Since the Labour Party came to power, the number of those in poverty has increased significantly. This is the finding of a recently released government report which comprises the most comprehensive study ever into New Zealand living standards. The Ministry of Social Development carried out their research in 2000 – shortly after Labour was elected to government – and again in 2004. The results show that there are now about a million New Zealanders living in hardship, while about 250,000 can be categorized as suffering ‘severe hardship’. Of the later category, there has been a significant increase – the proportion of the population that suffers 'severe hardship' rose dramatically from 5% to 8%. Severe hardship' amongst Maori rose from 7% to 17% in Labour’s first four years in office. If widened to the more general category of living standards, 40% of Maori are deemed by the Ministry to be experiencing hardship. For Pacific people, the level of ‘severe hardship’ has climbed during the four years from 15% to 27%. More generally, 58% of Pacific people experienced some degree of hardship.
Since the Labour Party came to power, the number of those in poverty has increased significantly. This is the finding of a recently released government report which comprises the most comprehensive study ever into New Zealand living standards. The Ministry of Social Development carried out their research in 2000 – shortly after Labour was elected to government – and again in 2004. The results show that there are now about a million New Zealanders living in hardship, while about 250,000 can be categorized as suffering ‘severe hardship’. Of the later category, there has been a significant increase – the proportion of the population that suffers 'severe hardship' rose dramatically from 5% to 8%. Furthermore, between 2000 and 2004 there was a 20% increase in beneficiary families with children that suffer severe or significant hardship – now up to nearly two-thirds of the beneficiary population.
Unsurprisingly, Pacific Island and Maori households are disproportionately affected. The report showed Maori and Pacific people have substantially lower living standards than the population as a whole, and these living standards have been quickly worsening. 'Severe hardship' amongst Maori rose from 7% to 17% in Labour’s first four years in office. If widened to the more general category of living standards, 40% of Maori are deemed by the Ministry to be experiencing hardship. For Pacific people, the level of ‘severe hardship’ has climbed during the four years from 15% to 27%. More generally, 58% of Pacific people experienced some degree of hardship.
Shockingly, the Labour Government says the report paints 'a largely positive picture'. Furthermore, they claim that their Working for Families package introduced since this study was undertaken will have improved the situation, yet as Green MP Sue Bradford has rightly pointed out, most of those suffering severe hardship are in fact beneficiaries who would gain little from Working for Families.
This latest research comes on top of last year’s New Zealand Income Survey which showed that the average weekly income for wage and salary earners last year was only $592, or $30,784 per annum. And figures published in the Dominion Post show that while inflation ran at 3.4%, workers’ wages increased on average by just 3.1% in 2005.
In the context of the intensifying immiseration of many New Zealanders, the Government’s latest call for wage restraint is particularly galling. Finance Minister Michael Cullen has insisted that, ‘We cannot afford large wage and salary increases across the board ... Unfortunately that does mean you can’t expect wage and salaries to compensate you for what are major shifts in relative prices over which we ourselves have no control’.
Meanwhile, many New Zealanders have been doing very well. In April the New Zealand Herald published a story to show that the richest CEOs in the country had for a second year received massive pay increases, this time averaging 23%, meaning that for the first time the average salaries of the top 44 CEOs had surpassed the $1m mark, with some earning around $3m a year.
Essentially the country has been experiencing a significant transfer of wealth to the rich since Labour’s election. Yet, New Zealand was hardly an egalitarian nation before Labour came to power. According to a 2000 report commissioned by the Treasury, New Zealand had developed one of the highest levels of income inequality among OECD countries. The report found that while the incomes of those in the middle and lower sections of society fell between 1982 and 1996, the wealthiest 10% of households acquired significant incomes. It was in this period that the Fourth Labour Government came to power and introduced its infamous market reforms that comprised an attack on the living standards of most employees, which were then continued by the National Government of 1990-99.
It is important to note that this latest wave of immiseration has again occurred under a Labour Government. Yet this time Labour has been governing under relatively strong economic growth. So while economic conditions for a substantial proportion of people have been worsening under Labour, there has in fact been record private sector profits and a sharemarket boom.
Although Labour was elected by posing as a centre-left party, these latest statistics give further evidence that the rich have got richer at a greater rate than even during National’s hated nine-year reign. And, of course, as has become usual under Labour, the poor have got poorer.