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'UK riots wake-up call for New Zealand'

'UK riots wake-up call for New Zealand'

Gareth Morgan and Susan Guthrie have authored a book called The Big Kahuna that proposes a single tax rate on all income, including from capital, and a Universal Basic Income for all.

By Susan Guthrie and Gareth Morgan

Last week the British division of Unicef released a report on child wellbeing that put some of the blame for the street riots down to disenfranchised or alienated children of middle class families.

Unicef UK said the obsession with consumer goods was one of the underlying causes of the riots and widespread looting that gripped the UK last month, as teenagers targeted shops for designer clothes and goods.

The Unicef study compared indicators of the quality of family life in the UK, Spain and Sweden and the results showed that by comparison families in the UK are trapped in a "materialistic culture" that produces a low quality of life for their children.

"Consumer culture in the UK contrasts starkly with Sweden and Spain, where family time is prioritised, children and families are under less pressure to own material goods and children have greater access to activities out of the home," the report said.

"The UK's materialistic culture embeds inequality in our society, affects family time and relationships, and has a negative impact on children's wellbeing."

As the gap between the rich and poor widens, the sense of relative hardship of those "falling behind" increases (it is inevitable that some will make more rapid progress in the race for material wealth than others), and they feel pressure to somehow accelerate their efforts - at the expense of their family and community.

It is a telling indictment that income inequality in the UK is higher than for most developed countries - it (and New Zealand) ranked 23rd out of 30 industrialised countries in a 2008 OECD study (only Italy, Poland, the US, Portugal, Turkey and Mexico were worse).

The omens for New Zealand are clear. In our book The Big Kahuna we noted that our tax and transfer regime has veered a long way from its original intent, which was to effect a redistribution of income and guarantee that everybody could live in dignity - something we sign up to in the treaties we're party to, and acknowledge as an inalienable right.

Without explicit recognition in our tax and transfer policies that in many cases time is better spent in unpaid work, in activity outside the labour market - time with our kids, with our elderly and with our wider community, in creative and active pursuits - the alienation that has gripped the UK is increasingly a threat to our own social cohesion.

Policymaker paralysis is evident in New Zealand on these issues. Right now the Government's "welfare reform" consists of stepping up efforts to coerce people without paid work into paying jobs, denigrating unpaid activity and reducing further the status of these folk in the process.

We have a tax system that is riddled with loopholes that the well-off have exploited for so long we now have an entrenched view that not paying tax is our fundamental human right. (How sick is that?)

And we have a transfer regime we call a "welfare" system that badly attempts to identify those who need help, traps them in poverty when they do receive help, and stigmatises them to such a degree they become a sub-class of society. In short we have all the ills that the UK is rueing.

It's clear what is needed: a radical overhaul of the tax system under which the return from wealth is taxed effectively - cash income and non-cash returns alike.

Only this can ensure that we redistribute effectively and equitably. And we need a system of redistribution that gives to each adult the means to live in dignity in the absence of paid work, delivering to all the freedom to find a balance between paid and unpaid activity, while ensuring that all those who do seek paid work get rewarded for their efforts.

And despite the sceptics trapped by their resistance to change, this sort of policy is feasible and affordable.

Of course, such a transformation will involve a battle against entrenched privilege and prejudice which is rampant. For example a recent report prepared for the Child Poverty Action Group by medical professionals and other experts on children's policy, documented in detail how the lives of many children are marred by significant material deprivation that "compromises their health, education and future".

We're not talking about the disappointment of not getting the latest iPhone here, but Third World preventable medical conditions, malnutrition and other horrors - so very serious instances of deprivation.

One editorial response in a Wellington newspaper to this professional piece of work was enough to make you cringe but sadly is a typical response from those who have obtained their own material status, and recite nauseatingly the stereotype of those who lag behind on that measure: "Money redirected to one group must be taken from another."

So entrenched now has the religion of individual gain become it seems that any sense of collective betterment is dismissed as impossible. In fact with effective redistribution we can all win with a healthier, more inclusive society.

The editorial continues: "New Zealanders rightly take pride in a welfare system that acts as a safety net for those who fall on hard times."

As our book points out in detail the fact is our transfer regime fails as a system on all of the academic measures applied to assess such regimes and any "pride" we may have in it is misplaced. The editorial's rallying call for pride in our targeted welfare regime couldn't be based on less evidence. It is pure dogma.

"[The action group's] members appear to believe that choosing to live on a benefit is just as valid a choice as choosing to work for a living."

