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Posts Tagged ‘Margaret Thatcher’

Ripples in History

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Question: What is the difference between Free Trade and Fair Trade?

Answer, later.

On 26 December 1991, the Soviet Union was formally dissolved. Two years earlier, the Berlin Wall had been physically torn down by jubilant Berliners. (The symbolism of the Berlin Wall as divisive and an affront to the human spirit seems not to have be well understood by the current demagogue-President of the United States, who is maniacally pursuing his own version of a Dividing Wall between neighbouring nations.)

The reasons for the collapse of the Soviet system have been well traversed. But in the end, it boiled down to a simple reality: people simply no longer believed in, or cared about, the Soviet brand of authoritarian “socialism” and apathy reigned (as related to me by Hungarians in the late ’70s and early ’80s).

As the former Soviet Union broke apart and it’s bulwark of Eastern European nations looked westward for  their future, the fallout from the demise of one of the three great super-powers created ripples that would last for decades. Some of the unintended consequences are still not fully widely appreciated.

The United States, for a while, was hailed as the “the sole global superpower“. Writing in 2012, Mikhail Gorbachev said;

This event led to euphoria and a “winner’s complex” among the American political elite. The United States could not resist the temptation to announce its “victory” in the cold war. The “sole remaining superpower” staked a claim to monopoly leadership in world affairs. That, and the equating of the breakup of the Soviet Union with the end of the cold war, which in reality had ended two years before, has had far-reaching consequences. Therein are the roots of many mistakes that have brought the world to its current troubled state.

Declarations of an “American victory” were somewhat premature. In reality, with the rise of the Chinese economy and a resurgent Russia, the 21st Century would be anything but American.

The break-up of the former Soviet Union was also hailed as a “signal” to  humanity that the experiment of  collectivisation and state ownership of all means of production was a failure. As Indian Marxist, E.M.S. Namboodiripad wrote in 1991;

Today, however, talks are going on that not only have the socialist experiments in the USSR and Eastern Europe failed, but world socialism has collapsed. Adversaries of the socialist movement argue chat, far from the Soviet Union being the starting point of humanity’s transition from capitalism to socialism, the socialist countries in Eastern Europe including the Soviet Union have begun their march from socialism to capitalism. From this they go on to add that the theory of Marxism-Leninism itself has failed.

We Marxist-Leninists are above all realists and, as realists, we concede that the recent events in Eastern Europe and the Soviet Union are a major setback to world socialism. We are therefore engaging ourselves in the process of a deep examination of the reasons why these developments took place and whether the trend that manifested itself in these developments can be reversed.

But there were other strands of fallout. The term “socialism” became – as the word “fascism” was after 1945 – a disparaging epithet to throw at one’s political rival. Post-Soviet Union, “socialist” and “socialism” was equated with failure.

Socialism could no longer be seen as a credible alternative to the fad of neo-liberal, free-market, globalisation sweeping the world. Championed by Thatcher in the UK and Reagan in the US, it reached New Zealand’s shores in the mid-1980s.

The NZ Labour Party – supposedly a social democrat/socialist party for the working class – implemented radical liberalisation of trade, banking, commerce, labour laws. Economic “reforms” went hand-in-hand with social reforms such as the 1986 Homosexual Law reform in 1986, de-criminalisation of prostitution/solicitation  in 2003, and the marriage equality act in 2013.

The Labour Party had been well and truly captured by apostles to Thatcher and Reagan. It could no longer conceivably be called a social democratic or socialist party.

Aside from the short-lived Alliance Party (which imploded in 2002 over New Zealand coalition government’s decision to participate in the invasion of Afghanistan), the only other Parliamentary parties that feasibly represented left-wing voters were the Mana Movement, led by MP Hone Harawira, and the Green Party.  The Mana Movement itself was destroyed after an unholy alliance in 2014 between Labour,  National, NZ First, and the Maori Party to support the Labour Party candidate, Kelvin Davis.

Which currently leaves the Green Party to represent the Left of Aotearoa New Zealand’s political spectrum.

The Green Party itself is currently under attack from both ends of the Body Politic in this country.

Some media pundits and the Right  are calling for the Greens  to return to their “environmental base” whilst the Left are decrying the Greens as not left-wing enough.

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Meanwhile, the rise of populism and the far right paralled the spread of neo-liberal “reforms” around the world.

In 1998, only two nations in Europe – Switzerland and Slovakia – had governments made up in part by populist parties.

By February of this year, the number of  European nations with populist parties in coalition governments had increased to more than eleven. (More, if countries like Russia and Ukraine are included.)

Europe’s populism has been matched with Trump in the United States;  Erdogan in Turkey; Duterte in the Philippines; Jair Bolsonaro in Brazil, etc. Throughout the world, populist parties – mostly (though not always) of a right-wing persuasion – have been on the rise.

The most obvious causes for the rise in right-wing populism has also been well-canvassed;

Most have tapped into a backlash against immigration and a globalized economy that many people feel has left them behind..

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The common thread dates back to the 2008 financial crisis, which opened the door for many populists. Rising inequality and the perception of an unjust — if not corrupt — response to the crash eroded trust in the ability of established leaders to address shifts in the global economy, including technological change and the rise of China.

In Hungary, right-wing populism has taken on a distinct air of neo-fascism;

The biggest advances have been made in central and eastern Europe. All four so-called Visegrád countries are governed by populist parties including Viktor Orbán’s Fidesz in Hungary – where populist parties secured 63% of the vote in this year’s elections – and Jarosław Kaczyński’s Law and Justice in Poland.

Both parties only started showing their true colours – populist, culturally conservative, authoritarian – after they were first elected. They are now attacking core liberal institutions such as the independent judiciary and free press, increasingly defining national identities in terms of ethnicity and religion and demonising opponents, such as the Hungarian-born Jewish financier George Soros, in language reminiscent of the 1930s.

The public backlash against immigration, globalisation, with a concomitant loss of well-paying jobs, and the flow of wealth to the top 1 Percent is well known, understood, and documented;

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What is not well understood is why voters have generally turned away from traditional left-wing parties and policies, and increasingly voted for right-wing (and often far right-wing) populist parties.

In Europe, the backlash against orthodox neo-liberalism/globalisation resulted not in the election of a left-wing government – but in Brexit. In choosing to shun the European Union, British voters by a small majority literally walked away from the continental bloc.

Whether consciously or sub-consciously, this blogger contends the public view the Left as having failed the ultimate  test. The former Soviet Union – a super-power in the 20th century rising from a feudalistic monarchy to becoming a nuclear-armed, space-faring nation with global influence and aspirations – failed. And it failed dramatically with the whole world watching.

Since 1989/91, the televised spectacle of the collapse of the former Soviet Bloc has imprinted itself in the psyche of most of the world’s population. The message was made abundantly clear as the Berlin Wall came down; the Red Army retreated from Eastern Europe; and President Gorbachev passed laws making his Soviet Presidency redundant: the Left were unable (or unwilling) to staunch the neo-liberal/globalist orthodoxy.

Indeed, in almost every country, neo-liberalism/globalisation had ‘captured’ supposedly social democratic or centre-left parties such as the Labour Party in UK; the Democrats in US; Labour in Aotearoa New Zealand and Australia, etc.

Thus the parliamentary wing of  social democratic/centre-left offered no solutions. They were seen by the voting public as part of the problem.

If Nature abhors a vacuum, the same applies to the Political Environment. The fall of the former-Soviet Union created a political vacuum on the established Right-Left continuum.

That political vacuum would soon be filled as people sought solutions to what many perceived as an attack on their national identities; falling standard of living; unfulfilled aspirations; unresponsive traditional political parties, and the rise and rise of a tiny wealthy elite.

So it came to pass. The vacuum was filled, as it was in the 1920s and ’30s, by populist parties and demagogic leaders who offered quick-fix, simplistic solutions. Cue: the trumpets of nationalism, racism, intolerance of minorities, and the emboldening of even worse extremism on the far-right and alt-right.

To compound the worsening political climate, the Left continued to make itself largely irrelevant to the everyday struggles of working and middle class New Zealanders.

A cursory look at blogposts on The Daily Blog, for example will quickly reveal that up until recently (17 April, to be precise) most blogposts were fixated on the issue of “free speech” and the Green Party. Green Party MP, Golriz Ghahraman, to be concise.

Meanwhile, out in the Real World…

teachers, mid-wives, and medical professionals were on strike for better pay.

… the environment continued to be polluted out of existence.

greenhouse gas emissions continued to rise.

mental health continued to be in crisis.

… savage covert cuts to disability funding were planned.

homelessness was still a ‘thing.

