NZ Initiative's Eric Crampton says the country has much work to do in restoring housing affordability, but the broad social trends are positive

By Eric Crampton*

Last week, the Salvation Army released its State of the Nation Report. And, contrary to the usual story, the Salvation Army’s report generally paints a picture of improving outcomes. Surely if inequality has been rising, as campaigners tell us, and if inequality ruins the country, as campaigners tell us, then New Zealand must be getting worse.

But the statistics generally tell a different story.

Crime rates are down. Teen pregnancy is down. Drinking rates, overall, are down. Some measures of hazardous drinking have ticked back up to 2007 levels, but reported harms from drinking are down. Spending on gambling is down. Labour force participation is up. Child poverty, as measured by material hardship, is well down, although the number of children in severe poverty is only slightly lower than 2010.

And if we extend the data series farther back, things look even better. The Salvation Army’s report shows that 17% of children in 2014 lived in households earning less than a poverty line fixed in 1998, and that that figure is the same as it was in 2010. But 28% of children were below that line in 1998; unfortunately, the Salvation Army’s report only covers the most recent years. 

The New Zealand Initiative’s forthcoming report, Poorly Understood: The State of Poverty in New Zealand, to be released on February 25, reaches similar conclusions. Excessive focus on the large number of children in households earning less than some fraction of median earnings diverts attention from the 80,000 or so in severe material deprivation – not all of whom will show up in relative income poverty figures.

The Salvation Army report also rightly notes the importance of housing costs in materially contributing to deprivation in New Zealand. Inequality and poverty figures taken after housing costs show worse outcomes than those taken before housing costs.

The country loses out every time urban planning restrictions price families out of Auckland and force them to move to places that are less productive but that have affordable housing. And every time several households have to bunk together in the same house to afford the rent, there are consequences for children’s health.

Housing and zoning decisions like those around Auckland’s Unitary Plan are a substantial part of New Zealand’s poverty problem. The more that local town hall meetings are able to block new developments and wish development on neighbours instead, the less chance we have of building more houses to fix the problem. If you planned on protesting new developments near you, think hard about the consequences of your actions.

Generally improving social statistics despite flat income inequality figures may baffle inequality campaigners. Researchers Wilkinson and Pickett suggested that inequality leads to poor social outcomes, and their work has had no small influence in New Zealand. How can the world be improving if there is inequality?

The best and simplest answer is that Wilkinson and Pickett’s empirical work was wrong. And the critiques of their work have not come only from the right. Andrew Leigh, Australian Labor MP and economist, argued that negative effects of inequality on social outcomes like those pointed to by Wilkinson and Pickett generally do not bear up under scrutiny. It isn’t that Leigh does not care about inequality – his speech on the topic gives the reasons he doesn’t like inequality. Rather, he takes the data seriously and has worked in the area. Empirical work linking inequality to bad social outcomes tends to be fragile: the results fall apart with small changes in how the numbers are run.

The world is far from perfect. In particular, the country has much work to do in restoring housing affordability. But the broad trends are positive.

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*Eric Crampton is head of research at The New Zealand Initiative.

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53 Comments

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I wonder what planet Eric Crampton is living on. It sure isn't the same one I'm living on, the real one, on which everything gets made worse by the day. .

Somewhere right of planet ACT with its population of one.

To "afewknowthetruth". You know your truth & you are always right, so is everyone else in their own truth, for THERE IS NOT ONE TRUTH. I prefer to rejoice in a good, positive piece of news, that's my truth

There are facts, math and physical laws of the universe these are real truth, much else is not truth but more like fantasy.

Apart from the increased levels of pollutants and planetary overheating I often highlight (and the negatives they cause), I suggest you consider such aspects as obesity rates:

'The Annual Update of Key Results 2014/15: New Zealand Health Survey found that:
•one in nine children (aged 2–14 years) were obese (11%)
•a further 22% were children were overweight but not obese
•15% of Māori children were obese
•30% of Pacific children were obese
•children living in the most deprived areas were five times as likely to be obese as children living in the least deprived areas*
•the child obesity rate increased from 8% in 2006/07 to 11% in 2014/15.'

http://www.health.govt.nz/nz-health-statistics/health-statistics-and-dat...