Work and activity that is done outside the marketplace as the Unicef study showed, it is of enormous value to society.

Our society would collapse without that unpaid work. Rather than pursuing material wealth ad nauseam we need, at the policy level, to adopt a fuller conception of national wealth and design policies to maximise that.

Newspaper editorials such as this reflect woeful but common ignorance of our society's ills.

The Unicef study found that parents in the UK work long hours (sometimes in multiple low-paid jobs), are unable to spend adequate time with their children, shower them with gadgets and branded consumer goods by way of compensation (yet the research showed the children valued these less than time spent with their families) and provide less clearly defined boundaries and expectations for their children.

By the time they reach secondary school, many children in the UK have begun to withdraw from the sporting and creative pursuits they value. The seeds of antisocial and community-destructive behaviour begin to flourish.

So long as compulsive consumerism bewitches us as the epitome of success it seems that no income is high enough. It is not a sustainable path.

The tax and transfer system has a lot to answer for here by ascribing no value to anyone who is not in the paid workforce. When raising children is not as valuable to our society as stacking shelves at Pak'nSave then the seeds of alienation of significant tracts of society are sewn.


- Gareth Morgan and Susan Guthrie are authors of The Big Kahuna - Turning Tax and Welfare in New Zealand on its Head - published recently.
This item was first published in the NZ Herald.

Here is the link to Part 1 in this series, and to Part 2 in the series.

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Gareth does not understand the issues surrounding income inequality, and what he promotes as the 'fair society' is actually the authoritarian society - he needs to read some dystopia literature to see where it all ends up (which is badly, everytime). In the meantime, foul hooking the Big KaTuna (with end link to 'income inequality and the supposed fair society).

Oh, the Looter's Prayer (a common email doing the rounds):

Our Father,
who art in prison,
my mum knows not his name,
thy riots come,
read it in "The Sun",
in Birmingham, as it is in London.
Give us this day our welfare bread.
And forgive us our looting,
as we are happy to loot those who defend stuff against us.
Lead us not into employment,
but deliver us free housing,
for thine is the Facebook,
the Blackberry & the Twitter,
forever and ever.

It's not surprising at all that a  corrupt and bankrupt international body like the UN is taking this stance trying to blame lawlessness and a lack of basic values on income inequality and "alienation".

The other day one of these UN types was at Dale Farm defending the so called trevellers,another bunch of benefit bludgers.

In fact UN staff are now mostly benefit bludgers themselves.Diplomatic passports and huge salaries running round the world doing the square root of nothing about real problems.Go to Somalia and deal with income inequality there or in North Korea or alienation in Congo for goodness sake!

The UK and all western democracies spend a fortune on education in an attempt to create equal opportunities. These children and their families refuse to embrace the opportunities that are afforded them . Instead it's hands out all the time for more and more from the long suffering working middle classes and when there's a whiff of resistance to this entitlism that welfare has become they scream "racism,discrimination and watch out we'll burn down your houses".

In New Zealand you're more likely to see a riot by drunk,stoned,wealthy tertiary students in Dunedin  after a party than anything to do with "income inequality and alienation'.

The riots in Britain were also to do with organised drug trafficking gangs that control estates because the British political class is so enamoured by multiculturalism and "divrsity" that the police are fearful of their own shadow when dealing with crime that has a race aspect to it. So when the riots started all kinds of people joined in,that's inevitable.That's why riots should be suppressed quickly so they don't get out of control.

Nah  O Kahuna pc brigade - keep it simple , no excuses for lawlessness please -   the stupid EU rules UK is bound by meant the Pommie Cops were too scared to even use water cannon.A couple of rubber bullets and it would have been over in 5 minutes

No, it wouldn't.  Using plastic bullets and water cannons would have made things much, much worse.  

I was in UK at the time.   Yes, it dominated the news for about 4 days but control was re-asserted by the Police and local communities acted pretty quickly.  Several thousand people were identified and prosecuted.  The courts opened up 24/7 to deal with them all.     There was no revolution going on, no collective "crie de coeur" from the disenfranchised - it was just opportunistic looting.   No sympathy from the general public.  They broke the law and they are now doing time.   And we move on. 

To quote a famous book, the only way to get someone to do something is to make them want to do it.

So yes we can wield the big stick of taxation to enforce equality, or try the opposite tactic and enlist their co-operation to do so. Surely the second way is better because it does not cause resentment.

When it becomes socially unacceptable to hoard excessive wealth and the surplus is willingly given away then we can be confident we are moving toward a more cohesive society.