… our security apparatus failed us spectacularly by spying on the wrong people.

… the coalition government buckled to property speculators.

For many on the Left, though, the priority was “free speech”.

If ever there was an instance of a public “Meh!” moment,  this was it.

Just as the GCSB, NZSIS, NZ Police, and Uncle Tom Cobbly were all distracted by Greenpeace, environmental activists, journalists, bloggers, Maori activists, Christchurch Earthquake  survivors, et al, instead of keeping an eye on white supremacists/neo-fascists – the left-wing blogosphere was seemingly distracted by it’s own Shiny Thingy.

The recent furore on the issue of “free speech” and the Green Party’s call to address hate speech appeared to suggest that Aotearoa New Zealand was about to become a quasi-Stalinist state with bloggers and journalists rounded up and despatched to re-education camps on Stewart Island. The unhealthy obsession with the Green Party – Green MP, Golriz Ghahraman, to be precise – drew anger usually reserved for the likes of Don Brash, Mike Hosking, Duncan Garner, et al..

Although, with considerable grim irony, some on the Left were quite happy to protect the “free speech” for the likes of Southern, Molyneux, Brash, et al, whilst launching tirades against Ms Ghahraman.

There remains an ongoing systematic vilification of Ms Ghahraman instead of addressing the issues surrounding “free speech/hate speech”. Some of the vitriol heaped on Ms Ghahraman took on sinister under-tones of misogyny and racism.

That some of the personal abuse has appeared on left-wing forums is especially troubling.

Yet, despite hysterical screams of outrage that the Green Party was advocating stifling “free speech”, a closer examination of their proposal was anything but.

In a recent post on social media, Ms Ghahraman posed a valid question;

“You’re not allowed to harass, or to make up lies that harm an individual. It’s against the law.

However you are allowed to spread hate and lies about a group of people based on their religion or gender, without consequence.

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So why are individuals protected from defamation,  or harassment,  but whole groups of people aren’t?”

The capitalist system is built on the primacy of individualism, property ownership, and reputational interests (which has a direct bearing on an individual’s commercial activities).

To protect that fundamental underpinning of capitalism, the rights of the capitalist individual was elevated above all else. Including above the needs of society itself.

In October 1987, British Prime Minister, Margaret Thatcher – architect of Britain’s neo-liberal, free-market “reforms” – was famously quoted in an interview saying;

And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first…”

Western law reflects the capitalist precept that the rights of individuals are recognised – but groups of people are not. (Class-action lawsuits are a rare exception, usually reserved for physical loss, such as mechanical failures, financial malfeasance, medical botch-ups, etc.)

Under the capitalist system, social groups are a nullity under the law.

Recent high-profile public defamation lawsuits have centered on Matthew Blomfield, Earl Hagaman, and Colin Craig.

All three cases involved lawsuits claiming defamation; suffering because of harmful untrue public statements, and sought awards for damages.

The case of Mr Blomfield successfully suing far-right blogger, Cameron Slater, was recently commented on The Daily Blog. Comments posted after the main article generally approved of businessman, Matthew Blomfield’s victory.

Yet, the right to sue does not extend to groups based on religion, ethnicity, gender/sex, etc.

That privilege is reserved solely for individuals. Those individuals are usually wealthy, white, and not women.

That was the point Green MP, Golriz Ghahraman was making. Or trying to make, as the issue was drowned out amidst a hysteria that veered well into moral panic.

It is salient to  note that “free speech” advocates remain mostly silent on this issue.

Free speech is not absolute. A person can be hauled before a court and sued for considerable sums of money if found guilty of defamation.

The legal system protects the rights of individuals.  Groups – not so fortunate. Because as pointed out above, capitalism is about the Individual. Groups – not so much.

At the beginning of this blogpost, I posed the question: What is the difference between Free Trade and Fair Trade?

Free trade is unfettered. It protects and serves the interests of  corporations. The goal is to maximise profits for individuals (shareholders) at the expense of all else.

Fair trade serves the interests of communities, as well as individuals in those communities. The goal is to better the lives of people, but not at the expense of all else (eg, the environment, workers’ rights, etc).

The Left prides itself on the point of difference from the Right in that we act for the collective good. The primacy of the Individual, at the expense of the greater good, is not something we generally look favourably upon.

We want our trade to be fair. Should we expect less for our public discourse?

It is a contradiction to our much vaunted progressive values that we extend the right to Individuals to legally defend themselves in a Court of Law against defamation and harm – yet deny that same right to groups who might also suffer defamation and harm.

We talk the talk when it comes to collective action for the greater good. We demand the right for workers to act collectively and join unions. We demand adequate taxation to pay for public education, healthcare, housing for the poor, environmental protection, support services for the disabled, etc, etc.

Yet, when it comes to walking the walk to extend the right to legal protections for groups –  some (many?) on the Left balk at extending the same legal rights extended to Individuals – usually wealthy businessmen or politicians in positions of power.

The irony is inescapable; that some on the Left seem wholly comfortable with wealthy businessmen being privileged with a legal right to defence against harmful speech that entire groups of people are not.

If we, as a society, are willing to have defamation laws available, they must be available to everyone, groups as sell as wealthy individuals. The law must be for all. Or not at all.

Those days of privilege can no longer be tolerated.

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References

CNN: Fall of the Berlin Wall – On 29th anniversary, it’s a different world

Norwich University: Exploring 5 Reasons for the Collapse of the Soviet Union

Noam Chomsky: Barack Obama and the ‘Unipolar Moment’

The Nation: Is the World Really Safer Without the Soviet Union?

E.M.S. Namboodiripad: ‘An Experiment that Failed’?  (alt. link)

Huffington Post: Trump Knocks Socialism And Bernie Sanders Does Not Look Pleased

NZ Herald: Prostitution decriminalised, brothels to be licensed

Scoop: Why The Alliance-Left Rebelled

Fairfax media: Winston Peters backs Labour’s Kelvin Davis

NZ Herald: Election 2014 –  Hone’s call to arms after Winston backs Kelvin

Fairfax media: Kelvin Davis blasts Mana Party  (alt. link)

Mediaworks/Newshub: Lloyd Burr – The Greens have lost their way

The Daily Blog: If you think that the NZ Green Party (who are just as wedded to neoliberalism as Labour is) are your new political home, you are delusional

The Guardian: How populism emerged as an electoral force in Europe

Bloomberg: The Rise of Populism

Wikipedia: Right-wing populism

Vox: Forms and sources of inequality in the United States

The Irish Times: Conor O’Clery – Remembering the last day of the Soviet Union

Radio NZ: ‘No mandate’ for capital gains tax – PM

Fairfax/Stuff media: Secondary school teachers to strike, citing lack of patience with contract negotiations

Radio NZ: Midwives to strike next week

Fairfax/Stuff media: Resident doctors call back planned pre-Easter strike

Mediaworks/Newshub: New Zealand’s ‘dirtiest industry’ blasted over environment report

Climate News Network: Human carbon emissions to rise in 2019

Noted/The Listener: Youth mental health is in crisis and NZ is failing to keep up

NZ Herald: Limited showers, no meal prep – ‘Ruthless’ plans to cut disabled care revealed

NZ Herald: New report reveals the sharp end of homelessness in Wellington

Mediaworks/Newshub: Jacinda Ardern announces Royal Commission into security agencies after Christchurch attack

Twitter: Golriz Ghahraman – Hate speech – 8:47am  17 April 2019

Margaret Thatcher Foundation: Woman’s Own – interview – 31 October 1987

The Daily Blog: The Human Rights Review Tribunal has upheld a complaint against Cameron Slater and order that he pay $70,000 damages to Matthew Blomfield, one of the highest awards ever made.

Justrade: Prof Jane Kelsey & Jim Stanford

Additional

Green Party Aotearoa: Golriz Ghahraman speech in response to the Christchurch mosque terror attacks

Fairfax/Stuff media: MP lacks credibility in urging hate speech law

NZ Herald: Political Roundup – Outlawing hate speech and hate crimes

NZ Herald: Christchurch mosque shootings – Does New Zealand need hate speech laws after terror attacks?

Other Blogposts

Pundit: Doesn’t hate-speech need to include some hatred?

The Standard: Reflections on Free Speech and Public Discourse

The Standard: The Green Party on the Mosque murders

TDB:  Hone Harawira – Blaming black boys for a white boy massacre

TDB:  Recognising Hate Speech When You See It.

TDB:  Green Party start their campaign to curtail free speech – the danger of Millennial micro aggression policing culture defining hate speech

Previous related blogposts

National – the Party of free speech?! Yeah, right.

