NZ POLITICS DAILY: Anger and debate over inequality

Are you angry about the widening gap between rich and poor? Or are you sceptical about the stats? Either way, rising concerns about inequality could fuel radicalism in New Zealand politics.

Anger and concern about economic inequality has been building up in New Zealand over the last few years. This has, of course, been happening all over the world since the global financial crisis, and is widely recognised as a key aspect in the rise of radicalism and populism everywhere. Hence, last week, political scientist Jennifer Lees-Marshment said that the growth of inequality was fuelling discontent with politicians and the status quo. She said people “like the idea of a man standing up and talking about threatening the system, changing the system and going in and sorting it out”, and that could happen here – see Newshub’s Expert warns inequality could breed NZ's own Donald Trump.

In the Weekend Herald, Lizzie Marvelly also wrote about how anger might potentially fuel the rise of political radicalism in this country: “There will be a group of landowners that sees no problem with the status quo. To them I'd like to mention two terrifying phenomena: Brexit and Donald Trump. While we comfort ourselves imagining that both Brexit and Trump's ascension happened in countries vastly different to ours, we are missing the signs in our own society of deep social unrest. Disenfranchised renters may be apathetic and depressed at the moment, but it wouldn't take much for a demagogue promising to "make New Zealand great again", or simply to give them a fair wage and a realistic pathway to home ownership to amass a horde of impassioned supporters” – see: Save the Kiwi dream before it's too late.

Marvelly sees the outcome of the anger over inequality as leading to a very negative politics – especially the risk of it spawning political scapegoats such as some aspects of the debate over immigration. Therefore, she suggests that we “acknowledge and address the unrest and dissent emerging in our communities before it mutates into a Trump-like situation. We need to save the Kiwi dream before it's too late.”

Inequality anger focused on immigration

Economist Shamubeel Eaqub also sees the growing debate about immigration as a proxy for anger produced by economic changes. He argued last week that political polarisation is growing because this growing inequality “provides the visible catalyst. Much like the vote for Brexit, or support for Trump, society is polarised across different divides: young vs old; urban vs rural; educated vs uneducated; men vs women” – see: Immigration an emotionally charged topic.

Currently the politician most likely to be able to exploit that discontent is the populist Winston Peters, and he’s proved quite capable of connecting inequality with immigration. The NBR’s Rob Hosking says: Winston’s hour is coming (paywalled) and that “The New Zealand First leader was made for these times.”

In his article, Hosking explains why the rising concern about inequality is more likely to suit a conservative populist than a leftwing populist: “Yes, inequality – in all its forms and however sloppily defined – is being discussed far more as part of the political discourse. But it is being discussed in a different way, in a way that is being subsumed by other themes. It is often discussed in almost nationalistic terms – “this is not us” or “this is not New Zealand.” You will hear similar themes overseas – usually with greater virulence and nastiness. As noted here last week, it is fashionable to describe this sentiment as a rage against the elites, and essentially xenophobic if not downright racist and, while that is there, it is not the sole aspect of it. This rage is partly driven by fear and economic pressures but it is also driven by a loss of a sense of community and of nationality. This is not the ground of socialist parties – rather, it is more the ground of traditional conservative ones.”

Awareness and politicisation of inequality

Inequality continues to be the most important political issue for the New Zealand public. The UMR 2016 Mood of the Nation report gives further evidence of this, showing that inequality and poverty is cited by 21 per cent of the public as the most important issue (compared to 15 per cent for the economy; 10 per cent for unemployment and jobs).

Such public awareness mirrors the media’s increasing use of the word inequality, with a huge rise in the number of news stories and opinion pieces about inequality since the year 2000. I have previously measured how often newspapers have been using this term, as well as many others such as: poverty, gender, feminism, capitalism, racism, and ethnicity – see: Increase in radicalism in New Zealand political/media discourse.

What this rising use of the term inequality represents is open to question. NBR editor Nevil Gibson has analysed my figures, and suggests “this radical resurgence must have some basis in real conditions and this is supplied from an unexpected source – the establishment media and its antipathy to the National-led government” – see: Reality rebuts rising radicalism (paywalled).

It’s also the topic of much research. Last week, the Bruce Jesson Foundation published the video of the recent lecture: Are we all equal in New Zealand? This is by Victoria University of Wellington’s Lisa Marriot, who looks at the following questions: “Why are those less advantaged in New Zealand society treated differently from those who are in relatively privileged positions? Why are white-collar tax evaders treated differently to welfare fraudsters?” You can also download a copy of her lecture slides.

