Categories
Criminal Justice

How Norway turns criminals into good neighbours

https://www.bbc.com/news/stories-48885846

Categories
Criminal Justice

Why Scandinavian Prisons Are Superior

https://www.theatlantic.com/international/archive/2013/09/why-scandinavian-prisons-are-superior/279949/

Categories
Criminal Justice

New Zealand’s broken prison system – Will the flames of Waikeria spark a change?

“It is more than 30 years since two landmark reports- proposed transformative changes to Criminal Justice in       New Zealand.       In the decades since, there have been many reports and reviews;  none have led decision-makers to undertake fundamental change”– The Safe and Effective Justice Group(S&EJ), appointed by the Cabinet of Ministers – New Zealand

The Siege

Tuesday 29th December 2020, most New Zealanders were on holiday. COVID free and enjoying the festive season, we flocked to overcrowded beaches and holiday spots.

A group of inmates in a high-security prison in the remote town of Waikeria felt anything but festive. The 109-year-old jail, to be demolished in 2022 and neglected, was to them in an intolerable condition. Amid rising violence, a tinder keg, waiting to explode.

Prison staff received a call from media that a riot might erupt, found nothing untoward, went back to their lunch; soon after, a few fires lit up the exercise yard. The prisoners climbed on the roof and set the rooftop ablaze with burning mattresses. Flames lit up the night sky, an inferno seen from miles away. Seventeen prisoners barricaded themselves and raided the weapons room.

Sirens screaming, firefighters, ambulances and police rushed in; followed by the Prisons’ riot management team and the Police Armed Offenders Squad. The armed offender squad stormed the prison lobbing tear gas grenades and firing rubber bullets. The defences held.

The inmates had leftover food in the kitchen and ‘brown’ drinking water. Set themselves up for a siege, “as long as necessary to be heard,” and issued a manifesto of demands calling the conditions in prison “appalling”.

The CEO of Corrections (Prisons), Jeremy Lightfoot, denied the poor conditions “no complaints received”. The Minister for Corrections, Kelvin Davis, refused to get involved until the incident was over, “an operational matter”. Opposition Party MPs were denied access to the prison. Maori Party MP Rawira Waititi called out the government “let an inhuman environment fester and breaches of basic human rights to occur”.

The prisoners’ families called for the media to be permitted into the prison to counter what they called a false narrative. “They are being treated like animals, only want fair treatment and clean drinking water. They got brown water and stale bread on Christmas day”.

“They got brown water and stale bread on Christmas day”.

The siege dragged on. The prison management adopted an aggressive and much criticised ‘starvation’ strategy of withholding food and water. There were no hostages involved to warrant a softer approach. Passions ran high on both sides of the debate in mainstream and social media.

MP Rawiri Waititi stepped in to negotiate. Let into the prison finally, “after being blocked everywhere I go” and saying, “if the situation turns to custard, it will be entirely the government’s responsibility”.

After a tense six-day standoff, the prisoners surrendered and walked out with MP Waititi. The high-security prison was destroyed and, for some, the reputation of Corrections. Was this a wanton act of destruction by a group of violent men? A cry for help by people at their wit’s end? Or even a noble act of sacrifice to call attention to a severe problem with our prisons.

Was this a wanton act of destruction by a group of violent men? A cry for help? Or even a noble act of sacrifice to call attention to a severe problem with our prisons.

The Maori

The treaty of Waitangi in 1840 promised Maori control over their land and equal status as the European settlers. However, just five years later, the settlers appetite for land led to the Land Wars. When the fighting ended, the Maori had lost 90% of their land. By 1896, an estimated 75% of their population were lost, to war, western diseases and alcohol. Relegated to a subsistence existence, the Maori started migrating to urban areas.  They arrived without land, capital and little education. The work they found were low paid, dirty and arduous.

When the war ended, the Maori had lost 90% of their land. By 1896, an estimated 75% of the population was lost to war, western diseases and alcohol.

Only 3% of the prison population was Maori at the turn of the 20th Century when the urban migration started. It reached 21% in 1945. Urbanisation accelerated after the 2nd World War, as did incarceration rates. From 1955 numbers of Māori in prison increased dramatically, reaching over 50% of the prison population consistently from 1980, while only 15% of the population.

