Monday, May 30, 2016

New Zealand Inc Exposed

When John Key was questioned regarding New Zealand's green credentials on BBC's Hard Talk some years ago he focussed on appearances rather than the reality that New Zealand scientists were reporting:

" go and breath the air and you walk up a mountain, I'd argue with you that if you don't believe that it's clean and green, then show me a country that's cleaner and greener..."

New Zealand has relied heavily on the images in the Lord of the Rings and Hobbit movies and the environments that our tourists generally experience to enhance our global brand. Appearance is everything. Our reputation regarding corruption, education, health care and social justice (where we have often led the world with liberal thinking) and the provision of public services is largely positive too. The perceptions of a clean, liberal and egalitarian society continue.

We are a relatively small country in terms of population with an abundance of natural resources, both on land and in our extensive territorial waters. We should have more than enough collective wealth to share around and be the ideal country to raise a family. For New Zealanders on good incomes (and who own their own homes) this country is still a great place to live. Mike Hosking has a dominating media presence and represents the views of a growing affluent class in this country. His material wealth and life style is little different from Hollywood film stars. New Zealand is a great place to live if you're rich.

Those who have the greatest influence on policy and government spending largely live similar lives to Hosking. However, the New Zealand experienced by increasing numbers of ordinary New Zealanders is something that they are physically and emotionally detached from. Research has shown that empathy decreases as affluence grows and the disdain for the poor and low income families from this Government is growing more evident in every budget.

Visitors to New Zealand are attracted to the pretty places and the playgrounds of New Zealand's rich and most will not see or hear about the other side of the nation once known as Godzone. Most will not be aware of the decaying underbelly of our environment and society.
Our international image may still be a good one but it is largely built on our past reputation and well constructed PR. Our current Government approaches its role in a corporate way rather than seeing its purpose as serving the needs of the people. The proposed change of flag was more about branding than nationhood. Decisions around welfare are approached fiscally with the priorities of reducing costs and balancing the books rather than addressing need. The value placed on people and the environment is dependent on their impacts on balance sheets. 

New Zealand Inc is promoted through greenwash and glossy PR. It has an exploited workforce and its main exports are environmentally compromising. Sustainability does not appear in any business strategy and it specializes in producing low value commodities to anyone who will buy them. New Zealand Inc should clean up its act and become an honest trader again. It should be a business that values and honours its social licence to operate. 

Thursday, May 26, 2016

Budget Solves Housing Crisis

On first reading the 2016 Budget did not appear to have a substantial focus on housing, but closer analysis of the spending priorities reveals the Government's strategy.

Housing has created a huge ideological problem for National. The party does not support a large state housing sector and is not prepared to take on the responsibility of increasing the supply of social and emergency housing.

I can imagine the consternation and frustration within National's cabinet in dealing with the growing evidence of a housing shortage and surveys and polls showing increasing numbers of voters expressing dissatisfaction at the Government's performance in this area. I believe that Judith (Crusher) Collins may have come up with a solution. As the restored Minister of Corrections she has been determined to put public concerns regarding conflicts of interest and her close relationship with Cameron Slater behind her as she grows her power base again.

Ministers must compete against each other for a share of the budget to finance their portfolios and the $355 million increase for prisons is a huge win for Collins when one compares that to the $258 million being provided for social housing. 4,585 individuals and families are on Housing NZ's priority waiting lists and yet the money set aside to address the demand will only build a paltry 750 houses in Auckland.

Collins is clearly building a corrections empire and although her earlier attempt at privatising prisons was a failure she is keen to grow the status of the portfolio. It costs around $100,000 a year to keep someone in prison and while this may seem a lot of money it is probably much cheaper than providing social housing and all the wrap around services needed to support struggling families and individuals. The demands on mental health services are also increasing and the police have become the first line responders for those suffering from mental health episodes and police cells and prisons are already being used to house those with mental health disabilities.

By expanding the numbers that corrections manage it will take the pressure of housing and social services. The wonderful thing about prisoners is that many voters support the idea of punishment so that there is no expectation of quality care. Already double bunking cells are being considered and there is potential to add 5,000+ plus prisoners to the current 10,000 with little extra spending.

All the Government needs to do is remove all the homeless from the streets and put them in prison and a cost effective solution is found that doesn't challenge National's principles and can pave the way to future tax cuts. Of course the police will be much busier arresting more people and managing the increased paper work so that perhaps almost $300 million will go some way to supporting that.

Then there is the issue of those who may criticise the Government's unethical plans and the likes of Nicky Hager using his investigative skills to expose them. A beefed up GCSB would be needed to keep tabs on unwanted attention and $178.7 million would go a long way to achieving that.