And it’s hardly just leftwing academics and journalists focusing on the rich-poor gap. For example, last month the Herald reported a leading CEO pointing to the problem – see: Mood of the Boardroom: Inequality big problem for NZ: Air NZ chief. Likewise, the conversion of elites to the inequality agenda includes former National Party Prime Minister Jim Bolger. According to a recent column by Rob Hosking, Bolger “spoke in Christchurch last week, and among the many points he made was that long-term, wide, inequality is damaging to a society. There was a scurry of comments, mostly by academics and left-wing activists, to the effect that Mr Bolger has become a bit of a liberal in his old age” – see: Kiwi conservatism and caricatures (paywalled).

Scepticism about the assumptions on inequality

The rich are getting richer and the poor are getting poorer. Well that's the repeated message in New Zealand politics, especially from the political left. But is it really true?

Last week the New Zealand Initiative think tank released their report The Inequality paradox: Why inequality matters even though it has barely changed, which is written by Bryce Wilkinson and Jenesa Jeram. This is an important contribution to the debate and our understanding of inequality and politics.

Part of the report relates to my measurement of the media’s increased usage of the term “inequality”. The other side of the report is the contention that economic inequality is not actually worsening at the moment. And this is why it’s labelled a “paradox” by the Institute – because they believe we are increasingly talking about inequality at the very time that income inequality is not actually worsening, and is arguably even improving.

The root cause, the report contends, is the lack of affordable housing. With house and rental prices increasingly so significantly, the report argues it’s not incomes that are fuelling discontent, but housing costs – see TVNZ’s New Zealand afflicted by 'housing crisis' rather than 'inequality crisis', report finds. (Incidentally, the Ministry of Social Development recently came to a similar conclusion – see Isaac Davison’s Rising housing costs driving inequality, Govt reports show).

The think tank authors also point to other factors, including the decline of the two-parent family, and the fact that campaigners here have imported inequality rhetoric from other countries in which worsening inequality is indeed a significant problem. This is all covered very well in Rob Stock’s article, Income inequality: Is it getting worse, or isn't it?

Stock has followed this up with an article featuring more comments on the report by inequality author Max Rashbrooke – see: NZ inequality about more than just housing, anti-poverty campaigner says. In this, Rashbrooke’s own explanation for the supposed paradox is given, suggesting that contemporary concerns about inequality are a type of delayed reaction to the skyrocketing growth of inequality that happened earlier: “He said the huge rise in income inequality in the 1980s and 1990s was not just a historical event. Its social impact continued to this day, and people were increasingly recognising the damage that poverty was doing.” Rashbrooke also elaborates on his critique in the blog post, The New Zealand Initiative’s new report on inequality.

For other comments on the report, see Bryce Wilkinson’s Exposing the inequality scam (paywalled) and Gareth Morgan’s Inequality, Housing and Economic Growth – In Perspective.

So is there really a crisis of inequality, or even the likelihood of a “NZ Trump” looming? Liam Hehir thinks we should be wary of crisis-mongering, and draws attention to the “now routine overheating of political coverage”, including the increased number of crises we’re experiencing: “Looking back through the news this year, we have seen the proclamation of a manufacturing crisis, an agriculture crisis, a regional economy crisis, a trust in politicians crisis, a healthcare budget crisis, a mental health crisis, an income inequality crisis, a wealth inequality crisis, an obesity crisis, a teacher recruitment crisis, a log-supply crisis, a water crisis and a casual racism crisis” – see: No crisis here. Move along please.

And Danyl Mclauchlan ponders whether rising inequality really does lead to political instability – see: A heretical question about inequality.

Finally, ‘If you’re not angry, what kind of person are you?’ That’s what British film director Ken Loach has recently said about economic inequality in society. This is in relation to the release of his film, I, Daniel Blake, which opened a few days ago in New Zealand cinemas. It’s a harrowing tale of inequality and the plight of the working class trying to get by. The reviews in New Zealand so far are incredibly positive. For example, the Herald’s Russell Baillie gives it 4.5 stars. James Croot gives it five stars, along with Kate Rodger, who says It's unforgettable cinema and may haunt the recesses of your mind, your heart and your conscience for years”. But Shawn Moodie looks at the main character and says the film describes “a situation that is all too familiar to us here in New Zealand” where “he faces a system in which technicalities rather than compassion determine one’s fate” together with a secondary character: “a single mother who has been priced out of London (a plot point that could have easily been replicated in Auckland).” So will I, Daniel Blake resonate in New Zealand? On Twitter, Helen Lehndorf (‏@helen_lehndorf) has suggested “We should do a Crowdfunding campaign to get Ken Loach to come here & do a film about housing crisis, damp homes & food banks.”

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