Celia Lashley’s book ‘Journey to Prison’ outlines the complexities of why high numbers of Maori end in prison. Poverty, mental health, family violence, crime-prone environments, family influence, drug prevalence, and gangs. The challenges faced getting out of the prison system. Critics argue that the justice system is stacked against Māori at all stages. They are more likely to be arrested, charged, convicted and imprisoned.

Māori in prison are over 50% of the prison population consistently from 1980, while only 15% of the population.

The Poor

 “Most prisoners come from neighbourhoods and regions with the lowest deprivation indexes and the highest negative statistics in social policy areas. 50 per cent of people convicted of offences in 2013 lived in the 20 per cent most deprived areas of New Zealand.” – S&EJ

New Zealand’s economy was liberalised in the 1980s. The changes were radical and ideology-driven. Taxes on the wealthy were reduced substantially while welfare benefits were slashed. Housing costs and poverty rates soared.

Dr Elizabeth Stanley, Director of the Institute of Criminology at Victoria University, was critical of the government. “Our best research tells us that crime, including family violence and youth crime, is linked to poverty and inequalities. Many options are already on the table—social assistance reforms, reconfigurations of child support, increased social housing, liveable wages. There is no poverty of ideas. Instead, the political challenge seems to lie in ‘poverty of responsibility…the poverty of caring’. We encourage the government to step up and take responsibility.”

50 per cent of people convicted of offences in 2013 lived in the 20 per cent most deprived areas of New Zealand

Our benefits are among the lowest in the developed world. While the Labour government has increased the minimum wage, their attitude towards beneficiaries is far from kind; working and non-working are treated very differently. Some poverty measures improved in 2020, presumably due to the increase in minimum wages helping the working poor.

The Mentally Ill and the Addicted

Weknow that the mental health system is broken, as is the justice system.If the health issues, and then mental health issues, had been dealt with, they (prisoners) might not have ended up where they are.” –S&EJ

“62% of prisoners have been diagnosed with mental health or substance abuse disorder within the last 12 months, of those diagnosed only 46% have received treatment” –Chester Borrows, Chair of S&EJ

At Waikeria, around 75% of prisoners reported inadequate support for mental and emotional issues. Over 85% said no help receive with their drug and alcohol problems. Anecdotal evidence suggests over half of the crimes are committed under the influence of drink and drugs.

Over 85% said no help received with their drug and alcohol problems.

Rehabilitation

At Auckland Prison, the Ombudsman found that prisoners spent less than an hour per day on rehabilitation programs; maximum security prisoners got only three minutes per day. Prisoners received approximately half-hour per day of education, with this figure dropping even further for the high security. The people who need help most get the least.

We spent only 3 minutes per day rehabilitating maximum security prisoners.

Recidivism – out of prison and heading back to crime

If you are sentenced to prison once, you are forever a convicted criminal; your name never comes off the Convicted Criminals database. The Clean Slate Act only applies to lighter crimes. Many employers do pre-employment checks for criminal conviction. 60% of prisoners are convicted again within two years, a statistic that has only gone up in the past two decades. Many five-year plans have come and gone without making any impact.

Paying for their crimes

We pay our prisoners princely sums of between 20 and 60 cents an hour. They are expected to pay for basics like tea and coffee, even toothpaste, toothbrushes and shaving kits, phone calls to families at commercial prices.

The Politics

Politics and sensationalism around a few violent crimes,  ‘prison populism’, rather than evidence, have driven our laws and prison policies over the past three decades. Dr Wayne Goodall, the Principal Strategic Analyst for Corrections, outlines in his report how law changes reacting to specific incidents have increased the prison population.

The sentenced prison population increased 360%, from 2,000 in 1985 to 9195 in 2017 (before dropping to 7,383 in 2020).

