Paul Barber on inequality issues, a new film, indebted Kiwis, ghettos of the rich and homeless poor, incentives and sanctions, some glimmers of hope, Dilbert and more

Paul Barber on inequality issues, a new film, indebted Kiwis, ghettos of the rich and homeless poor, incentives and sanctions, some glimmers of hope, Dilbert and more

Today's Top 10 is a guest post from Paul Barber who is a policy advisor at the New Zealand Council of Christian Social Services, which leads the Closer Together Whakatata Mai reducing inequalities campaign.

In this week’s Top Ten he looks at some of the recent developments in the debate on inequality and its impact – a new film, indebted Kiwis, ghettos of the rich and homeless poor, incentives and sanctions, and some glimmers of hope.

As always, we welcome your additions in the comment stream below or via email to david.chaston@interest.co.nz.

And if you're interested in contributing the occasional Top 10 yourself, contact gareth.vaughan@interest.co.nz.

See all previous Top 10s here.

1. Filming the Divide.
The Divide is a documentary film directed by Katherine Round about inequality inspired by the influential book The Spirit Level. It had its first showing at the [English] Sheffield Film Festival in June and it is doing the rounds of film festivals before general release later this year.

Early reviews are really positive: “The Divide is sublime - achingly so. A must see for all ages, all races and all classes" so keep an eye out for the NZ release.

2. Spending to cover the inequality gap.
Max Rashbrooke has responded to the NZ Initiative claims about inequality in New Zealand. The inconvenient truth when you talk to those affected (not Treasury or NZ Initiative analysts) is that people are running up debt or “desperate paddling to keep afloat” as people seek to get by and meet housing and consumer costs on incomes that aren’t keeping pace with rising costs. No wonder New Zealanders have high levels of debt.

3. Ghettos of the Rich.
The way the rich tend to cluster together into neighbourhoods of wealth and privilege is an important driver of inequality suggests social geographer Phillip Morrison.

He has looked at how the people who have real choice about where to live (those with higher incomes) tend to self-select themselves into neighbourhoods where housing and access to elite education offer the best ways to build and preserve their social status.

Observing the New Zealand story, he thinks these ghettos of wealth are the active force in growing inequality of income and especially wealth, whereas the poorer workers end up living where ever they can find a place and make fewer active choices.

4. Meanwhile more than 34,000 are homeless.
The other end of the housing inequalities are the around 34,000 or 3% of people in this country without any kind of adequate housing – the homeless or those in “severe housing deprivation”.

The pitiful inadequacy of the additional social housing investment proposed over the next three years compared to the geography of need is striking.

Without mentioning the obvious Auckland gaps, just down the road from us in Porirua, more than 600 people are in severe housing need and it would take probably between 200 – 300 housing units to meet this extreme need, yet the government plans to add only another 20 extra one-bedroom units to the supply of social housing in that area. Don’t imagine for one second that private landlords are queuing up to fill the remaining gap – why aren’t we doing more? Perhaps because the decision makers sit far away in their neighbourhoods of privilege…

5. New Zealand Is a low-tax Country.
New Zealand has the lowest tax on wage earners of all the 34 OECD member countries. The so-called “tax wedge” in this country is less than half the average for all OECD countries while a single earner married couple with 2 children thanks to cash transfers (i.e. Working for Families) has a net tax burden less than a sixth of the OECD average. No wonder our government keeps finding there isn’t enough money to fund public services when they bring in so little tax.

6. Incentives and Sanctions – the paradox of greed continues.
Why is it that to motivate the rich you have to give them even more money but to motivate the poor you need to take money off them? This is the perverse Victorian logic of the privileged & powerful, full of their own sense of entitlement and keen to deny entitlement to others.

“For children, the reality of a financial sanction is coming home to an empty fridge, a cold home, and going without the necessities the majority of New Zealand children take for granted.” (NZCCSS Vulnerability Report July 2015).

The latest NZCCSS Vulnerability Report documents over 80,000 people receiving welfare benefits have had those minimal incomes further slashed through the Work & Income “sanctions” regime. Among those 80,000 households are some 27,000 children who are being “incentivised” by taking money out of already limited family incomes. The reality of this “disinvestment” out of the most vulnerable families in our country makes a mockery of talk of “investing for outcomes” or “social investment”.