Obesity is symptomatic of poverty, poor food, poor education and a mass media driven by consumption.

I maintain that everything that matters will continue to be made worse until the system implodes because the current economic system requires to be that way, i.e. it is a consume-until-you-can't system. ..

I suggest parents stop driving their kids to school. I can only remember one or two "Fat" kids in the whole school and that was probably due to some genuine medical condition, not complete lack of exercise. Please don't blame FOOD, we ate nothing but PIES and fantastic fry ups in the weekend where we put the grilled bacon fat on "fried bread" !!!! mind you we never drank any fizzy drinks.

Cheer up truther - try some data rather than climate doom porn and peak oil websites.

"In 1820, the vast majority of people lived in extreme poverty and only a tiny elite enjoyed higher standards of living. Economic growth over the last 200 years completely transformed our world, and poverty fell continuously over the last two centuries. This is even more remarkable when we consider that the population increased 7-fold over the same time (which in itself is a consequence of increasing living standards and decreasing mortality – especially of infants and children – around the world). In a world without economic growth, an increase in the population would result in less and less income for everyone, and a 7-fold increase would have surely resulted in a world in which everyone is extremely poor. Yet, the exact opposite happened. In a time of unprecedented population growth we managed to lift more and more people out of poverty! Even in 1981 more than 50% of the world population lived in absolute poverty – this is now down to about 14%. This is still a large number of people, but the change is happening incredibly fast. For our present world, the data tells us that poverty is now falling more quickly than ever before in world history. The first of the Millenium Development Goals set by the UN was to halve the population living in absolute poverty between 1990 and 2015. Rapid economic growth meant that this goal – arguably the most important – was achieved (5 years ahead of time) in 2010."

https://ourworldindata.org/data/growth-and-distribution-of-prosperity/wo...

Irrelevant comment. Sure for 150 years by using more fossil energy every year lifted many ppl out of poverty, trouble is that fossil energy is now going to go into decline even before we consider the damage it is causing due to CC. So these "gains" will reverse.

Either political extreme is in denial and will reject any piece of work that does not support their world view. So left extremists deny climate change (though less so these days I think) just as much as their equiv on the right.

Ditto peak oil.

etc, etc

In terms of "simplest" if that's the best rebuttal you can come up with that its not going to hold much water except with ppl of similar outlook to yourself and you dont need to convert them to your political view.

It appears Crampton is living in the same community the Salvation Army is living in ...

I strongly disagree with this, David, see my extracts from the report below.
.
It looks very much like Mr Crampton only focused on the positive numbers and trends mentioned in the report, but failed to read up on the explanations, what the numbers actually represented, and/or how they were achieved.
The article quickly goes on to focus on government involvement, and quotes it all at being bad. Too much red tap with regards to housing is apparently the only thing wrong with the housing market in Auckland.
Nothing new under the sun from this neo-liberal think tank.
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In fact it's downright reprehensible the way Mr Crampton uses an ill-informed, ill-researched article to try and undermine the likes of Wilson and Pickett, and other writers who've been focusing on inequality and its consequences.

so both are believing in a mythical , non-existant entity that will be their salvation then.

yes sounds about right.

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From the Salvation Army report:
.
Children:
"While most New Zealand children are materially secure and well
supported by their family as well as schools and health services,
a significant minority—perhaps 20%—face a number of social and
economic risks. Over the past two years progress for these children
has been minimal and there are some signs of things getting worse
for the most vulnerable children."
.
I don't call that things getting better.
In fact, if you read the report, the 'declining' number of children living in benefit dependent households, is because Bennett has been kicking people off the benefit, or just changed the name of the government help they receive. It's called massaging the numbers, and not actually reducing child poverty.

more on children:
while number of abuse and neglect have fallen, violence against children has actually increased.
So let's look at this:
less children are being abused
More violence has been reported.
Do you know what this means?
The children who are still being abused, are suffering an increase of assaults against them.
.
I don't call this progress.....
.
The overall assessment on children is:
child poverty C-
children at risk C+
children ad violence D
Education C-
Infant mortality C
Only teenage pregnancy gets an A