The Inspection

The Chief Ombudsman’s team inspected the Waikeria prison in 2019 and reported. The cells in the high-security wing were ill-ventilated and uncomfortably hot. Cells were rundown and had significant amounts of graffiti. Designed for a single prisoner, they were double-bunked and cramped, inmates unable to sit upright on the bottom bed due to proximity to the top bed. The toilets had no lids. All meals except lunch were delivered to the cells. They ate their meals on the bunk beds near uncovered toilets, unsanitary and inappropriate. The bedding was in poor condition: stained, lumpy and torn pillows, torn mattress covers.

They ate their meals on the bunk beds near uncovered toilets, unsanitary and inappropriate.

Prisoners segregated due to behaviour issues were locked up 22 hours a day, with no time to address these issues. Prisoners had nothing to do all day—conditions deplorable and no improvement since the previous inspection in 2016.

High levels of gangs and violence – a third of prisoners reported being assaulted in prison; most didn’t report fearing consequences.

Dinner was delivered as early as 4pm—some meals were of poor quality. No access to hot water; they made their hot drinks and noodles from hot water in showers. Drinking water was discoloured and cloudy.

No access to hot water; they made their hot drinks and noodles from hot water in showers. Drinking water was discoloured and cloudy.

The gym was poorly ventilated, equipment old and rusty, toilet blocked and dirty, showers were broken. The exercise yards were shabby, with green mould and graffiti.

Libraries facilities are limited, mainly stocked with books discarded by the public libraries. Prisoners in the high-security wing could not request books from the library; what reading material available was unsuitable. They had no access to educational opportunities.

“The High-Security wing is not fit for purpose”.

Norway

BBC’s Emma Jane Kirby wrote about her visit to Norway’s maximum-security Halden Prison. “Can you feel the stretch?” she gently asks a heavily tattooed man as she settles his ruffled T-shirt and smoothes his back with her hand. It could be a yoga class at any health retreat anywhere in the world. “It calms them,” says prison governor Are Hoidal approvingly. “We don’t want anger and violence in this place. We want calm and peaceful inmates.”

Set in beautiful blueberry woods, peppered with majestic silver birch and pine trees. Accommodation blocks and chalet-style buildings of Halden Prison look like a trendy university campus rather than a jail. Each cell has a bed, a small fridge, a bookshelf, a TV, a desk and chair, plus a private bathroom including a shower, a toilet and a sink. There is also a music studio –”Criminal Records”, a garden, a holy room, gym, training room, library, computer room, family visiting house and more. A school offers an opportunity to get a proper education.

A prison officer on a silver micro-scooter greets us cheerily as he wheels past. Two prisoners jogging dutifully, keep pace. Hoidal laughs. “It’s called dynamic security!” he grins. “Guards and prisoners are together all the time. They eat, play volleyball, do leisure activities together, and that allows us to really interact with prisoners, to talk to them and motivate them.”

In Scandinavian countries, the focus is on rehabilitation from day one. Finding employment and adjusting to life in the community are the most critical elements for successful reintegration. The prison conditions are kept as normal as possible. The prisoners wake up by 7 am, can stay up late. Relationships with staff and other prisoners enhance normalcy.

Perhaps the most crucial factor for keeping people out of prison is employment. Prisoners choose from a range of jobs available in prison. They are paid regular wages (In New Zealand, prison pay rates are between 20 and 60 cents per hour!) and encouraged to develop skills. Academic opportunities are also provided as most prisoners have a low education level.

In Norway, the prisoners are paid regular wages; in New Zealand, pay rates are between 20 and 60 cents per hour

Norway’s prison changes are a recent phenomenon following radical reforms in the 1990s, which dramatically reduced reoffending from around 60% to 20% today.

Anglo-American countries have followed a punitive approach to prisons; the USA has the highest prison population globally. New Zealand has the 5th highest prison population rate among the OECD countries, at 199 per 100,000.

Most European countries have opted for a humane, rehabilitation-based approach; have the lowest incarceration and reconviction rates. Germany has a prison population of 77 per 100,000, Sweden 61, Norway – 60. New Zealand imprisons more than three times as Sweden and Norway.

60% of New Zealand prisoners are reconvicted within two years (for Maori New Zealanders, 68%). In Norway, it is 20%, Sweden 34%, Germany 40%.