Of course all this is purely speculation and intended as satire...

Saturday, May 21, 2016

Homelessness Finally Hits Middle NZ

It is likely that New Zealand hasn't experienced this level of homelessness and lack of decent housing since the depression. Even in 1905 the importance of state housing was recognised by Richard Seddon and his Liberal Government:

"...alarmed by growing reports of extortionate rents and squalid living conditions in the working-class districts of New Zealand cities, Seddon inteoduced the Worker's Dwellings Act. Its purpose was to provide urban workers with low-cost suburban housing, far removed from city slums and grasping landlords."

Up until 1991 the state housing stock grew to generally meet demand and totaled around 70,000 at peak. If we had continued on the same trajectory of state house building as we had from 1950 to 1990, we would have over 90,000 state houses now and a constant, ongoing, supply. Market rentals were brought in the 90s, around 8,000 state houses were sold off and underfunding has been the reality since. Well built state housing had created the supply of low cost housing for future generations and the state houses of the 40s are still seen as solid options for private owners compared to the leaky buildings of the deregulated 90s. The majority of new houses are being built for the affluent and we are consequently ranked third in world for the size of our homes.

Given that it is now common for multiple families to squeeze into a one three bedroom house and how many are forced to pay up to $400 a week to live in a garage, it does seem as though we have a back to the future scenario.

This Government has known since 2008 what the previous Labour Government had begun to address, New Zealand was falling behind in meeting the growing demand for social housing. Report after report has crossed the desks of National Ministers detailing the needs and describing system failures and have been deliberately ignored. The numbers of those on Housing NZ urgent waiting lists continued to grow despite tightening the criteria and it can now take up to two years to address an urgent housing need.

This populist Government understands that to remain in power it must retain the support of middle New Zealand. It has deliberately sought to spin the realities of welfare failures so that greater levels of tolerance for poverty can be achieved and less spending is necessary. The Government has been hugely successful as they have managed to restrict the funding and drastically reduce the capacity of the country's main provider of social housing.

Middle New Zealand have accepted the spin that the 43%+ of Pasifika families live in over-crowded homes because that is a cultural choice. Middle New Zealand comfortably swallowed the explanation that a large percentage of Housing NZ stock was not fit for purpose as it was the wrong size or in wrong place (despite the refusal to support the claim with evidence). Middle New Zealand largely accepted the suggestion that the Government is ill equipped to manage social housing (despite it doing so successfully from the 1930s to the 1980s). Middle New Zealand also appears to agree that our housing shortage is because city councils are not providing enough land for developers.

Middle New Zealand did not have first hand experience of the deliberate underfunding of state house maintenance (now estimated at $1.5 billion). The demand that the Housing NZ pay a $118 million dividend was generally accepted and the explanation that the dividend was necessary to "place a discipline" on the crown entity went without a protest from middle New Zealand.

Those protesting at the removal of state houses from prime real estate in Glen Innes were largely condemned by middle New Zealand and yet the 156 state rentals were going to be replaced by only 78. The plan to sell all the 1,500 state housing in Tauranga and Invercargill has not met large protests as middle New Zealand felt comfortable with the plans and those who were directly impacted were too frightened to say anything (trouble makers are likely to find themselves homeless).

There was some feeling of discomfort when it was revealed that the poor condition of a state house was implicated in the death of a young child, but it was presented as a maintenance issue rather than the tip of an iceberg. The 50,000 children who are being hospitalised annually because of poor quality housing mainly passed under the radar as these are not the children of middle New Zealand. I have heard it said that the problems are more likely to be caused by poor house management than a problem with the house itself as much of middle New Zealand has experienced living in uninsulated homes and survived. They forget that heating was cheaper, overcrowding wasn't an issue and many mothers stayed at home and kept the house warm during the day. Blaming the poor for their situation is encouraged amongst middle New Zealand.

The Green Party's announcement of a new policy to address the housing crisis included the plight of a mother who did not fit the generic picture of someone needing social housing. This mother was white and was obviously educated and articulate. She had been married and employed but a marriage failure and having to leave work to care for her seriously ill daughter had reduced her income and she found herself homeless. She needed to remain in Auckland to be close to the Starship Hospital but couldn't find anywhere to live. She could no longer adequately care for her sick child and nothing would be available for almost two years. Her only current option is her car.

Middle New Zealand is beginning to take notice...

Wednesday, May 18, 2016

The Brilliance of John Key

Leaders of other conservative governments look at John Key's continued popularity with envy. New Zealand's National Government has the same agenda as most other conservative governments and yet despite New Zealand's richest blatantly continuing to capture a greater share of the country's wealth and government services being increasingly reduced and privatised, the Prime Minister remains popular.