There is a committee in New Zealand, which is called the Family Violence Death Review committee.
.
How sad it that.
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In any case, I pulled their latest report (2014) from the internet.
.
Look away now if you want to enjoy the rest of your day:

All deaths
 47 percent of all homicides1 were family violence and family violence related deaths.
 139 people died from family violence and family violence related homicides – an average of 35 per year.
 126 deceased were within the Committee’s terms of reference:
– 63 intimate partner violence deaths
– 37 child abuse and neglect deaths
– 26 intrafamilial violence deaths (all abuse between family members other than intimate partners or parents on their children).
 40 percent of all the deceased lived in the most deprived 20 percent of residential areas
.
Children exposed to intimate partner violence and child abuse and neglect deaths
 77 children were present when an adult or child/ren was killed.
 111 children and young people usually lived in the household where the death occurred and are likely to have been exposed to at least some, and often many, of the repeated episodes of family violence that preceded the fatal event.
 240 surviving children have been affected by exposure to fatal family violence.
.
37 child abuse and neglect deaths
 78 percent were under five years of age.
 51 percent of children died by fatal inflicted injury.
 Men were more likely to kill children by fatal inflicted injury.
 Women were more likely to kill children by neonaticide, filicide/parental suicide or fatal neglectful supervision.
 46 percent of children killed were known to Child, Youth and Family.
 Māori and Pacific children were 5.5 times and 4.8 times (respectively) more likely to die from child abuse and neglect than children of other ethnicities.
 Māori and Pacific adults were 4.9 times and 5.3 times (respectively) more likely to be the offenders of a child abuse and neglect death than adults of other ethnicities
.
63 intimate partner violence deaths
 50 percent took place in the context of a planned or actual separation.
 44 percent were cases of ‘overkill’ (violence far beyond the level needed to cause death).
 Māori were 2.8 times more often deceased and 2.5 times more often offenders of intimate partner violence deaths than non-Māori, non-Pacific peoples.
 38 percent of intimate partner violence deaths occurred in the most deprived 20 percent of residential areas.
.
And if you want to know what overkill means:
In 28 (44 percent) of the 63 cases of people being killed by their partners, the method of killing was a phenomenon known as ‘overkill’ – using violence far beyond what would have been necessary to cause death, with multiple stabbings, severe prolonged beatings and/or multiple violent methods (for example, strangulation, sexual violence and stabbing). In one case, four forms of violence were used in a single death.
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Whilst a lot of people will be quick to point out the number for Moari and Pasiifika recorded, bear in mind that these people also make up the bulk of the lower socio-economic group.
They receive less education
They grow up in poverty
They grow up with violence
They are more likely to be unemployed
And then we're not even mentioning the institutionalised racism which sees more Maori and Pasifika men end up in prison, and receive longer and harder sentences for comparable crimes, than their Pakeha peers.
.

good post, thanks

on Crime:
massaging the numbers, again
or simply numbers being unreliable (different methods of reporting? Recording?)
The drop in custodial sentences is no doubt also due to the fact that crime resolution is at a twelve year low: police are just not solving the crimes, or arresting the criminals:

"Recent falls in recorded crime continued during 2014, although there is
no reliable way of knowing if this is due to falling rates of offending or
changes in the way crime is reported by victims and then recorded by
Police. Against this overall decline, the incidence of violent crime has
changed little, and an even greater share of this violence is occurring
in homes. Prisoner numbers have begun to drop on the back of falling
crime numbers and there appears to have been further modest
progress in reducing re-offending by released prisoners."

I wonder how many ppl report minor crimes these days as its just too painful unless the insurance company insists.

Add in 9300 prisoners in our prisons - more than there has ever been before. Pints to a fundamental failure of successive Governments social and economic policies. Also points to probably the biggest problem that our government faces going into the future - how to keep the majority of the population occupied while the highly educated and farmers produce the national income.

As a percentage of population murray86 how does 9300 prisoners compare to previous times?