The Safe and Effective Justice Group(S&EJ) issued their final report in December 2019, calling for radical changes, “gradual replacement of most prisons with community-based habilitation centres”. It warned that significant upfront investment is required. The Corrections Department’s Financial forecasts have no extra funding allocated.

“New Zealanders have delivered us a clear message: we cannot wait another 30 years.   We cannot afford another generation of hurt. To create the conditions for sustainable change.”-The Safe and Effective Justice Group

Is this message falling on deaf ears, water off a duck’s back? Is Hokai Rangi just another 5-year plan? Will the riot at Waikeria change anything?

The Corrections (Prisons) Department choose not to comment for this article. They did provide a majority of information requested under the Official Information Act.

Categories
unemployment

Jobs Guarantee Scheme

Call for a post-pandemic jobs guarantee scheme

New Zealand’s unemployment was less than 1% for 30 years from 1946 to 1976. Now the government, the Reserve Bank and traditional economists settle for 4% unemployment, as ‘full employment’.

This version of ‘full employment’ means 8% youth unemployment and 16% Maori / Pacific youth unemployment. Problems such as family poverty (including children missing meals), mental health, suicide, poor health and reduced self-esteem which accompany the lack of a job are barely acknowledged or debated there as to whether they are too high a price to pay.

Martin Taylor of progressive economic thinktank Digital Strategies who has been working on a jobs guarantee argues this could cost as little as NZ $1.6Bn, approximately 0.5% of GDP. And, this is more than outweighed by the benefits such as dignity of work, improved mental and physical health, improved social and environmental outcomes, boost infrastructure and care work.

Full article by Catriona MacLennan published on Radio New Zealand website, 29th April 2020.

https://www.rnz.co.nz/news/on-the-inside/415421/cat-maclennan-post-covid-19-job-guarantee-scheme-a-bold-solution

Categories
unemployment

Modern Monetary Theory (MMT) – Eliminating Unemployment

A plain-English guide to what it is and why it’s interesting

“There’s nothing to prevent the federal government creating as much money as it wants” -Alan Greenspan, former Chairman of Fed Reserve, USA

Stephanie Kelton, Professor of Public Policy and Economics at Stonybrook University argues that there is no harm in printing money, there will be no inflation as long as there is unused economic capacity or unemployed labour. Government spending can be used to boost the economy and eliminate unemployment. Inflation can be controlled either by reducing government spending or withdrawing money by increasing taxes.

Explains that highly publicized instances of hyper inflation in pre war Germany and Zimbabwe were due to lack of resources to boost economies, rather than printing money.

While traditional economists still haven’t accepted MMT, what many governments are doing since GFC is printing money.

Government spending can be used to boost the economy and eliminate unemployment.

Full article by Jim Edwards and Theron Mohamed in Business Insider , https://www.businessinsider.com.au/modern-monetary-theory-mmt-explained-aoc-2019-3?r=US&IR=T

Categories
Health

What’s behind New Zealand’s high suicide rate? It’s also the economics

Deaths of despair – Our youth are paying a high price for poverty and unemployment

Trigger Warning -This article contains material regarding suicide and mental health, that you may find disturbing.

“Every Life Matters… there is one goal at the core.

No suicides.

One death by suicide is too many. Every Life Matters”

David Clarke, Health Minister, introducing  Suicide Prevention Strategy NZ 2019-2029- Every Life Matters

Coming home, seeing your son or daughter has taken their own life. There is nothing that can prepare you for the shock. The grief, the guilt, life will never be the same. Darkness, depression. Strained relationships.

He was out of school for the best part of two years, despondent at not finding work, a stream of rejections, unsuccessful interviews. Money was tight since his father lost permanent employment. Work has been insecure since. The welfare benefits left little money on the table, if any, after paying rising rent and other essential expenses. It’s been tough.

New Zealand’s youth suicide rate is the highest in the developed world.

New Zealand’s economy started declining in the late 1960s when wool prices dropped. Then Great Britain, by far our largest trading partner, entered the European Common Market in 1973. EC agricultural subsidies meant access to lower-priced beef, lamb and dairy from Europe. This was followed by the OPEC oil price hike. Think Big policies by the Muldoon government failed to arrest the economic decline. 

