Gaming machine operators earn 74 per cent of their revenue from the most deprived areas while giving them only 12 per cent of the grants. Photo / Andrew Warner, File
Gaming machine operators earn 74 per cent of their revenue from the most deprived areas while giving them only 12 per cent of the grants. Photo / Andrew Warner, File
Opinion by Kushlan Sugathapala
OPINION
“We typically don’t talk about poverty as a condition that benefits some of us,” is the provocative argument made in Matthew Desmond’s book Poverty, by America.
While lax regulations in the US encourage extreme exploitation, New Zealand has the same problems. Poverty is fostered by those exploiting the poor,governments doing too little, or, worse, adopting anti-poverty policies.
It’s not just corporations thriving on poorly paid, insecure, non-unionised labour. We are complicit as we stand by, invest in, or buy from exploitative industries and vote for parties with pro-poverty policies.
A whole ecosystem feeds on exploiting the poor, from predatory lenders to fast food restaurants to the gambling industry. And our governments are woeful at protecting them; the voices of the poor are drowned out by powerful lobbies protecting the industries and the rich.
None of us would go hungry if we really were a family of five million; New Zealand produces enough food to feed 45 million people. Yet, one in 10 children lives in material hardship - meals lacking nutrition, missing meals, cold houses, delaying visits to doctors, etc. It’s almost one in five Māori and one in four Pasifika children. After housing costs, 600,000 New Zealanders live below the poverty line i.e., less than half the median wage.
Since 1985, our tax policies have made the poor poorer and the rich wealthier. Welfare benefits were slashed. We made homeowners and landlords wealthier, corporations more profitable, and unions weaker. Increased unemployment and made jobs more insecure.
Desmond said the poor may be invisible to us but not to some corporations and entrepreneurs. Payday lenders charge interest of 500 per cent or even higher. In 2021 the Labour Government passed legislation to curb some of the worst excesses, but it didn’t limit the interest rates (Australia set the maximum interest rate at 48 per cent).
Buy-now, pay-later companies arrived with opaque penalties and lax credit checks and are expanding into basics like liquor and food.
An Auckland University study found fast food and takeaway outlets are four times as many per head of population in low deciles than in affluent areas, increasing obesity and diseases like diabetes. Professor Boyd Swinburn called on councils to use zoning regulations to prevent further proliferation.
Britain’s Conservative Party has been far more progressive than our Labour Government, introducing a sugar tax, calorie counts on fast food menus, and a ban on junk food advertising before 9pm across all media, including social media and Google searches.
Kushlan Sugathapala. Photo / Supplied
The largest concentration of pokie machines is in the most deprived areas – 63 per cent in deciles 7-10, only 7 per cent in deciles 1 and 2. Gaming machine operators distribute 40 per cent of their takings to sports and community projects; they earn 74 per cent of their revenue from the most deprived areas while giving them only 12 per cent of the grants. New Zealand’s regulatory proposals fall short of international best practices, for example, only proposing locating ATMs outside pokie rooms. In Victoria, they must have limits – a maximum of $200 for a withdrawal and a daily limit of $500.
Shortage of social housing and high market rents is a massive and growing problem. The Labour Government added just over 5000 state houses over the past five years while the waiting list surged from 14,000 to 24,000 homes. National’s record was even worse - a decrease of 6000, selling state houses despite a shortage.
The Accommodation Supplement for a family with children averages $200, while the national median rent is $560. The shortfall eats into an already inadequate benefit. Worse, it’s not indexed to wages or inflation; the only increase over the past 15 years was in 2018.
Former UK Ambassador Laura Clarke said we have Scandinavian ambitions but a US attitude to tax. Our tax system is one of the most extreme globally.
Unsurprisingly, the wealthiest New Zealanders pay only 9 per cent tax, less than half of what the average mums and dads pay. We are the only country in the developed world that doesn’t have a Capital Gains Tax.
Our GST, which includes food, is the highest effective rate in the developed world.
We are the only country (outside the US) that taxes income from the first dollar. It’s not just higher wages that attract our talent to Australia; it’s also lower taxes for low-income earners and the young. And higher prices due to weak competition policies. Multi-national corporations pay little to no tax due to weak regulation, and it’s not just the tech companies; it’s everyone.
A NZ Herald investigation in 2016 found Mobil and Caltex paid only $4m in taxes on $5b in annual revenues. Apple paid no tax, operating for 10 years with $4b in revenues.
Solutions are there; let’s stop demonising the poor and give a hand up to those who start the race of life 50m behind the rest of us.
- Kushlan Sugathapala is a researcher and writer on social justice issues.