“Free speech” – The Rules according to the Right

The Christchurch Attack: is the stage is set for a continuing domino of death?

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This blogpost was first published on The Daily Blog on 23 April 2019.

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An earthquake separates John Key and ‘The Iron Lady’, Margaret Thatcher

24 November 2016 3 comments

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In October 1987, British Prime Minister, Margaret Thatcher – apostle of Britain’s neo-liberal, free-market “reforms” – was famously quoted in an interview saying;

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And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour…

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Twenty-nine years later, as much of New Zealand is ravaged by a 7.5 earthquake, John Key makes an appeal to the people of Aotearoa on Radio NZ’s ‘Morning Report‘;

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The one thing I’d we’d just say to New Zealanders at the moment is stay close to your family and friends. Make sure you listen to the radio and listen to the best information that you’re getting. And if you do have certainly older neighbours or family, if you could go in and check up on them that would be most appreciated. Because there will be people feeling genuinely alone.

 

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Far from decrying Key’s sound advice, I would applaud him for giving it at a time when the country is rattled by ongoing,  severe,  seismic activity.

But it illustrates one fact with crystal-clarity;  Thatcher was wrong. There is such a thing as ‘society’.  We are our Brothers and Sisters Keepers; and functioning solely and purely  for our own Individualistic and immediate Familial benefit is not to our  advantage.

For without it, we are very much alone and left vulnerable to the immense, implacable, forces of nature.

Which is why the dictates of neo-liberalism – the so-called “invisible hand of the free-market” and selfish Cult of Individualism –  is doomed to failure. That is why the international  arm of neo-liberalism – globalisation – is  being rejected from country to country.

Because at the end of the day, when this country is hit by earthquakes that tear apart our roads, bridges, offices, community facilities, factories, ports, schools, and our own homes – I don’t see the “Invisible Hand of the Free Market” coming to our assistance, “invisible” or not.

Only people, working collectively for the greater good, can achieve mutual support – quite often for no personal benefit or gain.

Defenders of the neo-liberal/free market/globalisation ideology should stop and consider; we cannot have the Primacy of the Individual in good times, and then seek sanctuary within the strength of society in bad. People acting together as a community is either within us all the time, or not at all.

It is time for the leader of New Zealand’s free-market, pro-neo-liberal, political party to understand this simple truth.

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References

Margaret Thatcher Foundation: Woman’s Own – interview – 31 October 1987

Radio NZ: Morning Report – John Key urges New Zealanders to look out for their neighbours

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This blogpost was first published on The Daily Blog on 19 November 2016.

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Living in John Key’s “rock star economy”

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This piece, from a regular Facebook user and commentator on public and political issues, caught my attention;

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Dear Mr. Key.

The following report is indicative of the reality of living in your Rockstar economy. This crap is the daily norm in the lives of Mum & Dad victims all over the country. Some of them are fortunate to just get robbed as against getting stabbed to death. Do these sort of issues ever affect you in Remuera or Omaha or Hawaii ? Why not have a quiet word to the comedy duo Collins and Tolley and see if one or both are remotely interested in fulfilling their sworn oaths of office ?

Have a self centered weekend.

Edmond.

 

Jenny Petera works hard to make a go of Birdie’s Cafe in Kaitaia’s main street. So…

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It reminded me of something John Key said, in one of his many election speeches ranting about the many supposed “failures” of the Labour government. Specifically, on 29 January 2008, in a speech entitled A Fresh Start for New Zealand;

 

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This time a year ago, I talked about the underclass that has been allowed to develop in New Zealand. Labour said the problem didn't exist. They said there was no underclass in New Zealand. But who now could deny it? 2007 showed us its bitter fruits. The dramatic drive-by shooting of two-year-old Jhia Te Tua, caught in a battle between two gangs in Wanganui. The incidence of typhoid, a Third World disease, reaching a 20-year high. The horrific torture and eventual death of three-year-old Nia Glassie. The staggering discovery of a lost tribe of 6,000 children who are not enrolled at any school. The list goes on and on. The fact is, that under Labour, there has been no let-up in the drift to social and economic separatism. We don't need more of their hand-wringing, their strategies, and their interdepartmental working groups. What's needed is the courage to make the tough calls to fix these problems. Today, I'm going to announce a new set of policies which will leave you in no doubt that National has that courage.

“This time a year ago, I talked about the underclass that has been allowed to develop in New Zealand. Labour said the problem didn’t exist. They said there was no underclass in New Zealand.
But who now could deny it? 2007 showed us its bitter fruits. The dramatic drive-by shooting of two-year-old Jhia Te Tua, caught in a battle between two gangs in Wanganui. The incidence of typhoid, a Third World disease, reaching a 20-year high. The horrific torture and eventual death of three-year-old Nia Glassie. The staggering discovery of a lost tribe of 6,000 children who are not enrolled at any school.
The list goes on and on. The fact is, that under Labour, there has been no let-up in the drift to social and economic separatism.
We don’t need more of their hand-wringing, their strategies, and their interdepartmental working groups. What’s needed is the courage to make the tough calls to fix these problems.
Today, I’m going to announce a new set of policies which will leave you in no doubt that National has that courage     […]      Violent youth crime is at an all-time high. Robbery is up. Grievous assaults are up. Aggravated robbery is up. Young criminals are graduating from petty crime to more serious crime; unexploded time-bombs on a fast-track to Paremoremo. The victims are people like you and me. Innocent Kiwis randomly beaten by teens on the North Shore. A Wellington Uni student beaten to a pulp on his walk home. A dairy worker stabbed to death in South Auckland last week. A 14-year-old arrested at the weekend for a fatal stabbing in Tokoroa. The list goes on and on. Rather than being the hope for our future, these young people represent our future fears. The habit of the Clark Government is always to shy away from these problems. They prefer to poke their noses into the lives of good parents while ignoring the ticking time bombs right in front of them. That’s not my approach. Today, I’m going to outline some new policy that forms part of National’s plan for giving young people the future they deserve. This Youth Plan will have two major aspects to it. One part is about education. The other part is about rolling up our sleeves to prevent New Zealand’s youth crime problem from becoming tomorrow’s crisis. This plan is about giving all young people the opportunity and responsibility to better themselves, no matter what their circumstances, abilities, or track record. That’s the Kiwi Way.”

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Beware of Tories banging on about “being tough on crime”;

 

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National Party staying strong on crime

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Electioneering on being “tough on crime” is easy. Any loud mouth Tory fool, desperate for our votes, can do it.

Actually addressing the root causes of crime – unemployment, poverty, increasing inequality, social dislocation, youth alienation, easy availability of cheap liquor, viewing humans as “consumers” rather than citizens; and the neo-liberal cult of selfishness/individualism all contribute to social stresses on the individual.

Let me point to two different commentators on the concept of society;

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“And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour…”

“And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour…” – Margaret Thatcher, Former UK Prime Minister

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"Create a society that values material things above all else. Strip it of industry. Raise taxes for the poor and reduce them for the rich and for corporations. Prop up failed financial institutions with public money. Ask for more tax, while vastly reducing public services. Put adverts everywhere, regardless of peoples ability to afford the things they advertise. Allow the cost of food and housing to eclipse people's ability to pay for them. Light blue touch paper." - Andrew Maxwell, Irish Comedian

“Create a society that values material things above all else. Strip it of industry. Raise taxes for the poor and reduce them for the rich and for corporations. Prop up failed financial institutions with public money. Ask for more tax, while vastly reducing public services. Put adverts everywhere, regardless of peoples ability to afford the things they advertise. Allow the cost of food and housing to eclipse people’s ability to pay for them. Light blue touch paper.” – Andrew Maxwell, Irish Comedian

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So which view is closer to the truth?

It may be worth pondering that if Margaret Thatcher was correct, that there is no such thing as society“, then the notion  of “anti-social” behaviour is difficult to sustain. How can one be “anti” something that does not exist?

The free marketeers; the neo-liberals; those who promote the Individual rights over Community needs, seem surprised that after decades of implementing their philosophy that only the Individual exists – that there exist individuals who care very little (if anything) for their communities and other people.

For those individuals, as Margaret Thatcher once maintained, there is no such thing as society, or community.  There is only Me. And what I want.

Now… light blue touch paper. Let’s see what happens.