Enter Rogernomics.

“For people who don’t want the government in their lives … this [Rogernomics] has been a bonanza. For people who are disabled, limited, resourceless, uneducated, it has been a tragedy.” –David Lange, New Zealand Prime Minister (1984–89), 1996

The Labour government came into power mid-1984, amid a deep economic crisis.  Roger Douglas, Finance Minister and chief architect of the economic reforms argued “Speed was enormously important to the change, are government departments necessary? Are they doing the job? Can they be trimmed? Be ruthless with the answers.” It was a blitzkrieg—shock therapy. Ideology driving change, whereas, in Australia, a far more measured and consultative approach was taken by the Hawke-Keating government.

Layoffs were massive in government departments and state-owned corporations – the postal service, telecommunications, state-owned banks, coal mines. Privatisations, the country’s family silver sold in depths of a recession at rock bottom prices, often to foreign corporations. Farmers went bankrupt, losing farms in their families for generations.

John Patterson of the Social Impact Unit visited those affected in Ohai. State Coal Mines had turned into Coal Corp overnight. “They started by closing two mines and sacking the men who worked there.” The last union meeting was finishing, and the miners were signing on to the unemployment benefit. All the men were there, but where were the women? The district nurse told Patterson that they were at home crying. 

All the men were there, but where were the women? The district nurse told Patterson that they were at home crying. 

Many who lost jobs invested their redundancy money and superannuation in the stock market; lost it in the market crash of 1987.

Unemployment was between 40 and 50% in South Auckland, many rural towns fared even worse, 80% in some areas. The young could find no jobs. Poverty rates soared.

Suicides followed.

Teen suicides doubled over the next five years. Youth suicides rose by 80%.

Ruth Richardson, the Finance Minister of the National government that followed slashed unemployment and other welfare benefits, in her infamous ‘Mother of all budgets’. The irrational belief was if the unemployed were desperate, jobs would miraculously appear.

The Employment Contracts legislation of 1991 weakened the bargaining power of unions. A cynical proclamation that a jobseeker can negotiate on equal terms with an employer. Or that terminations would be fair without union protection.

It made no sense that we made it easier to terminate staff while slashing unemployment benefits at the same time. Reducing taxes for the wealthy while at the same time cutting funding for essential services for those most vulnerable. A government for the people became one for just some of the people.

It made no sense that we made it easier to terminate staff while slashing unemployment benefits at the same time.

Globalisation over the following decades saw higher-paid, stable manufacturing jobs move overseas, replaced by more insecure lower paid jobs in the service sector.

The pre-Rogernomics youth suicide rate was lower than the current OECD average. The teenage suicide rate for teenagers increased by 100% during the period 1986 to 1990 compared to the previous five year period, 67% for the age-group 20-24 and 40% for 25-29-year-olds.

Teen suicide rate kept climbing, except in the decade 2001 to 2010. The teen male suicide rate is now 82% higher than the pre-Rogernomics period, for teen females, it is a staggering 6 times higher, a rise of 620%. The youth suicide rate is still 60% higher than the pre-1985 rate. It’s unclear why the female teen and youth suicides have risen steeply than male.

Racial differences are stark. Teen suicide rates for Maori are over 3 times the rate of European and Pacifica island more than 2 times. The teen suicide rate for Maori females is nearly 5 times that of non-Maori.

The teen suicide rate for Maori females is nearly 5 times that of non-Maori.

Statistics for attempted suicides for Maori are similar to European, while suicide rates are much higher for Maori and Pacifica. The health system and society are less successful in protecting Maori, Pacifica even once the peril is evident.

International comparisons are even starker. Our male youth are dying at five times the rate in Australia, the females two times.

Our male youth are dying at five times the rate of Australians.

“My theory is – we don’t really go that far into other people, even when we think we do. We hardly ever go in and bring them out. We just stand at the jaws of the cave, and strike a match, quickly as if anybody’s there.”
― Martin Amis, A Suicide Note

The youth suicide rate in the most deprived areas is nearly four times that of the most affluent.