7. Glimmers of hope?
Lest we be accused of being purveyors of doom and gloom, we’ll finish our Top Ten with some cool ways that hope is multiplying….

The 80,000 online activists at Action Station have been helping to build pressure that has seen welfare benefits lifted for the first time in 25 years.

8. NZ leading the way?
It turns out we have something to teach the Brits when it comes to positive social change. Max Rashbrooke’s article in the Guardian tells some of the story.

9. Employers who want to pay more.
The number of living wage certified employers is growing steadily and they were celebrated recently in Hamilton, including Tuaropaki Trust, the first Māori organisation to become accredited.

10. The last word goes to….
Pope Francis ...

Today, however, we have to realize that a true ecological approach always becomes a social approach; it must integrate questions of justice in debates on the environment, so as to hear both the cry of the earth and the cry of the poor.

(Encyclical “Laudato Si” June 2015

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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22 Comments

# 5 incorrect. do your own primary research, compared to all other countries outside scandanavia in my contacts I have the largest tax burden per hour worked, per house, per loaf of bread, per liter of fuel.
It will help if you discard the "two incomes married with kids" model which only fits a narrow band of the population, too often used for focused social adjustment (creates a notch effect)

New Zealand does put an astonishingly high burden of taxation on the poorer people through relatively high GST and very high first couple of tax brackets. Compared to the Netherlands, you would pay more tax on your income earned in New Zealand if you earn below about 90k NZD pa.

NZ is having the guts ripped out of it. My diesel car is cheaper to run in the UK than NZ, food is cheaper. GST needs to come off food and children clothes etc for a starter.

Childrens clothes is a bit of a luxury (having children) but if the State is serious about addressing child poverty childrens clothes and shoes is an obvious target. (_new_ kids clothes are a bit of a luxury, all mine came from my cousins, and most of those were from older siblings or other cousins, and my younger brother had my cast offs until about 10 yrs old). Shoes were just optional all together but not so much with city/town kids since many townies don't know how to drink and dispose of glass properly.

The socialists are the one's ripping the guts out of the country!!

Handled elsewhere, and with considerably more nuance:

http://www.theatlantic.com/magazine/archive/2001/12/one-nation-slightly-...

The ultimate "Red State" is a place I think is one which few would suspect. Pretty hilarious

>>> "The last word goes to…. Pope Francis"

As someone involved in a church network trying to brand itself as "social services", you really couldn't resist that last one eh. "The last word" to that bastion of social progressiveness and rationality.

Same old stuff, incorrect identification of the problem and ineffective response pandering to blame shifters.
@#2, No mention they may be assuming debt over better assessing their finances and adjusting lifestyle to suit.
@#3, live in Naenae and Papakura for a while and you will come to how neighbourhoods differ in their liveability, if you can afford it, you move out.
.@#4, Question: How can you be homeless in a specific place? If all that is required is you cannot afford to live there, but want to, then we all are homeless somewhere. We all know homes are available, just those with preferences, which are not easily satisfied within their geographical and financial demands, declare themselves to be in hardship.
.@#6,Living in the locations mentioned above will also acquaint you with those happily accepting a low income for a life of minimal effort.
.@#9, not many on the list that don't just shovel money from grants or government funding out the door, not their money, what do they care?. Where are the real commercial enterprises?

Well surely the inequality is only bad if you are on the wrong side of it?

As for rich ghettos, I live in one myself. It really is a ghetto, with all the boring bastards I live about there is very little interesting conversation to be had. There really is nobody home with the lot of them.