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References

Facebook:  Edmond Slackbladder

Northern Advocate: Second raid leaves cafe owner fuming

John Key: A Fresh Start for New Zealand

Margaret Thatcher Foundation: Woman’s Own – interview – 31 October 1987

Previous related blogposts

Random Thoughts on Random Things #6


 

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Above image acknowledgment: Francis Owen/Lurch Left Memes

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Random Thoughts on Random Things #6…

11 June 2014 4 comments

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In 1987, New Right, pro-free market, British Prime Minister, Margaret Thatcher, was famously quoted saying;

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margaret-thatcher

“And, you know, there is no such thing as society. There are individual men and women, and there are families. And no government can do anything except through people, and people must look to themselves first. It’s our duty to look after ourselves and then, also to look after our neighbour…”

 

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(Interview 23 September 1987, as quoted in by Douglas Keay, Woman’s Own, 31 October 1987)

If , as the New Right maintains – “there is no such thing as society” – we should not be surprised that those who feel  alienated and adrift; angry and isolated; also believe  “there is no such thing as society“.

What else is there for them?

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social ills

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After all, if Margaret Thatcher was correct, “and, you know, there is no such thing as society” – then the term “anti-social” doesn’t apply.  How can one be “anti-social” without first acknowledging the existence of society?

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References

Wikiquote:  Margaret Thatcher

Margaret Thatcher Foundation: Woman’s Own – interview – 31 October 1987


 

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Why I am a Leftie

Above image acknowledgment: Francis Owen/Lurch Left Memes

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Johnny’s Report Card – National Standards Assessment y/e 2012 – inequality & poverty

9 January 2013 3 comments

To Whom It May Concern; the following Report Card detail’s Johnny’s achievements over the last four years.

The following contrasts compare four years, ranging from the end of 2008 to the end of this year, 2012.

Whilst it is acknowledged that the Global Financial Crisis impacted harshly on our society and economy, it is also fair to say that National has had the benefits of starting out with a sound economy (surpluses, low unemployment, etc)  in 2008 and four years in office to make good on it’s election promises..

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Inequality & Poverty

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give the rich tax cuts

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The rhetoric:

You can measure a society by how it looks after its most vunerable, once I was one of them. I will never turn my back on that.

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Yet, also, you can measure a society by how many vulnerable people it creates – people who are able to work, and able to take responsibility for their own lives and their children’s lives, yet end up depending long-term on the State.” – John Key, 28 November 2006

See: Speech to North Shore National Party luncheon

My father died when I was young. My mother was, for a time, on the Widow’s Benefit, and also worked as a cleaner. But the State ensured that I had a roof over my head and money for my mother to put food on the table. It also gave me the opportunity to have a good education. My mother made sure I took that opportunity, and the rest was up to me.” – John Key, 30 Jan 2007

See: The Kiwi Way: A Fair Go For All

I have said before that I believe in the welfare state and that I will never turn my back on it. We should be proud to be a country that looks after its most vulnerable citizens. We should be proud to be a country that supports people when they can’t find work, are ill, or aren’t able to work. ”- John Key, 30 Jan 2007

See: IBID

When Sir Ed climbed Mt Everest back in 1953, he wasn’t the only New Zealander on top of the world. We all were.  We were among the five wealthiest countries on earth. Not any more.

Fifty-five years on, we are no longer an Everest nation.  We are among the foothill nations at the base of the OECD wealth mountain. Number 22 for income per person, and falling.

But what does a wealth ranking matter, you might ask?  Why does it matter if we’re number 22 or number four? 

It matters because at number 22 your income is lower, you have to work harder, and you can save less.  You face more uncertainty when things go wrong, when you or your family get sick or lose a job.  No New Zealand sports team would be happy to be number 22.  Why is the Government?

This is a great country.  But it could be so much greater.  It has been so much greater. 

So the question I’m asking Kiwi voters is this:  Do you really believe this is as good as it gets for New Zealand?  Or are you prepared to back yourselves and this country to be greater still? National certainly is. 

[…]

So, make no mistake: this election won’t be fought only on Labour’s economic legacy.  National will be asking Labour to front up on their social legacy, too. Many of the social problems the Government said it would solve have only got worse.

This time a year ago, I talked about the underclass that has been allowed to develop in New Zealand. Labour said the problem didn’t exist.  They said there was no underclass in New Zealand.

But who now could deny it?  2007 showed us its bitter fruits. The dramatic drive-by shooting of two-year-old Jhia Te Tua, caught in a battle between two gangs in Wanganui. The incidence of typhoid, a Third World disease, reaching a 20-year high. The horrific torture and eventual death of three-year-old Nia Glassie. The staggering discovery of a lost tribe of 6,000 children who are not enrolled at any school.

The list goes on and on.  The fact is, that under Labour, there has been no let-up in the drift to social and economic separatism.

We don’t need more of their hand-wringing, their strategies, and their interdepartmental working groups. What’s needed is the courage to make the tough calls to fix these problems.” – John Key, 29 January 2008

See: A Fresh Start for New Zealand

I’m a product of the welfare state – there hasn’t been any great secret about that.” – John Key,  27 Aug 2011

See:  ‘Socialist streak’ just means we have a heart, says Key

The results:

Interestingly, whilst Key’s 2008 speech (A Fresh Start for New Zealand) started off describing New Zealand’s growing underclass, National’s Dear Leader went on to describe a series of punitive actions that his Administration would undertake, if elected to power.

The following sub-headings in Key’s speech are illuminating,

  • Youth Plan (education, youth crime)
  • Youth Guarantee (education, training, universal educational entitlement, threat of benefit sanctions)
  • Youth Justice (extending Youth Court; tougher sentences for youth offenders; new Youth Court orders)
  • New powers for the Youth Court
  • First, the power to issue parenting orders.
  • Secondly, the power to refer young offenders to mentoring programmes.
  • Thirdly, the power to refer young offenders to compulsory drug or alcohol rehabilitation programmes.
  • Tougher sentences
  • The first is longer residential sentences.
  • In addition, National will fund a new type of programme for teenagers who aren’t bad enough to be put in a youth justice facility but who need a serious dose of intervention.
  • National will fund a new range of revolutionary ‘Fresh Start Programmes’. (boot camps)
  • Finally, we think the Youth Court needs better teeth for following up serious youth offenders when they are released back into the community.

This was John Key’s “vision” of a “Fresh Start for New Zealand”; more punitive action against youth offenders – but precious little to address the root causes of youth crime; poverty, lack of jobs, poor housing, worsening health, lack of training and apprenticeships, etc, etc, etc.

Key’s “solution” was to treat the symptoms of this country’s growing underclass.

So it should be hardly any surprise that those symptoms worsened, and the underclass; prison population; domestic violence; hungry children; poor housing – all grew.

The truly unbelievable aspect to Key’s shonkey speech in 2008 was how comprehensively New Zealand voters sucked it up, en masse.  (We seriously need to introduce comprehensive  Civics courses in our schools, to teach young New Zealanders how to recognise and deconstruct political BS.)

Tax cuts:

Whichever way we look at it, New Zealand in the last four years has become a more unequal society, and with growing poverty.

The first causal factor was the 2009 and 2010 tax cuts, which gave the most to the highest income earners and most wealthy New Zealanders,

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tax-cuts-april-2009

Source

Additional info

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When, on 1 April 2009,  then-Maori Party MP, Rahui Katene asked John Key in Parliament,

How do low-income New Zealanders benefit from the tax changes introduced today?”

Dear Leader replied,

They benefit because 630,000 New Zealanders—the New Zealanders who do not have children and who have been relatively low-income New Zealanders, and who got absolutely nothing under the previous Labour Government for 9 years—get $10 a week, or $500 a year. It is a small start, and it will be welcomed.”

See: TheyWorkForYou Blog – Tax Cuts—Implementation

At least Key wasn’t bullshitting us this time; for those on minimum wage up to  it was indeed small. Someone on $100,000 would receive two and a half times more than someone on minimum wage.

The following year’s October tax cuts were hardly better – but this time the rate of GST was increased from 12.5% to 15%,

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Budget 2010 - What the tax cuts mean for you

Source

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The impact on low-income families – along with increased costs for medicines (see:  Prescription charges to increase), and other user-pays government fees – would be harsh.

Contrary to the NZ Herald’s claim above, the average earner would not be “better off”. The $15 a week “extra” would be quickly swallowed up in rising government charges; medicine prescriptions; increased petrol taxes; and the flow-on inflationary effects throughout the economy.

This was not a “tax switch” – it was a tax-swindle – with the richest making the biggest gains.

Interestingly, ACT’s Roger Douglas – commenting on the 2009 tax cuts – realised that National was having to borrow heavily to finance said tax-cuts,

Does the Prime Minister agree with Professor Eric Leeper’s statement in the latest Reserve Bank Bulletin that counter-cyclical fiscal policy could actually be counter-productive; if not, why not; if yes, why, then, is he borrowing $1 billion plus interest a year in order to give tax relief of $1 billion?” – Roger Douglas, 1 April 2009

So much for National’s promises in 2008,

National’s rebalancing of the tax system is self-funding and requires no cuts to public services or additional borrowing.