The unemployed are dying at over twelve times the rate of the rest of the working-age population.

The unemployed are dying at over 12 times the rate of the working-age population.

Our unemployment benefits at 34% of previous income are one of the lowest in the OECD, 38th out of 41 countries, just half of the OECD average. It is easy to imagine the shock of an overnight income drop of 66%, on top of losing one’s livelihood, especially for people with little savings and low disposable income. It’s easy to imagine the stresses in coping with this much drop in one’s income.

Our unemployment benefits at 34% of previous income are one of the lowest in the OECD, just half of the OECD average.

The Labour party promised transformational change coming into power in 2017. They have stopped mentioning the word ‘transformation’. The problem of low core benefits remains unresolved. Welfare is a political issue. Beneficiaries are victims of politics, the ‘dole bludger’ label has meant increasing benefit levels is unpopular.

“You have Scandinavian ambitions in terms of quality of life and public services, but a US attitude to tax.” – Laura Clarke, British High Commissioner to New Zealand, 2020

Changes to our tax system since 1985 and low productivity increases have meant a massive transfer of wealth to those on high incomes. The size of the pie hasn’t increased, just the share for the wealthy. We are one of the very few countries in the world with no capital gains tax and tax income from the first dollar earned. High housing costs have further diminished disposable income of the poor.

We have successfully reduced suicide rates – for those over 55 years. To a level even lower than the pre-Rogernomics era, 36% to 65% lower. Pre-1985 youth suicide rates were much lower than adult rates, just over half of those 45+ years. Now the situation is reversed, youth rate is approximately 60% higher, and it’s worse for the teens. The baby boomers have benefited most by the wealth transfer post-Rogernomics and the property boom.

We have successfully reduced suicide rates – for those over 55 years, now 36% to 65% lower than even pre-Rogernomics era.

Each life lost to suicide has a combined loss of contribution to society, the economy and the individual’s family of $3.4 Million as per the Auditor General. The cost for last year’s 685 lives was approximately $2.2 Billion or 1% of our GDP. This doesn’t include the cost of attempted suicides.

New Zealand doesn’t track suicide statistics by cause. We have no idea if it is depression or drugs, whether it’s sexual abuse or lack of social support. Or a combination of factors which carries a much greater risk. Nor does it track numbers of suicides with prior attempts. Our Chief Coroner releases provisional figures annually.  However, final numbers and detailed statistics by the Ministry of Health follow three years later, of little use to evaluate the success of any prevention strategy.

A dedicated Suicide Prevention Commissioner was appointed in 2019, and an Office for Suicide Prevention established. A new Suicide Prevention Strategy for the period 2019-2029, “Every Life Matters” followed. The government has allocated significant funding for mental health and resources, signalled that reducing suicides is a high priority. While the new plan mentions stable employment and access to secure housing as two of the protective factors for suicide, it doesn’t mention any action to improve these areas.  

The suicide prevention strategy for Australia touches on training for frontline employees in non-health areas such as social services, income support, employment and the courts’ system. It also emphasises the need to create awareness and training for employees on the other side of the fence, especially those working in employment support settings for referrals and improving employability.

Most suicide prevention strategies are driven by the Health sector, and focus on healthcare, not the broader economic issues that impact suicides.

Most suicide prevention strategies focus on healthcare, not the broader economic issues that impact suicides.

Are we throwing money someway down the cliff? Ignoring a vital part of the picture? Why does a Zero Suicide strategy only target a 20% reduction by 2030? Will this government be bold enough to address our benefits system? Is transformational change a mirage?

Will our young and the poor keep paying with their lives for an economic system that fails them?

Note – Suicide Prevention office and the Ministry of Health was contacted for this article, and no response received.

Where to get help: Lifeline: 0800 543 354 Suicide Crisis Helpline: 0508 828 865 / 0508 TAUTOKO (24/7). This is a service for people who may be thinking about suicide, or those concerned about family or friends. Depression Helpline: 0800 111 757 (24/7) Samaritans: 0800 726 666 Youthline: 0800 376 633 (24/7) or free text 234 (8am-12am), or email talk@youthline.co.nz

Categories
Climate Change

Climate Change – New Zealand

Mitigating climate change and adapting to a warmer world

 “We do not inherit the earth from our ancestors. We borrow it from our children.”