It is interesting to note that the Scandinavian countries are amongst the happiest and most equitable, but also have the highest tax rates. I think this stem from at more mature and balanced outlook on life, instead of the greed that pervades ours.

So guys above - if these come here - just kill the bastards - that's what you are saying....?!?!?

Rubber bullets initially

but hey,what would you like our cops to do if louts head for your 50 year old business and start smashing and looting ?

You'd say "Darwin was right, and bother, I wasn't the fittest. Somehow I though you could replace 'fittest' with 'most arrogant', but I guess the real (biology) trumps the artificial (finance). Pity I backed the wrong horse - seems you can't sustain exponential growth without repercussions after all".

That's presuming the ability to think.

??? ????    its about riots in UK  pdk  -    might pay to stick to Peak Oil

Riots which most commenting did not see live & know little about. The police stood down ,the reasons are debatable. During the so called student riots last year the police were all over it immediately, why & what did they see the difference being? A decade of living in london means you see the deterioration of society, and it's not that much different in Nz.
I sincerely hope we don't see this in Nz, but frankly the foundations have been layed , and on current political, social , financial course , you may even see the middle class taking to the streets as they realize they are in fact working class at best, and in fact realize that's what they always were.
Inequality across the rigged systems will lead to bad things. Humanity is facing some crucial questions and most need to take a serious look at their contribution.

Hmm The UK youth riots..just an over grown version of the Queen street riots a few years ago here...

Got to love the short memories.....

I was wondering why this poorly written editorial clearly demonstrates no understanding of the riots in the UK. Then I realised, it is under an attention grabbing headline, to attract readers to an unashamedly transparent promotion of the author's new book. What a crock!

Yes, and the UK riots them-self a simple funeral demonstration easily put out if the police weren't under the threat of having 6,000 police jobs on the axe with austerity measures.

Why though do the bankers that caused austerity and the current global financial crises walk the streets of London when petty UK criminals are being put to the sword for a couple of nights antics - it seems backwards.

Personally I wouldn't put it passed the British police to orchestrate the riots to divert attention from their embarrassment at the hand of the investigation into the News of the World controversy and justify their position in the face of austerity cuts. They have a history of inserting agent provocateurs within protest groups who's role is to incite violence to tarnish the image of political activist groups.

Its hardly atypical for completely disporportionate judicial sactions to be applied to criminals of humble backgrounds when the wealthy perpetrators of similar crimes get away scot free.

The evening had ended with a pot being sent crashing through a restaurant window – sending some of the revellers, including Johnson, the future mayor of London, scurrying for safety while their less fortunate friends earned themselves a night in the cells at Cowley police station. 

The law locks up the hapless felon
who steals the goose from off the common,
but lets the greater felon loose
who steals the common from the goose. 

The law demands that we atone
When we take things we do not own
But leaves the lords and ladies fine
Who take things that are yours and mine. 


Why don't you put your money where your mouth is Mr Morgan?


Run for parliament  and reform us - you'd get my vote.

So logical. The only way his big kahuna will get legs. The Big Kahuna Party.

He talks the talk , but can he walk the walk ?

... meebee GM hasn't got such Big Kahunas after all ...

Morgan is becoming an attention-seeking twit, he doesn't seem to be able to contain himself anymore, he feels a need to be noticed.

Dr Gareth Morgan, and Dr Alan Bollard, and Dr Donald Brash all have the same pedigree, standardbred breeding, out of Treasury sired by RBNZ. Or is it out of RBNZ sired by Treasury.

Don't know if they're all of the same economic mindset - but I suspect they all do agree that the reality is we're broke (socially and fiscally, along with most of the rest of the world), and more to the point, the rest-of-the-world isn't gonna solve either side of the deficit for us.




Morgan isn't stupid, but you can write him off by reading P17 of Poles Apart.

No peer review, just a weak ideological rant.

He probably knows things are in perma-trouble, but he needs to believe. At the end of the day, he'll be more use when TSHTF, than a lot  of the old-way commentators here.

The Metropolitan Police were made to look stupid, disorganised and weak by yobs who used their mobile-phones to organise gangs to hit street after street of shops often returning to premises already hit while police were milling around wondering where they had gone.  This had nothing to do with a poor underclass getting their own back on society, but a well organised attack on shops that sold designer clothing, hi fi's and phones. Setting fire to businesses after they had been rifled was an act of gross barbarity and we were lucky no-one was burnt alive when the fire engines were prevented from reaching the blaze.