From the SA report:

"Prison population declines alongside crime drop
During 2013/14, an average of 8499 people were incarcerated in New Zealand.
Of these, 20.3% were on remand, while 79.7% or 6775 people were serving
sentences. Just over 6% of the prison population were women, and 50.6% were
Māori. These percentages are similar to previous years.
The average prison population during 2013/14 was almost 2% fewer than the
previous 12 months, when an average of 8652 people were incarcerated. This 2%
decline closely matches the 3% decline in recorded crime reported elsewhere in
this report.
Longer term comparisons between prisoner numbers and recorded crime rates
are, however, more disappointing. The prisoner population has grown 5% over
the past five years, from 8101 prisoners during 2008/09 to 8499 during 2013/14.
Yet, over the same period, recorded crime dropped 20%. At some point we might
expect a commensurate fall in the prison muster but such a trend has yet to
emerge. Figure 8 reports average prisoner numbers over the period 2009 to 2014"
.
The Māori imprisonment rate remains at 5.6 times the
non-Māori rate.

Beginning of last week Judith Collins and Corrections reported the Prison muster at 9300. A week before the Sunday Star times article reporting the same info also said Corrections was "puzzled" by the increase. I would have thought it obvious - a fundamental failure of the Governments socio-economic policies that should be creating opportunities and reasonable wages all over the country, not just the major centres.

hmmm prison popn up ..recorded crime down...
to me sounds like govts policies working.
more bads guys in prison..not left on the streets to commit further crime..

a) when desperate with no other recourse ppl steal. b) As more and more ppl get into difficulty the prison population will get bigger and bigger. c) at some point we get riots and a revolution and the ppl who think the Govn's policies are working today risk being the ones that will be hanging from lamposts tomorrow. Personally I really dont want us to go anywhere near such a scenario.

turn it up steven...did you read what I said..recorded crime down.
There is plenty of welfare to access for those who are desperate.
Don't make excuses..some people are scumbags ..often breeding more of them.They need locking up.
Nz sits about 72nd in the world for prisoners per population..More room to move yet.

The SA report states that the recorded crime being down, was a vague number, as it could not be ascertained whether this was because of a true fall in crime, or because the reporting procedures and recording procedures have changed.
.
What was also interesting in the report, is that longer sentences are being handed out, and less community sentences.
People usually now are obliged to serve more of their term than previously, which is one of the reasons why we have an increase in prison population, even through we have less convictions (less convictions does not equal less crime.....)

ok. less convictions COULD equate to less crime(I,m not sure the SA is the only definitive authority on the subject)
previous posters equate higher prison numbers to failed govt policies.
The opposite is true.
Policies like the 3 strikes are working..

From the report:
"Further reduction in recorded crime rates during 2013/14 has
a hollow tone given the arbitrary way in which the Police
record crime. In the absence of other information, such as the
forthcoming NZ Crime and Safety Survey, the public has no way
of knowing if crime reductions are due to reduced offending, or
changes in the way offences are reported and recorded."
.
Which basically means that the police are performing that badly they need to mess around with their reporting in order to try and fudge the numbers.
.
Moreover, the violence seems to have shifted: from outside the home to inside: the percentage of domestic violence as part of overall crime, has increased from 56% in 2009, to 61% in 2014.
So yes, maybe the 3 strikes has had an effect: men now work out their frustrations on their families, by battering their women and children more.
.
If the number REALLY were positive, don't you think the government would be shouting it from the rooftops?
They're keeping quite schtum on this subject, because they know the number won't stand up aginst too much scrutiny......
oh - and FOI requests are now (or will become soon) prohibitively expensive.
Democracy? Open and transparent government?
hm.

3 strikes is questionable. http://www.studentpulse.com/articles/696/assessing-the-impact-of-three-s....

plus,

"An evaluation of the data revealed that three strikes states experienced a slower decline in most areas of crime prior to the implementation of their laws when compared to other states, which may have been responsible for the laws’ initial gravitas among citizens and policy-makers. Interestingly, murder rates in three strikes states declined 12.9 percent less rapidly than the national trend, indicating that the fear of mandatory sentencing may have motivated certain criminals to eliminate witnesses and visit violence upon arresting officers"

You always do a great job of showing how extremist you are, but lots of ppl living in la la land with you.