[…]

This makes it absolutely clear that to fund National’s tax package there is no requirement for additional borrowing and there is no requirement to cut public services.”

See: National – Tax Policy

Salvation Army Report: The Growing Divide – A state of the Nation Report 2012

This document by the Salvation Army is one of the most insightful and far-reaching analyses of current economic stagnation; political factors; and related social problems. It pulls no punches.

This blogger encourages people to read the Report (it’s written in plain english; very little jargon; and contains excellent data, with references). It should be put into the letterboxes of every home in this country. Click here to link to the report.

[NB: The report was written at a time when unemployment was at 6.3%. Since then it has increased three consecutive Quarters to the current 7.3% (see: Unemployment January 2012 to November 2012.]

Amongst the Report’s findings,

1. Inflation, higher prices, increased GST, raised indirect taxes (eg, fuel taxes), and government charges, have off-set the tax cuts of October 2010.

2. If New Zealand is to return to the historically low rate of unemployment of 3.8% in December 2006, (from the then-figure of 6.3%), we would require  90,000 jobs, in on top of  25,000 to 30,000 jobs required each and every year just to keep up with the growth of the labour force. The figure of 90,000 will have increased as unemployment now stands at 7.3%.

3. The rapid growth in the labour force participation rate of people aged 65+ (from 14.1% in December 2006, to 19.5% in December 2011)  has been at the expense of  falling employment participation of young people in the 15 – 19 year old age group.

Those in the 15 – 19 year old age group, the Report states, have “borne the brunt of the recession and tightening of the job market”. Unemployment for this group rose from 14.3% in December 2006, to  24.2% in December 2011.

It is also this group targetted by National’s harsh “welfare reforms”, which attempts to blame young people as “work shy” – a ‘double whammy’ from the Global Financial Crisis and a right wing government keen to shift blame for rising  unemployment onto powerless victims of the Recession.

4. The numbers of welfare recipients receiving the Domestic Purposes Benefit has also been affected by the Global Financial Crisis and resultant Great Recession. DPB recipients dropped from a peak of approximately 111,000 in late 2003, to 96,000 in mid 2008. Since 2008, and as redundancies increased; unemployment rose; and jobs disappeared, the number reversed. DPB recipients skyrocketed to an all time record of 114,230 benefits by December 2011.

Far from being “bene bludgers” opting for the DPB as a “lifestyle choice”  (which is constantly parrotted by ill-informed conservatives and low information voters), solo-parents are as vulnerable to recessionary forces as other  workers.

5. In the year to December 2011,  average weekly earnings rose a only 2.6% from $991.05 to $1016.95. Taking annual inflation of 1.8% into account, weekly earnings rose  by a fractional 0.8%. With increases in rent, fuel tax, and other government charges, that increase will have vanished altogether.

6. The Report gave as an example of unequal wage increases the difference between hourly earnings in the finance sector increasing by $1.01 per hour, from $36.63 per hour in June 2011 to $37.64 in December 2011.

By contrast, the average wage in the traditionally poorly paid accommodation sector increased by only 3 cents an hour from $16.40 to $16.43 per hour.This was a clear illustration of  the average hourly earnings of the highest paid sector increasing 2.3 times more than those for lower paid workers.

7. Most of the increase in State benefit payments  over the past five years was made as  higher spending on New Zealand Superannuation (43% of the increase) and  Working for Families (37% of the increase). Approximately 568,000 people were receiving superannuation by June 2011.

This compared to 319,000 of other welfare recipents as at December 2011 – up  from 264,500 from December 2006. Welfare numbers were dependent on the economy and increased only because of the impact by the GFC-caused Recession.

8. Food parcels issued to families and people in need doubled from 24,250 in 2006, to 53,360 in 2011. Again, this was in accordance with the advent of the GFC in 2007/08; skyrocketting unemployment; and a lack of job-creation policies by National, once it won the election in late 2008. (John Key admitted to this on 18 October 2011.  See: Key admits underclass still growing)

9. Inflation of living costs for  2011 was fractionally higher for Low-Income Household CPI at 2.1% than it was for the All Groups CPIs, at 1.8%. Low-Income Households were more vulnerable to increasing costs such as rent, government charges, and gst increases.

10. The Report correctly predicted  that levels of unemployment would rise during 2012, and would negatively impact on growth in wages and salaries of poorest paid workers.

For a full understanding the the Report, it is recommended that people read the document in it’s entirety, as I have  abridged and condensed much of the information contained therein.

The Report reinforces anecdotal evidence, facts, and  stats, that are already in wide circulation and confirms that jobs, incomes, and those receiving social welfare assistance are all affected by the global downturn over the last four to five years.

After all, John Key uses that very excuse to explain away National’s poor economic performance,

We did inherit a pretty bad situation with the global financial crisis... ” – John Key, 11 Sept 2011

See: View from the top

Ministry of Social Development: The widening gap: perceptions of poverty and income inequalities and implications for health and social outcomes

In New Zealand, income inequalities have increased since the neo-liberal reforms and benefit cuts of the late 1980s and 1990s, although the rate has slowed this decade (Blakely et al. 2007, Ministry of Social Development 2006, Ministry of Social Development 2007). The New Zealand Living Standards 2004 report showed a million New Zealanders living in some degree of hardship, with a quarter of these in severe hardship. Despite the buoyant economy and falls in unemployment levels, not only was there a slight increase in the overall percentage of those living in poverty between 2000 and 2004, but those with the most restricted living standards had slipped deeper into poverty (poverty defined as exclusion from the minimum acceptable way of life in one’s own society because of inadequate resources) (Ministry of Social Development 2006, 2007).

[…]

This greater income inequality has seen New Zealand move into 18th place out of 25 in the OECD in terms of income inequality from 1982 to 2004 (Ministry of Social Development 2007). Over the preceding two decades New Zealand experienced the largest growth in inequalities in the OECD (2000 figures), moving from two Gini coefficient points below the OECD average to three Gini points above (Ministry of Social Development 2007:45-46). One indication of the impact of these inequalities has been that relative poverty rates, including child poverty rates, have increased.

Source: MSD

OECD: Growing Income Inequality in OECD Countries: What Drives it and How Can Policy Tackle it ?

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Over the two decades to the onset of the global economic crisis, real disposable household incomes increased in all OECD countries, by 1.7% a year, on average (Table 1). In a large majority of OECD countries, household incomes of the top 10% grew faster than those of the poorest 10%, leading to widening income inequality. Differences in the pace of income growth across household groups were particularly pronounced in some of the English-speaking countries, some of the Nordic countries and Israel. In Israel and Japan, real incomes of people at the bottom of the income ladder actually have fallen since the mid-1980s.

Over the two decades to the onset of the global economic crisis, real disposable household incomes increased in all OECD countries, by 1.7% a year, on average. In a large majority of OECD countries, household incomes of the top 10% grew faster than those of the poorest 10%, leading to widening income inequality. Differences in the pace of income growth across household groups were particularly pronounced in some of the English-speaking countries, some of the Nordic countries and Israel. In Israel and Japan, real incomes of people at the bottom of the income ladder actually have fallen since the mid-1980s.

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Source: OECD

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At present, across OECD countries, the average income of the richest 10% of the population is about nine times that of the poorest 10%. While this ratio is much lower in the Nordic countries and in many continental European countries, it rises to around 14 to 1 in Israel, Turkey and the United States, to a high of 27 to 1 in Chile and Mexico. The Gini coefficient, a standard measure of income inequality that ranges from zero (when everybody has identical incomes) to 1 (when all income goes to only one person), stood at 0.28 in the mid-1980s on average in OECD countries; by the late 2000s, it had increased by some 10%, to 0.31. On this measure, income inequality increased in 17 out of the 22 OECD countries for which data are available (Figure 1, left-hand panel). In Finland, Germany, Israel, New Zealand, Sweden and the United States, the Gini coefficient increased by more than 4 percentage points: and only five countries recorded drops, albeit small ones .

Source:  IBID

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[See also Addendum 2 below.]