No, inequality is bad for everyone, as it fosters civil unrest, crime, depression, ...
Which costs money, and some of that is passed on to the ones on the 'right' side of inequality.
.
Also, the paranoia someone might steal all your stuff can't be easy to live with
The Prozac or Xanax bill must be quite high.
.
And then there's the boredom factor, as you've just described yourself.

that inequality is the rich peoples' bad list.

the _really_ bad thing about inequality is that the poor don't have resources to do anything about it , by definition.
they can't affect the corporate or lobby votes. They can't afford to use the services the government demands citizens use for basic life choices (eg fixing plumbing, minor repair jobs, buying shacks, insulating said shacks). they can't afford alternative choices that would fix the basic choice problem (if they are in a cheap nsty house and can't afford a doctor they can't actually afford to move to the nicer house where the doctor is not necessary, inequality brings many not optional choices (like said doctor, or like big electricity bill for heating...they might not be able to purchase more clothing), training up and getting assistance training up is also priced out of reach as the top end have income to push up prices with extras (eg social services) and overheads (more staff, fancy websites,certification of inspectors).

All these things destroy the compound loopback that creates wealth and income.

The worst thing is not the unrest or crime but that that loopback ALSO affects the whole economy. It creates a drag effect that reduces _everybodies_ effectiveness, instead of having these people having worthwhile lives. Worthwhile economically. Worthwhile socially. worthwhile in itself.

DBTFA - Well you might just be correct because I can tell you if I get one more bloody Government compliance job to do unpaid into the bargain I might just start civil unrest....because some of you people have no damn idea who's doing all the work for all the redistribution that takes place!!

Are you sure it's a ghetto, sounds like parliament to me.

Physically it is stunning Cowboy, but they are too uptight to enjoy it.

Is it a lifestyle block / rural residential subdivision, scarfie?

Heck you wouldn't catch me on a rural subdivision, first thing they do these days is strip the land bare of anything interesting. Then you end up staring at neighbours. If you have caught my comments in the past, I call it smart renting. No rent increases for over six years, he can't for various reasons including that it sat empty for six months before I came along. I sit and enjoy my morning coffee (freshly ground beans) on the deck or in the living room with an uninterrupted view of the harbour, and ocean, that extends for 75kms when the air is clear enough. I get a glimpse of that view from my outdoor bath. A 200m walk to the beach for a swim. Only one neighbour, whose house I don't actually see. From my computer I watch the Wood Pigeons feed around me. When on the deck the Tuis will land at arms length in front of me to drink the food I leave them.

Paradise really, but the rich ones come along in the weekends and spend it all cleaning, gardening and mowing the lawns (I don't have any). It is all nice and civil, but in reality these people have nothing to say worth listening to.

where from comes the passive income to support such a lifestyle.
love to know as my ex gets similar from her child support, but I'm still struggling to make ends meet

Whether you wish to be smug about inequality or not, in the end something will give. Capitalism can't survive the destruction of the purchasing power of its own customers.

Interesting thoughts here. The end of capitalism?
http://www.theguardian.com/books/2015/jul/17/postcapitalism-end-of-capit...

not capitalism.

if you end capitalism are you going to replace it with what? socialist enslavement? corporate enslavement?

don't mistake corporatism for capitalism.

I've thought about that a lot Cowboy.

The short answer is; I suspect that a fair, lasting, and viable political system is an impossible dream. Set it up and it would last a decade or two until money, apathy, and ignorance undermine it.

It's all academic really. We're on a collision course with the exponential function, and over the next few decades—maybe even just years—human society is going to be transformed in ways we can only guess at.

It probably won't be pretty.

As a great grandfather, I'm afraid.

Sadly the power to correctly government power problems lies solely with those in the government (not just the political puppets)

And the resources to correct resource issues lies with those with the relevant resources (and with government power to make sure the field isn't tampered with).

Most humans are too short sighted to self-interested and don't want to know - or even (in the halls of academia for example) consider reality to be an enemy force, in light of their own cultural values. (history had churches and religions doing the same).

Same as the people having the power - the first thing with power is they have to understand their own power, the responsibilities that power it, as opposed to the responsibilities others would trick the wielder into to believing on their behalf, and what purpose. No point getting public power if they just put a socialist government into power...as a socialist government arriving at that job via coup would not not how to allocate resources, only how to force others to obey to produce what they demanded be given.

human cultures will keep rising and falling until those things are realised. That is the importance of the individual. because each person must comprehend responsibility and advantage, and be empowered yet know how to not abuse. Without power the individual can not learn responsibility, only follow. Without resources then no-one can progress. The rule of the universe is the lesson will be repeated until it is learnt. the timeframe is entirely up to the students.