watkins (Stuff): Kiwis 'guest workers' in Australia - Key

Amy Maas (Stuff): Social media calls for supermarket boycott

Tracy Watkins (Stuff): Australians keen to share policies - but not welfare - with Kiwis

Southland Times: Editorial: Sometimes 'closer' still misses

Tess McClure (Stuff): Kiwis don't buy Aussie campaign

Greg Ansley and Isaac Davison (Herald): Australian patriotism alarms NZ exporters

Newswire: Abbott finds a 'soul mate' in Key

The Press: Editorial – We don't know how lucky we are, mate

Hamish McConnochie (NBR): Australia's two-class migrant policy defies liberal tradition

Newswire: Companies not impressed with Sydney talks

Martyn Bradbury (Daily Blog): Key will attack Maori, beneficiaries & environmentalists but not Australia for how they treat Kiwis

John Minto (Daily Blog): Stop whinging New Zealand…time to plan a more self-reliant economy

Stuff: New Zealand invited to G20 meetings



Radio NZ: Appeal to NZ PM to defend human rights over Nauru

Newswire: Greens add to the pressure on John Key

RadioLIVE: Nauru government demands apology

Radio NZ: Nauru angered at MP's remarks

Cameron Slater (Whaleoil): Green Party and Jan Logie accused of “a culture of international bullying, arrogance and racism”


Taxation, the economy and Inequality

ODT: Children caught in the crossfire

Matt Nolan (TVHE): A couple of recent NZ posts on inequality and poverty

The Press: Editorial: Complexities of a living wage

Newswire: Youth minimum wage a failure, Labour says

Alliance: Sorry Mr Farrar, We Disagree

Rob Slamond (Polity): I made a mistake

Brennan McDonald: Census Data And Tyler Cowen’s Average Is Over

Colin Espiner (Stuff): Scrap Working for Families, raise wages

Rodney Hide (Herald): Greed behind tax threats

Damien Grant (Herald): Go softer on tax cheats - they are society's contributors

Martin Hawes (Stuff): Please sir can I have some more pay?

David Farrar (Kiwiblog): Let’s call it a living tax campaign!

Radio NZ: Philanthropist dismisses 'rich tax'

Martyn Bradbury (Daily Blog): This is what inequality looks like in NZ – beneficiaries vs CEOs

Greg Presland (The Standard): Damien Grant thinks tax fraudsters are more worthy than beneficiary fraudsters

Cameron Slater (Whaleoil): Let’s have a living tax on companies

Rob Salmond (Polity): Finally, a public voice for tax evaders


2014 Election

John Armstrong (Herald): Rotten smell rising from one-seat threshold

Newswire: National regains lead in latest poll

Martyn Bradbury (Daily Blog): The 2014 Election date and the possibility of a snap election

Danyl McLauchlan (Dim-Post): Scenario

Pete George (Your NZ): Danyl’s diddled polling

Mike Smith (The Stnadard): Key’s transparent gerrymander

David Farrar (Kiwiblog): The election date

Pete George (Your NZ): Poll ‘margin of error’ explained

John Sargeant (Stuff): Peters is looking like power broker

Ross Henderson (Stuff): Election year histrionics begin

Chris Trotter (Stuff): Politicians and journos could learn from Peters


Big Gay Out

Marika Hill (Stuff): Pride and politicking at Big Gay Out

Brook Sabin (TV3): Politicians join the party at the Big Gay Out

Radio NZ: Thousands attend Big Gay Out

Lincoln Tan (Herald): MPs throng to Big Gay Out

Stuff: MPs hunt for pink vote at gay festival


Waitangi Day and Maori politics

Taranaki Daily News: The Treaty may be a true compact between people

Tahu Potiki (Stuff): Message of Waitangi Day often lost

Martin van Beynen (Stuff): Guilt, sadness but still a celebration

Radio NZ: Voters leaving Maori Party – Harawira

John Roughan (Herald): Some things worth waiting for

Kerre McIvor (Herald): Stoushes part of the story

Michael Southey (Stuff): Waitangi Day 'a sham'

Catherine Delahunty (Frogblog): The strength of Waitangi Day

No Right Turn: The racist Herald

Pete George (Your NZ): Too much Waitangi in Waitangi Day


Ngaphui settlement

Herald: Editorial: Ngapuhi Treaty deal would lift all of Northland

Matt McCarten (Herald): Iwi leaders risk losing touch

Brendan Manning (Herald): Finlayson: Settlement invitation with Ngapuhi not a 'cash offer'