So it’s official – the Great Experiment in free market reforms from the mid 1980s to the late 2000s, has produced growing inequality here in New Zealand. Indeed, the trend has been global,

Income inequality followed different patterns across OECD countries and there are signs that levels may be converging at a common and higher average. Inequality first began to rise in the late 1970s and early 1980s in some Anglophone countries, notably in the United Kingdom and the United States, followed by a more widespread increase from the late 1980s on. The most recent trends show a widening gap between poor and rich in some of the already high-inequality countries, such as Israel and the United States. But countries such as Denmark, Germany and Sweden, which have traditionally had low inequality, are no longer spared from the rising inequality trend: in fact, inequality grew more in these three countries than anywhere else during the past decade. However, some countries recorded declining income inequality recently, often from high levels (Chile, Mexico and Turkey).

Source:  IBID

It is no coincidence that the trends “first began to rise in the late 1970s and early 1980s in some Anglophone countries, notably in the United Kingdom and the United States” – that is the precise period when Margaret Thatcher won office in May 1979 and Ronald Reagan became US president in January 1981.

Our turn came three years later with the Lange/Douglas government that ushered in “Rogernomnics“.

The OECD report above is simply being ‘coy’ by not connecting-the-dots.

What is more telling? Any person reading this would not be surprised. We have become innured to an unfair economic system which produces unequal outcomes and great disparities in incomes and wealth. As the OECD report states with alarmingly candour,

Increases in household income inequality have been largely driven by changes in the distribution of wages and salaries which account for 75% of household incomes of working-age adults. With very few exceptions (France, Japan and Spain), wages of the 10% best-paid workers have risen relative to those of the 10% least-paid workers. This was due both to growing earnings’ shares at the top and declining shares at the bottom, but top earners saw their incomes rising particularly sharply (Atkinson, 2009). The highest 10% of earners have been leaving the middle earners behind more rapidly than the lowest earners have been drifting away from the middle.

Source:  IBID

Furthermore, as the OECD report points out, “…more working hours were lost among low-wage than among high-wage earners, again contributing to increasing earnings inequality“.

The OECD report is backed up by Statistics New Zealand,

As with total employment, the drop in full-time employment mainly reflected a decrease in male
full-time employment, which was down 12,000 (down 1.2 percent).
Usual hours worked decreased 0.4 percent – down to 79.6 million hours over the quarter. The
changes in full and part-time employment reflect the fall in the number of hours people usually
work during a week. Over the quarter, the number of hours people actually worked decreased
0.8 percent, down to 73.2 million hours.

See: Household Labour Force Survey: September 2012 quarter

Ministry of Social Development – Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2011

Whilst New Zealand has no formal or official measure of poverty or material hardship/deprivation, there are studies and conclusions leading to reports that offer a disquieting insight into the state of income inequality, poverty, and child poverty in our country.

One  such report was conducted by Bryan Perry for the Ministry of Social Development in August 2012, entitled the “Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2011” – a 195 page study.

The full report is available here: MSD – Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2011

A much-condensed precis of the Report;

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2012 MSD Household Incomes Report ‘Summary’

  1. Household incomes BHC (before deducting housing costs) rose in real terms for all income groups from 2007 to 2009, continuing the steady growth that began in 1994,
  2. Income inequality increased significantly between 1988 to 2004, then fell from 2004 to 2007 as a result of the WFF package, and was still around the same level in 2009 as in 2007,
  3. Income inequality grew very rapidly from 1988 to 1992, followed by a slower but steady rise through to 2004,
  4. From 2004 to 2007 inequality fell mainly as a result of the WFF package,
  5. Median Household  incomes fell 3% in real terms after little change (+1%) from HES 2009 to HES 2010,
  6. This fall followed a long and strong rise in the median from the mid 1990s to 2008-09 averaging 3% pa in real terms. GDP per capita increased at 2.5% pa over this period on averagwe,
  7. Incomes fell for deciles 3-6, but rose for the top decile especially,
  8. At the very bottom (P15 down), incomes were flat from HES 2010 to HES 2011 (protected by benefit rates being CPI adjusted and NZS being wage related),
  9. Inequality decreased significantly from HES 2009 to HES 2010 then rose from HES 2010 to HES 2011 to its highest level ever. This volatility reflects the impact of the GFC,
  10. On the AHC (HouseHold income after deducting housing costs) moving line measure, the child poverty rate increased from 2007 (22%) to 2009 (25%), reflecting the rise in the proportion of households with children with high  ‘outgoings-to-income’  (OTIs),
  11. The 2009 child poverty rate is almost double the rate that prevailed in the early 1980s,
  12. In 2009, on the Social Report measure (AHC ‘fixed line’ 60%), there were 230,000 children (22%) below the low-income threshold (ie ‘in poverty’), down from 380,000 (37%) in 2001,
  13. Hardship rates for children rose from 15% in the 2007 HES to 21% in HES 2011 using the ELSI measure. In part, this reflects the falling incomes of those in deciles 3-6, some of whom may already have been in a precarious financial position – the loss of income has been enough to tip them into hardship even though their incomes are still above the poverty threshold,
  14. Chronic poverty (as defined in the Incomes Report) is about having an average household income over seven years that is below the poverty threshold over those years. Looking at children in poverty in a HES survey (cross-sectional), 60% of them are in chronic poverty in any survey and 40% in temporary poverty. In addition there are others who are in chronic poverty but not in current poverty in that one year – this group is about 20% of the number in current poverty.
  15. In 2009, between 460,000 and 780,000 people were in households with incomes below the low-income thresholds (ie ‘in poverty’),
  16. In 2009, on the Social Report measure (AHC ‘fixed line’ 60%), there were 650,000 (15%) below the low-income threshold (ie ‘in poverty’, down from 930,000 (25%) in 2001,
  17. In 2009, just over one in three poor children were from households where at least one adult was in full-time employment, down from around one in two before Working for Families (2004),
  18. Income poverty rates for single person working-age households trebled from the 1980s to 2007 (10% to 30%) and were 35% in 2011. One in 9 poor people and 1 in 4 poor households are from this group. The rates are higher for the older group living on their own (45-64 years) than for the younger group,
  19. In 2001, 42% of households in the lowest income quintile had high ‘outgoings-to-income’, but this fell to 34% by 2004 reflecting the introduction of income-related rents, and has remained steady since then (33% in 2009),
  20. In 2009, 37% of children lived in households with high ‘outgoings-to-income’, a rise from 32% in 2007, and 26% in 2004 – the 2004 figure was the lowest proportion for some time, following the introduction of income-related rents in 2001 (when the proportion with high ‘outgoings-to-income’ was 32%),
  21. In 2009, on the Social Report measure (AHC ‘fixed line’ 60%), there were 650,000 (15%) below the low-income threshold (ie ‘in poverty’, down from 930,000 (25%) in 2001,
  22. The child poverty rate increased from 2007 (22%) to 2009 (25%), reflecting the rise in the proportion of households with children with high ‘outgoings-to-income’,
  23. The 2009 child poverty rate is almost double the rate that prevailed in the early 1980s,
  24. Just over two of every three two parent families were dual earner families in 2009, up from one in two in the early 1980s, but down from nearly three in four in 2004,
  25. Children in sole parent families have a higher risk of hardship (46%) than those in two parent families (14%). This reflects the relatively low full-time employment rate for sole parents (35% in 2009) –  73% of sole parents were in receipt of a main benefit in 2009,
  26. The value of New Zealand Superannuation (NZS) fell further below the median household income from 2007 to 2009,
  27. People living in sole parent households are a relatively small subgroup, making up only 8% of the population.    Only 3% of those in sole parent households are found in the top income quintile.  On the other hand, a high proportion have incomes in the lower end of the income distribution.
  28. High housing costs relative to income are often associated with financial stress for low to middle income households.  Low-income households especially can be left with insufficient income to meet other basic needs such as food, clothing, transport, medical care and education,
  29. For the bottom quintile, the proportion with high ‘outgoings-to-income’ reduced from 2001 to 2004 with the introduction of income related rents, then remained steady in 2007 and 2009 at the 2004 level.1   For all but the bottom quintile, the proportion with high housing costs rose strongly from 2004 to 2007.  From 2007 to 2009, the situation for the second quintile continued to worsen, such that by 2009, each of the two lower quintiles had one in three households with high ‘outgoings-to-income’,
  30. From 2007 to 2009, median household incomes (BHC – HH income before deducting housing costs) rose by 4.3% pa in real terms (8.6% in total).  This continues the steady growth in the median from the low point in 1994.  The AHC (HH income after deducting housing costs) median rose less rapidly (3.2% pa), reflecting the relatively rapid rise in average accommodationcosts,
  31. The increasing dispersion of household incomes from the 1980s through to 2009 is clear. For the period as a whole, incomes for households above the median increased proportionately much more than did the incomes of households in the lower three deciles Real equivalised household incomes (BHC) decile boundaries, 1982 to 2009   .
  32. In 2009 the incomes of the bottom 30% of the population were on average only a little better in real terms than those of their counterparts two decades earlier in 1988. On the other hand there were more substantial gains in the period for the top half of the distribution. The income distribution is therefore much more dispersed in 2009 than in 1988,    Real equivalised household incomes (AHC) decile boundaries (2009 dollars)  .