Work and Income:
.
treading water
while an increase in jobs were recorded, it's merely soaking up the fall in job number since the GFC. More youth, Maori and Pasifika were employed than the year before, but so were people over 65.
The claimants of super rose by 22%.
So not only are more people claiming super, they're also not relinquishing their jobs, clawing a larger piece of the pie towards them.
.
Gambling:
Less pokies, more lotto, more TAB.
Lotto/powerball increased by 34% since 2010
Sports betting increased by 28% since 2010

From the article by Mr Crampton:

"The country loses out every time urban planning restrictions price families out of Auckland and force them to move to places that are less productive but that have affordable housing. And every time several households have to bunk together in the same house to afford the rent, there are consequences for children’s health.

Housing and zoning decisions like those around Auckland’s Unitary Plan are a substantial part of New Zealand’s poverty problem. The more that local town hall meetings are able to block new developments and wish development on neighbours instead, the less chance we have of building more houses to fix the problem. If you planned on protesting new developments near you, think hard about the consequences of your actions."
.
From the Sally Army report:
"Auckland’s housing shortage just gets deeper and deeper, and
the Government’s response is to continue to rely on market
forces and a reduction in regulatory constraints. While there
has been a recent upturn in building consent numbers in
Auckland and Christchurch, the Christchurch numbers are to
be expected given the post-earthquake rebuild. The Auckland
numbers are woefully inadequate in the face of the recent
migration surge. Either way, the housing being built in both
cities is not affordable for those at the bottom of the housing
and labour markets. The impact of this mismatch is increasing
overcrowding and leading to declining health in some
communities."
.
Spot the difference.
.
But wait, there's more:
from SA report:
"A mixed picture is emerging around housing affordability. Those
New Zealanders living outside of Auckland and Christchurch
probably experience improving housing affordability,
while some living in Auckland and Christchurch experience
deteriorating affordability. Tenants in many parts of the
country have probably experienced small increases in rents
relative to incomes, although rent increases in Auckland and
Christchurch will have been much harder to afford. Continuing
house price increases in Auckland pose a real threat to that
region’s prosperity and growth—and perhaps to New Zealand’s
financial stability. Government inaction, outside of some reform
to resource management procedures, is appearing less and less
adequate."
.
Urban planning restrictions are being loosened left, right, and centre.
The protest at 'town halls' is local communities fighting against this hollowing out, this 'quick fix' the government is imposing on them.

Wow! those are some rose tinted glasses.. but its good to know its the urban planning restrictions that are the problem, and not the fact we are importing more people than we can house.

Sounds like Auckland is the only productive place in the country.

"The country loses out every time urban planning restrictions price families out of Auckland and force them to move to places that are less productive but that have affordable housing"

I reckon a lot of people would really have a better life if they were not sitting in Auckland at the taxpayer's expense (social housing and benefits and, yes, prisons); why do we have to import foreign labour to do the productive rural work??

Exactly Kiwchas. 'places that are less productive'. Who says they are less productive. The Kiwi Initiative consistently makes statements they obviously believe. But are just plucked out of their heads.

What I find particularly galling, is that the MSM has been gutted and declawed to such an extent, that they will regurgitate propaganda the likes if NZ Initiative are spouting.

And this is what most people end up believing.
.
Even a site like this - NZ Initiative was approached by this site to publish a weekly article.
And then it's up to the commentators to provide some balance?
Any source which comes with such a clear bias as the NZ Initiative should be avoided, certainly not requested to add to the dialogue.
Right wing slant and bias is already rampant in all published content in NZ, and it certainly comes with an agenda.
It is up to everybody who is appalled at this, to start shouting a little louder.

