Does New Zealand have an obsession with inequality? Is this a good or bad thing? And what are the solutions to inequality?
If New Zealand was to have a statue at the entrance to Auckland or Wellington harbour, it would likely be a "Statue of Equality" rather than liberty. That's because New Zealand has a long-standing political culture of caring very strongly about equality. This was the view in the 1940s of visiting American political scientist, Leslie Lipson. Lipson's observation remains true today and, whereas in the US all politicians have to at least pay lip service to defending liberty, here politicians have to acknowledge and show concern about inequality.
Over the last seven years, the focus and concern with issues of economic inequality has skyrocketed in New Zealand politics. This year will be no different, and there will be a useful politicisation of the issue, even if the proposed solutions don't seem up to the size of the problem.
The Oxfam report on wealth inequality
Given the New Zealand public's strong interest in economic inequality, it's not surprising that this week's Oxfam report on "An economy for the 99 per cent" has created plenty of headlines and debate. One of the best news report on this is Nicholas Jones' Two Kiwis wealthier than the poorest 30 % - Oxfam. Jones reports that "According to the Oxfam research, the richest 1 per cent of Kiwis have 20 per cent of the wealth in New Zealand, with 90 per cent of the population owning less than half of the country's wealth."
Another useful report on Oxfam's findings is Catherine Hutton's Top 1% of NZers own 20% of wealth. She adds that "Oxfam is not the only organisation to measure household incomes. Every year Statistics New Zealand publishes its Household Net Worth Survey. The 2015 survey, published in June last year, found the country's household wealth was concentrated in the top 20 percent of households, which held about 70 percent of total household net wealth."
And for further details about measures of inequality, see Andy Fyers' The truth about inequality in New Zealand.
Challenges to the inequality report
But the Oxfam report hasn't gone unchallenged - both in terms of its methodology and the politics underlying its production. The New Zealand Institute's Eric Crampton thinks that wealth inequality isn't a problem in this country: "And so Oxfam's focus on wealth inequality is strange. It is entirely appropriate to look closely at wealth inequality in countries where tinpot rulers immiserate their citizens for the benefit of themselves and their ruling cliques" - see: Oxfam and inequality again.
Crampton also challenges the way that Oxfam has used the assets of individuals, including houses and debts, to measure their wealth, with little regard to whether that wealth is useful to society. He points out: "If you have net assets of $744,400 USD ($1.05m NZD), you're in the world's Top 1%. Auckland's average house price cracked the million mark last September. So if you own the average house in Auckland, debt-free, that likely puts you into the world's Top 1%. About 272,000 Kiwis are in the world's Top 1%" - see: You may be in the global 1%. See also the profile, Eric Crampton, economist and original, written by Philip Matthews.
Others on the political right have essentially looked at the report and said "so what?" David Farrar has suggested that there's nothing intrinsically wrong with increasing concentrations of wealth, and that billionaires like Richard Chandler are not harming anyone with their amassed money: "Oxfam is basically a socialist campaigning organisation. Chandler has made almost all of his money overseas. So how does a NZer being successful overseas harm people in New Zealand? Maybe Oxfam thinks we should do what has failed in every country that has tried it and confiscate wealth (not income) and redistribute it. So take the $13 billion Chandler and Hart have and give it to the poorest 1.5 million New Zealanders. They would then each have $10,000 wealth - hardly life changing" - see: So does Oxfam think wealth should be confiscated?.
For other views from the right published recently, but before the Oxfam report came out, see Martin Robinson's Inequality is a matter of choices, and Martin van Beynen's There is no inequality crisis.
In the latter column, van Beynen argues that "the Government can go only so far in engineering a new society without creating a whole lot more unfairness and disincentives to people taking responsibility for their decisions and paying their way." Furthermore, "As the election nears, those of us who are interested are going to have to think hard about what sort of society we want. My worry is that the eat-the-rich crowd will tap into unfounded fears about an unequal society to drain the lifeblood of a go-ahead society."