  33. The most significant structural change to the income distribution over the two decades from 1984 to 2004  is a significant hollowing out of the middle parts of the distribution from $12,000 to $30,000 (equivalised) and a corresponding increase in the proportion of the population in higher income households.  There was also a small increase in the proportion of the population in low-income households in this period.  From 2004 to 2007, the impact of the Working for Families package in that period is very clear for low to middle income households.The income distribution was more dispersed in 2004 than in 1984.  From 2004 to 2007 income inequality decreased.
  34. The significant change in shape of the income distribution from 2004 to 2007 reflects two main factors: (A) the impact of the WFF package on low to middle income households and (B) the reduction in the number of people in households whose main source of income is an income-tested benefit (100,000 fewer in 2007 than in 2004)
  35. As recently as 1996, the government of the time in New Zealand was openly disapproving of any poverty discourse.  However, in 2002, in the context of the Agenda for Children, the government made a commitment to eliminate child poverty, and in the Speech from the Throne in November 2005, the Governor-General described the Working for Families package as “the biggest offensive on child poverty New Zealand has seen for decades”.   The current National-led government, like the previous Labour-led government, espouses the principle that ‘paid work is the best way to reduce child poverty’. New Zealand does not however have an official poverty measure.
  36. The rise in moving line child poverty rates from 1990 to 1992 was driven by two factors: the rise in unemployment, and the 1991 benefit rate cuts which decreased real incomes for beneficiaries by a greater amount than the median fell in the period,
  37. From 1992 to 1998 the 60% of median moving line poverty rate for children fell as unemployment rates fell and incomes for those around the poverty line rose more quickly than the median in the period,
  38. From 1998 the median continued to grow in real terms, but the incomes of many low-income households with children remained fairly static through to 2004.  This meant that the moving line child poverty rate rose to 2004, indicating that low-income households with children were on average further from the median in 2004 than in 1998,
  39. On the After Housing Costs (AHC) moving line measure, the child poverty rate increased from 2007 (22%) to 2009 (25%), reflecting the rise in the proportion of HouseHolds with children with high OTIs (‘outgoings-to-income’ ratio),
  40. From 2004 to 2007, the poverty rate fell strongly … for the working poor than for the beneficiary poor. There were no further policy changes to housing assistance from 2007 to 2009 – the maximum rates of assistance remained fixed and did not move in line with movements in housing costs, and net housing expenditure rose for low-income households with children.  This is reflected in the rise in child poverty rates from 2007 to 2009 using the moving line AHC approach.

.(Report Note: when a household spends more than 30% of its income on accommodation it is said to have a high “OTI”  –  ‘outgoings-to-income’ ratio)

The above is a heavily condensed version of Bryan Perry’s report. For a full report, please refer to: Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2011

It is fairly clear that income inequality is not only still prevalent – but increasing. The ‘Gini’ does not lie – and the Inequality Factor has risen from 30.2 to 33.5 (the higher the figure, the more inequality).

Child poverty is still with us, and remains  New Zealand’s most critical problem (I refuse to call it an “issue”).

Despite John Key’s fine words and stirring rhetoric, National has failed to change it’s core “values” and adheres to a dogmatic faith in the Market to deliver solutions to poverty in our country.

Yet, John Key should know precisely what needs to be done. As he told the nation five years ago,

My father died when I was young. My mother was, for a time, on the Widow’s Benefit, and also worked as a cleaner. But the State ensured that I had a roof over my head and money for my mother to put food on the table. It also gave me the opportunity to have a good education. My mother made sure I took that opportunity, and the rest was up to me.” – John Key, 30 Jan 2007

See: The Kiwi Way: A Fair Go For All

The State invested heavily in Mr Key – as it did with many other people prior to the Rogernomics roll-backs of the late 1980s – and New Zealand benefitted accordingly from that social investment.

The social welfare system is designed as a safety net for citizens in time of need. Whether through job losses or injury or raising children single-handed, our society – through the State – demands that no one suffers. (Never mind the deranged ravings of the ill-informed on talkback radio.)

However, there is another role for our welfare society; to guarantee that the young from impoverished and vulnerable families  are accorded the same opportunities that other, luckier parents can provide for their own children.

This is a country of plenty. There is no reason why we cannot eradicate poverty; poor housing; disease; lack of adequate, nourishing food for all children; and low schooling/training outcomes.

The only reasons that this blogger can see for the perpetuation of poverty is a double curse on our country, namely,

  1. An irrational prejudice against the poor
  2. A debilitating lack of will

Until we resolve both of these collective “disabilities” to our vision for a better society, we will continue to reap the rotten fruits of our inaction.

On 28 November 2006, John Key said,

You can measure a society by how it looks after its most vunerable, once I was one of them. I will never turn my back on that.”

I see no evidence of that.

Indeed, six years later, Key admitted that the underclass he spoke of has not diminished,

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Key admits underclass still growing

Full story

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Addendum 1

It is interesting and worthwhile to compare the rhetoric of John Key’s speech, A Fresh Start for New Zealand, with the data contained in the Salvation Army report, “The Growing Divide“.  Both are worth reading. It rapidly becomes clear how Key cynically mis-represented facts to suit his Party’s election agenda.

Addendum 2

It is worth noting that the GINI Coefficient – which is one method by which to measure income inequality – shows interesting figures for New Zealand,

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OCED_New Zealand_GINI_coefficient 1970s_late_2000s

Source: OECD Income distribution – Inequality (GINI co-efficient)

A high GINI factor (close to 1 or 100, expressed as a percentage) indicates maximum inequality. A figure at zero indicates absolute income equality.

New Zealand’s GINI Coefficient rose (income became more unequal) from the mid-1980s to around 2000. At the mid-2000s, the GINI Coefficient began to reduce – indicating incomes are becoming less unequal. (Though has not addressed growing poverty in this country.)

What factor intervened in the mid-2000s to stem the rising inequality of incomes?

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working for families

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The same policy introduced by the preceding Labour Government,  which Dear Leader, John Key, once described as “communism by stealth”  (see: National accuses Government of communism by stealth) – but  by 2008 had decided that he liked “Working for Families” after all (see:  National to keep Working for Families unchanged).

After 2010, the GINI coefficient begins to rise again, as effects from our stagnating economy and National’s policies begin to over-take the positive income-redistribution aspects of ‘Working for Families’.

Income inequality in New Zealand is once again on the rise,

Gini scores (x100) for market and disposable household income, 1986 to 2011 (18-64 yrs)

HES year

Before taxes and transfers (market income)

After taxes and transfers (disposable income)

Reduction (%)

1986

36.4

26.4

27

1991

42.4

31.3

26

1996

43.1

32.9

24

2001

43.1

33.1

23

2004

41.7

32.9

21

2009

40.3

32.3

20

2010

38.3

30.2

21

2011

42.2

33.5

21

 Source: MSD – Household incomes in New Zealand: Trends in indicators of inequality and hardship 1982 to 2011

Additional

Dominion Post:  Children need changes now – commissioner

 

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Inequality and poverty

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TPPA: Business launches propaganda campaign

3 December 2012 12 comments

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scaling the heights of  capitalism

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When it comes to misguided, New Zealand does it very well.

If the actions of 50+ businesspeople, professional lobbyists, and an ex-politician are anything to go by, some folk have yet to learn the lessons of the last thirty years of failed orthodox neo-liberal economic dogma.

Fifty people today (3 December)  put their names to an open letter to the Prime Minister, in support of TPPA negotiations. The letter was signed by former prime minister Jim Bolger and fortynine others. (See: Open letter to Prime Minister)

Firstly, this blogger supports the right of freedom of expression for these 50 individuals to write to our Dear Leader.

Just as I have a freedom of expression to tear their letter apart and reveal it to be dangerous, naive BS, with little thought for our future or consequences.

The letter started with,

We, the leaders of major New Zealand companies and leading business organisations, write to underline the importance of international trade and investment for New Zealand and to express our support for the Trans Pacific Partnership (TPP) negotiations now underway amongst eleven APEC economies.”

Economies“?!

Don’t they mean “countries”? Or “nations”?

The use of “economies” was prevalent  in the 1980s when neo-liberalism took hold around the world. It suggested that, as Margaret Thatcher maintained, there was no such thing as “society”. There was only the Individual; the family; and contractual transactions.

All pure ideological claptrap, of course.

