When redundancies - a word we had never heard of - soon became all too common: Shane Te Pou

As job losses rose from the mid-1980s to the late 1990s, income inequality rose more rapidly in New Zealand.

OPINION

People who read this column will know that I was born and bred in Kawerau. My father was a mill worker and my mother worked at the local fish and chip shop for some 40 years.

I was born in 1966 and, on reflection, the 60s and 70s were probably the best time for New Zealanders. The unemployment rate in 1966 was 0.1 per cent. It would remain below 1 per cent until 1978.

Everyone had a job and I can’t recall gangs being a thing until the early 80s. Pretty much everyone went to school and there was a strong sense of community. We looked after each other.

Not everything was perfect but I remember when economic reform, Rogernomics, was introduced in 1984. A word we had never heard of soon became all too common: redundancies.

Across New Zealand, big employers lost tens of thousands of jobs – often all at the same time and in the same place. Within 20 years, Kawerau, which had nearly full employment, saw hundreds of men and women being laid off. The town centre, once bustling with people, became quiet as most people didn’t have work.

Between the mid-1980s and the late 1990s, income inequality rose more rapidly in New Zealand than in any other developed nation, according to Max Rashbrooke, author of many books on this subject. Crime increased and gangs became more prevalent. Men and women in their 40s were made redundant and many of them never worked again. Their children also struggled to find work and, sadly, this trend continued with their mokopuna.

The shock therapy of reform left far too many Kiwis behind. To use a military phrase, they were the “acceptable losses” of economic change. It took a generation to recover. In recent years, more work, along with better pay rates and career prospects, became available in Kawerau. The dairy and horticulture industries, along with iwi investment, finally saw the economy and hope on the rise.

However, in 2024, we are seeing the introduction of policies that will lead to increased unemployment. Removing the employment mandate from the Reserve Bank will see rising unemployment disregarded if prices rise. The reintroduction of 90-day trials will lead to more insecure work. Deep cuts to public services will remove thousands of jobs, often the keystone, secure jobs in locations still doing it tough after the economic violence of the 1980s.

Unemployment is currently 3.9 per cent. But the reality is that, in provincial New Zealand, among Māori and Pasifika communities and for young people, that would be considered an unachievable aspiration. Unemployment is currently north of 8 per cent for Māori and Pasifika; 11 per cent of people aged 15-24 aren’t in education, employment or training. Small changes in the general level of unemployment often hide levels that are simply unacceptable in communities already struggling to get by.

We are at risk of watching while history repeats itself – the first time as tragedy, the second time as farce. This week, global insurer Coface said “the economic challenges faced by New Zealand are exacerbated by the policy decisions of the new conservative coalition Government” with “a looming risk of rising unemployment”. In December, the Treasury was predicting unemployment to rise to more than 5 per cent, and that was before the cutbacks from National’s programme started.

All of this suffering is completely predictable – and avoidable. We have been here before. This recipe didn’t work in the 1980s and doesn’t work now. The deflection of blame onto beneficiaries has already started, with Social Development Minister Louise Upston saying we have a “culture of benefit dependency”. Next it will be “back-office bureaucrats” who are to blame. Then unions. Meanwhile, the risk is that communities like Kawerau head backwards again – with no support.

There is still time to change. Fiscal responsibility goes both ways – governments have to be responsible in choosing when to spend and when to save. Reducing job and income security for workers doesn’t make anyone better off save a very select few. Getting New Zealand “back on track” shouldn’t involve taking the train back to 1984.

Shane Te Pou (Ngāi Tūhoe) is a commentator, blogger and former Labour Party activist.