Actually DFTBA I am appalled at child poverty and abuse and violence statistics.....but what you are not weighing up is that some people actually want to deal with the issues differently to how you seem to want to deal with them and you have a huge problem with that and so start labeling right wing etc.....some of your comments on here smack of abuse.........what are you trying to balance? We know that the Right is about freedom which can only be attained if all have freedom which means responsibility for ones self and actions so they do not restrict another persons freedom etc......on the other hand we have the left which opposes freedom and wants to enforce its own brand of responsibility.........and then of course there are those who claim centre position who should really be named the fence sitters........now you explain to me how anything left, centre left or in the middle can ever provide balance or resolve the issues that have been created??

"We know that the Right is about freedom which can only be attained if all have freedom which means responsibility for ones self" there is a difference between right and libertarian. And no we do not know the right is about freedom, quite the reverse if anything.

There's economic freedom (to use your own private property as you see fit, for individuals to buy and sell whatever they want from and to each other) and there's social freedom (to live life as you wish and not be restricted by gender, religious or race-based requirements).

Right wingers tend to favour the former but not the latter (eg support for traditional marriage, opposition to abortion rights), left wingers tend to favour the latter but not the former (preference for community ownership, restrictions on property rights); libertarians favour both.

So if you're going to assert that the right is not about freedom you'd have to say the same for the left.

right v left, yes I do say the same about both, I consider both as bad as each other. tht is however a 1D line when a political compass shows such differences somewhat better.

Steven - Try reading DFTBA's comments on this page and then try reading mine in context.
Hint DTBA labelled NZ Initiatives as Neo-Liberal and Right Wing .....hint I used "etc' .....

I already have and as per usual yours make no sense.

No Steven the only interest you have is in pushing your brand and that is why you label others in a condescending manner.......the fact is you don't want people to have freedom or liberty and think these things should be strictly controlled by the regulatory regime.......you don't just desire to control the economics of an economy you also desire to control the social side as well..........

In-correct, but with freedom comes responsibility which some people will shirk leaving an unfair burden on others. Necessary regulation corrects this.

MSM are struggling to remain relevant.....more and more get their info from other sources. Surprisingly most don't give a shyyyyyt about the Kardashians, max key posting selfies, what flag a former all black prefers or Kate midletons dress.

It's probably sad but true that this is what most of the poplace do care about.

nah the sources pay for their advertisement to pass as information see the NZ initiative here is called "opinion" or the various real estate articles in the Herald

Every butthurt leftie is ragin on this guy for his report, and being a "neo-liberal" (whatever the hell that is), but at least he's clearly identified the housing shortage and the insane planning restrictions as the major driver of poverty (which it is).

This guy has written an opinion piece, very loosely based on the Salvation Army report.
His opinion seems to be nearly directly the opposite of the Salvation Army Report findings.
.
With regards to housing, the report points out that the only reaction from government so far has been to massively loosen planning restrictions, and gut the RMA.
.
I think most sociologists and economists would disagree with you on what is the major driver of poverty, though.

Look at the end of each chapter in the Salvation Army Report where they give assessments. They give assessments on 22 categories. Assessments can be "?" (don't know); negative; no change; or, positive.

Here's the tally.

Classification Count (ex housing) Count (housing)
? 2  
Negative 1 2
No Change 7 1
Positive 9  

I struggle to see how there can be such consensus among Interest's commentariat that this is other than a rather positive report. On housing, things are bad, and that worsens things in other areas - something we've talked about for rather a while at The Initiative. 

I'm not going to be engaging with replies here, but give your heads a shake folks.

 

 

So OK you cherry pick a report, which I would suspect also lacks academic rigour ie has been through a peer review process and so?

A lot of the 'positives', are C, C- or C+, there's one or 2 Bs and one or two As.
The C category is described as Limited or modest progress.
.
The comments beside each assessment number should be used for further guidance, as the 'result' is based on the numbers and percentages alone, but the comments give more information, and a lot of the time, this comment section is not positive, even if the 'result' is positive.

It does seem that contributions from the NZI raise the hackles of those of us who live in the real world unbiased by neo-liberal speak. Many of us used to laugh at the outpourings of the Business Roundtable singly led by Roger Kerr. Now this beast is a many headed monster but always good for a laugh and then ignored.