Try taking the concept of society away from  social creature like humans and the result is predictable,

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We are conscious that TPP is a work in progress and that judgement about the final outcome needs to be withheld until negotiators have finished their work.”

Now this really gets my goat.

How can these 50 intelligent, well-educated, highly experienced and business-savy men and women profess to support a document they have not read and  suggest that  ” judgement about the final outcome needs to be withheld until negotiators have finished their work”?!

How many contracts have these 50 people supported and signed without first reading the text?!

It beggars belief that businesspeople who run million-dollar (or billion dollar!) enterprises, are endorsing a document, sight unseen?

Because very few people in this country – or any other country – have read the proposed TPP Agreement.  In fact, out of 29 chapters, we are privy to only five – and only because they were leaked.

Our aim in writing is to endorse the effort now underway and to outline our conviction that this effort should continue in the interests of building a more prosperous and sustainable Asia Pacific region and of ensuring that business can play its full part in the region’s continuing recovery and future economic growth.

I’d still like to know how these 50 Esteemed Gentlemen and Ladies know that “that this effort should continue in the interests of building a more prosperous and sustainable Asia Pacific region“.

Their faith is almost bordering on the religious. Have angels been whispering in their ears?

We note that the treaty ratification process requires there to be consultation on the negotiated outcome before its adoption by Parliament.”

Which, by then, may be too late. Especially if – as many suspect – Key will sign up up to some horrendous agreement that,

  1. Undermines the viability of Pharmac to buy cheaper, generic drugs,
  2. Results in New Zealand being vulnerable to investor lawsuits should Parliament pass any law that “damages” their profitability (See previous blogpost:  Dispatches from Planet Key)

How can there be democratic oversight by the public and Parliament if a completed Agreement is presented to Parliament as a fait accompli?

This may suit business – but then, businesspeople and National supporters tend not to support democracy as much as the rest of the country might like.

This will assist economic growth and job creation in New Zealand.”

Rubbish. It will do no such thing. In fact, if the NAFTA (North American Free Trade Agreement) is anything to go by, we can expect more jobs to be lost, exported to overseas manufacturers which ‘enjoy’ a cheaper labour force.

NAFTA’s opponents attribute much of the displacement caused in the US labor market to the United States’ growing trade deficits with Mexico and Canada. According to the Economic Policy Institute, rise in the trade deficit with Mexico alone since NAFTA was enacted led to the net displacement of 682,900 U.S. jobs by 2010.  Critics see the argument of the proponents of NAFTA as being one-sided because they only take into consideration export-oriented job impact instead of looking at the trade balance, also known as net exports. They argue that increases in imports ultimately displaced the production of goods that would have been made domestically by workers within the United States.

The export-oriented argument is also critiqued because of the discrepancy between domestically produced exports and exports produced in foreign countries. For example, many US exports are simply being shipped to Mexican maquiladores where they are assembled, and then shipped back to the U.S. as final products.  These are not products destined for consumption by Mexicans, yet they made up 61% of exports in 2002. However, only domestically produced exports are the ones that support U.S. labor. Therefore, the measure of net impact of trade should be calculated using only domestically produced exports as an indicator of job creation.

According to the Economic Policy Institute’s study, 61% of the net job losses due to trade with Mexico under NAFTA, or 415,000 jobs, were relatively high paying manufacturing jobs.  Certain states with heavy emphasis on manufacturing industries like Michigan, Ohio, Pennsylvania, Indiana, and California were significantly affected by these job losses. For example, in Ohio, Trade Adjustment Assistance and NAFTA-TAA identified 14,653 jobs directly lost due to NAFTA-related reasons like relocation of U.S. firms to Mexico. Similarly, in Pennsylvania, Keystone Research Center attributed 150,000 job losses in the state to the rising U.S. trade deficit. Since 1993, 38,325 of those job losses are directly related to trade with Mexico and Canada. Although many of these workers laid off due to NAFTA were reallocated to other sectors, the majority of workers were relocated to the service industry, where average wages are 4/5 to that of the manufacturing sector.

See: NAFTA’s effect on United States employment

An increase in domestic manufacturing output and a proportionally greater domestic investment in manufacturing does not necessarily mean an increase in domestic manufacturing jobs; this increase may simply reflect greater automation and higher productivity. Although the U.S. total civilian employment may have grown by almost 15 million in between 1993 and 2001, manufacturing jobs only increased by 476,000 in the same time period.  Furthermore from 1994 to 2007, net manufacturing employment has declined by 3,654,000, and during this period several other free trade agreements have been concluded or expanded

See: North American Free Trade Agreement

We are already losing thousand of manufacturing jobs. A TPPA will worsen the situation,  as  local businesses make use of cheaper labour elsewhere. This means more unemployment for us;  further downward pressure of wages; and more of our taxes spent on welfare.

A prime example is our current Free Trade Agreement with China.

Thousands of jobs have been lost in New Zealand as manufacturers such as Fisher & Paykel have relocated their assembly plants to China, where labour is much cheaper.

In April 2008, we lost 430 jobs to China,

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Fisher & Paykel move 'damages iconic brand'

Full story

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All due to our FTA with that country. Now imagine this scenario multiplied ten-fold.

As ABN Amro analyst Dennis Lee said,

They are moving their production to low-cost countries. It’s a world-wide trend. The indication is quite clear. They have to find the place that can provide them with the lowest cost production.”

So the promise of  ” job creation in New Zealand ” is utter garbage.

It will certainly increase profits for shareholders.

But more jobs? Don’t count on it.

Local and worldwide experience – especially in the United States where cities such as Detroit have had their manufacturing hollowed-out – should serve as a clear warning (See:  Police: “Enter Detroit At Your Own Risk”). Free trade agreements are not about jobs; they are about strengthening corporate power and maximising dividend returns to shareholders.

It’s just a shame that the fifty people who put their signatures to the open letter to Dear Leader couldn’t be more honest about it.

The open letter ends with this,

We stand ready to assist negotiators in this effort and to participate with other members of civil society in a dialogue about how TPP can contribute to what is best for our country, its people and the people of the wider region to which we belong.

A good start to ” how TPP can contribute to what is best for our country ” would be to make the negotiations public and reveal the contents of the proposed Agreement.

That would be a jolly good start.

Addendum I

A lawyer, Daniel Kalderimis, assures us that  disputes between investors and states are real, but can be addressed.

No one would sanely deny that there aren’t risks.  But the key question is are those risks a deal breaker or can they be mitigated? I think they can be mitigated.”

See: TPP risks can be mitigated – expert

Well, he would say that, wouldn’t he? He’s a trade lawyer specialising in international investor-nation disputes.

Interestingly, Mr Kalderimis also commented that,

While people pointed to the possibility that Philip Morris could sue New Zealand over tobacco laws, “Philip Morris can already sue New Zealand“.

See: IBID

Yes, that is true. Just as Philip Morris Asia Ltd  sued the Australian government last year.

The one difference that Mr Kalderimis conveniently forgot, in a John Key brain fade moment, is that such corporations can only currently sue within our own jurisdiction, under our own laws.

Under the TPPA, an investor-nation lawsuit will be conducted using  secret, foreign tribunals.

This is what National is negotiating to achieve.

And this is what 50 short-sighted, self-serving, and misguided people are supporting.

Addendum II

The TPPA is perhaps the single most important political policy National is undertaking.

If anything in this blogpost concerns you, I encourage you to do the following,

(1) Write to the Prime Minister and express your concerns. Email him at: john.key@parliament.govt.nz

(2) Share this blogpost with your friends, family, workmate, etc. The more folk who know what is going on, the more chance we have of stopping this dead in it’s tracks.

(3) Write a letter to your local newspaper and demand to know why the TPPA negotiations are being held in secret. What are they hiding? Why are they hiding it? If it’s so good for us – wouldn’t the Prime Minister be the first to tell us?

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nikki kaye - yeah right

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Sources

NZ Herald: Businesses launch PR campaign to fight TPP ‘scare-mongering’

NZ Herald: Open letter to Prime Minister

NZ Herald: TPP risks can be mitigated – expert

NZ Herald: Jane Kelsey: Pacific deal masks bigger plan

Additional

U.S. To Consult Internally On Ag Export Competition; Next TPP Round Set For New Zealand

Groups

Pro TPPA: Trade Works

Anti TPPA: It’s Our Future

Office of US trade Representative: Outlines of the Trans-Pacific Partnership Agreement

NZUS Council: Kiwi businesses out in support of TPP negotiations

Wikipedia: New Zealand–China Free Trade Agreement

Wikipedia: North American Free Trade Agreement

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