John Key's public persona has managed to capture populist elements that have made Donald Trump so successful but is moderated by a slick PR team and constant polling. The dismantling of our welfare state has been a gradual one but to get to our current point where livable wages are no longer considered reasonable and decent housing is not a human right, is quite an achievement.

John Key's government has managed to continue the work begun by Ruth Richardson and has obviously learned from Jenny Shipley's mistake of not ensuring public acceptance of drastic welfare change. Ruth Richardson's Mother of All Budgets is regarded as the most significant step in dismantling our welfare state. Drastically cutting welfare benefits was a deliberate strategy to drive down wage costs. It was Richardson's belief that maintaining unemployment at around 5% and keeping welfare payments low, workers would then be more likely to accept lower wages. Child poverty was around 8% pre 1991 but escalated to 15% by 1992. While there was some reduction under the previous Labour Government, with the introduction of the Working for Families tax credit, child poverty is now close to 30% in 2016.

The dismantling of labour laws in favour of individual contracts and limiting the number of collective agreements effectively destroyed the power of unions in the private sector to the extent that only 20% of our workforce is now unionised. The balance of power has been successfully shifted in favour of employers. There is now a pervasive belief that workers should be grateful for any employment opportunity (regardless of the conditions) and that demanding living wages and certainty of income will place unnecessary pressure on the economy. The fact that productivity has increased far faster than wages is an indication that the value of labour in achieving productivity gains is not being recognised. A large casualised workforce that is available on demand for minimal wages is the current industrial reality.

The subtle shift to a Government that spends more on corporate welfare than addressing social need has been hugely successful. We now have a growing demographic called the working poor that cannot survive without the support of Working for Families (WFF), an accommodation supplement and reliance on food parcels. The Government now spends more on subsidising wages and landord's incomes than it does on traditional welfare spending. In 2016 the combined spending to subsidise these two is likely to be around $6 billion. It is being left to NGOs like the Salvation Army and other charities to fill the gaps that were once the Government's responsibility. Food banks were largely unnecessary before 1991 and now they have become an essential institution for the survival of many, 150,000 parcels are being distributed annually. Those who need a safety net to manage unfortunate circumstances have to endure unnecessary stigmatisation and the embarrassment of asking for charity. Most want "a hand up" rather than a "hand out" as it is now perceived.

John Key's popularity continues despite growing evidence all around us that we have become an increasingly unequal society. Homelessness is very visible in our cities' streets, domestic violence is a growing problem (almost 300 callouts a day) and the health effects of child poverty causes 40-50,000 admissions to our hospitals every year. Our prison population is also growing, we are close to reaching 10,000 prisoners, which gives us one of the highest incarceration rates in the world (worse than Mexico). Our growing numbers of mental health sufferers are more likely to end up in a police cell than receiving support from underfunded health providers.

The Government clearly has a responsibility for child health, social housing and reducing criminal offending and yet John Key and his Ministers have enthusiastically used the blame game to shift that responsibility. It is suggested that child poverty is because of poor parenting, the lack of housing is because of local authorities not making land available to developers and better teaching will create more responsible, work ready citizens. This approach reduces the expectation that more Government spending is the answer and the Government's public service mantra of delivering more for less is the result.

New Zealand's working poor work in our rest homes, our early childhood centres, in our farms and our orchards. They are found in our fast food outlets, supermarkets, fish factories and clean our houses. Many are under-employed or work multiple part-time casual jobs to make ends meet. A large number of our poor are women and many are sole parents. They live in cars, garages or overcrowded, substandard houses. The majority of our poor are Maori and Pacifika or migrants on work visas. 30% of our children live in homes where incomes do not allow them to have their basic needs met. Most of these families feel powerless because livable wages are unobtainable and getting government support is often too difficult or takes too long, many give up.

The wealthy of New Zealand applaud Key's determination to keep taxes low and keep the property bubble inflated and donations to the party flow in from all those benefiting from limited market interference. "Facilitation payments" are now becoming common practice and business interests appreciate the easy access to the PM and his Ministers. Many in middle class New Zealand have also bought into the culture promoted by the wealthy champion of "middle New Zealand" Mike Hosking, suggesting that people create their own destinies and welfare just encourages dependency. Sadly this satirical send up of Hosking is not that dissimilar from his own or many views being publicly expressed.

Extreme wealth and poverty are now generally viewed as realities in New Zealand that must be tolerated rather than solved. The rich and middle class vote and the majority of our poor and migrant workers don't or can't. John Key's brilliance has been seen in his ability to keep the voting public onside as he creates a new New Zealand based on PR rather than fact. He may not have changed the flag, however his real legacy will be to create extreme inequality in a land of plenty.