Newswire: Government dismisses $600 million Ngapuhi deal

David Farrar (Kiwiblog): Finlayson on Treaty settlements

Pete George (Your NZ): Harawira’s conflicting Treaty of Waitangi and socialist ambitions

Pete George (Your NZ): Kiwiblog redneckery

Cameron Slater (Whaleoil): All about votes? Rubbish, It’ll cost votes


Len Brown

Bernard Orsman (Herald): Cost of Mayor Brown report reaches $250k

Bernard Orsman (Herald): Leaders mum on $250k bill into Len Brown affair

Herald: Mayor Brown to pay $40k towards review into affair

Stuff: Brown pays $40K towards review

Newswire: Brown paying $40,000 'out of respect'

Radio NZ: Mayor's payment 'sets precedent'

Lincoln Tan (Herald): Mayor's ex-lover wants to reclaim old job on advisory panel

John Weekes (Herald): Palino silent on scandal

The Standard: A glorious waste of money for the titillation of perverts


Labour Party

Stuff: MP opens up about her drug addiction

Herald: Darien Fenton: 'It's a miracle I survived'

Matthew Hooton (NBR): David Cunliffe’s struggle with the truth

Patrick Leyland (Progress Report): Manukau East



Michele Hewitson (Herald):Interview: Jamie Whyte

Ellipsister: Observations on Jamie Whyte and the ACT Party

MTNZ: Media Skills of new leader vital for ACT hopes



David Farrar (Kiwiblog): Told you the Greens would adopt them as policy

Pete George (Your NZ): The Green ban list


Offshore oil and gas

Bruce Munro (ODT): Oil's not well

TVNZ: Otago oil drilling protesters set sail

Pete George (Your NZ): The protests and the drilling go on

TVNZ: Oil drilling protesters to Anadarko: 'This fight is not over'

Andrea Vance (Stuff): Oceans of rhetoric over conservation


Metiria Turei

Michele A’Court (Stuff): MPs can speak for those who look like them

Gordon Campbell (Stuff): The subtle art of political diversion

Bryce Edwards (Liberation): Playing the race, class and gender card (about Green clothes)

John Moore (Liberation): The Elite politician that cried racism

Steven Cowan (Against the Current): Full Fashion Jacket



Bryan Leyland (Stuff): Structure of the market drives power prices up

Chris Trotter (Daily Blog): Ideas Matter: Geoff Bertram Rattles the Neoliberal Cage



James Ihaka (Herald): ACC claim tops $1 million

Rob Stock (Stuff): Few trust ACC: report



Sarah-Jane O’Connor (Stuff): Scientists back plan to boost 1080 drops

David Farrar (Kiwiblog): 1080

Nick Smith (Stuff): 1080 necessary in the battle for native birds


Sugary drinks

Jono Hutchison (TV3): Campaign to ban sugary fizzy drinks by 2025

Marika Hill (Stuff): Is sugar fuelling obesity in NZ?



Martyn Bradbury (Daily Blog): The Snowden NZ leaks – why we need to pull out of the 5 eyes

The Standard: 5 Eyes’ cyberwarfare: Snowden


Bob McCoskrie

Heather McCracken (Herald): McCoskrie resigns as marriage celebrant

Pete George (Your NZ): McCoskrie’s broken marriage

Bob McCoskrie (McBlog): I’ve resigned… As a marriage celebrant



John Drinnan (Herald): Foodie show a slow cooker

Matthew Beveridge: In depth discussion?

Cameron Slater (Whaleoil): The changing face of media freedoms

Ele Ludemann (Homepaddock): New blogs



Stuff: Today in Politics, February 10

Dave Armstrong (Dominion Post): No justification for coffee surcharges

Mathew Dearnaley (Herald): Mayor's $250m offer to PM

Taranaki Daily News: Census gives campaign a little puff

Newswire: Whalers in NZ waters 'disrespectful'

Steve Braunias (Stuff): The secret diary of . . . Kim Dotcom

Michael Timmins (Daily Blog): “New Zealand’s values” and Foreign Policy

Amy Jackman (Stuff): Significant street full of history

Stuff: Group targets Timaru for white recruits

Dita De Boni (Herald): The myth of pure meritocracy

Juliet Thomborson (ISO): Engineers and Servos Ponder Mega-Merger Union

Idealog: Michael Smythe floats abstract koru flag design

Newswire: Survey: Kiwis fourth biggest gamblers in the world


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