– Native American Proverb

New Zealand is the 5th highest emitter, per capita among the OECD countries, due to our reliance on primary industry exports.  Not where we want to be with our clean, green reputation. Methane and Nitrous Oxide, which are farm-based, comprises 55% of our Greenhouse Gas (GHG) emissions.

The long shadows of climate change are already here. Australian bushfires last year covered an area as large as Great Britain. The images of the blazes dominated our TV screens, vivid pictures of dying koalas and flaming bush. The fires burned for months, beyond human fire fighting capabilities, we just had to let them burn out. The fire season in 2019 started in the middle of the winter in the southern hemisphere. In California, bushfires are an annual occurrence. Still, the fires of 2020 are the largest ever, sparked by lightning strikes on a tinder-dry bush. Cities of Chennai in India and Johannesburg literally ran out of water.

The arctic ice shelf is melting faster than ever, many fear the decline is irreversible. Antarctic ice is melting. Not exactly good news for rest of us that Siberia is enjoying longer crop seasons and their ships can ply ice-free waters for longer.

In New Zealand last year was the hottest on record. The drought that hit Northland was one of the worst. Water restrictions for a city as wet as Auckland seem surreal.

Climate Risks

Our temperate climate means we will be less affected than countries like Australia or the Pacific islands.  The severity of impact depends very much on the strength of global efforts and ours. Modelling can only give us an indication or a range of outcomes for what the future holds.

We already have frequent droughts, especially in Northland, Hawkes Bay and Canterbury, these are likely to spread and become more severe. Lower rainfall will affect freshwater sources and impact on irrigation for our farms, threaten exports and food security. Forestry is another area where effects of higher temperature are uncertain, as it is with wines. While some vineyards can move to colder regions, wines are sensitive to the soil, humidity, etc., may not find ideal conditions elsewhere. We could benefit from the addition of crop varieties which thrive in warmer climates and higher production from the likes of wheat.

Our primarily hydro based electricity generation will reduce in the North Island. However, South Island is likely to benefit with more melting of snow and ice. Ski seasons will be shorter, impact our winter tourism, although we might see a displacement from Australian ski fields.

More frequent and extensive bushfires will threaten residential areas. Coastal erosion, flooding and sea level rises threaten coastal housing, roads, rail lines, the attractiveness of beaches.

Biosecurity risks will increase with uncertain effects due to the interlinked nature of the ecosystems. The cooling cost will be higher in summer, heating cost lower in winter.

There will be a disproportionate impact on Maori/ Pacific due to over-representation in primary industries and fewer resources to mitigate the effects of climate change. The elderly will experience more heat-related health issues.

Insurance costs will increase, and we might have to fund a govt scheme as we have for earthquake insurance. We will need financing for climate adaptation and mitigation costs.

Indirect effects of Climate Change have the potential to affect us on many fronts. Meat-less movement could lower beef and lamb consumption in key markets with some relief from growth in fast-developing economies like China and potentially higher prices. Tourism could be affected by the likes of  ‘No-fly’ movement and especially from long- haul destinations.

We could see climate refugees from the low-lying Pacific island nations and costs to lend a hand with their climate adaptation efforts.

Threats for New Zealand were detailed in the IPCC report of 2014 on regional risks and the National Climate Risk Assessment released by the Ministry for Environment in August 2020.

https://www.mfe.govt.nz/climate-change/assessing-climate-change-risk

Climate Action – Reducing emissions

There are three broad pillars of climate action necessary to decrease carbon emissions and limit the temperature rise.

  1. decarbonising the electricity system and reducing farm based emissions
  2. fuel switching
  3. energy efficiency

Methane and Nitrous Oxide Emissions

The most important and the most challenging issue for New Zealand is reducing farm-based emissions. Methane, which is mainly emitted by our cows, lamb and nitrous oxide, is primarily emitted by nitrogen-based fertiliser. The methane is emitted by insects which reside in cattle and lamb, not by the animals themselves. (Release of Methane is by cows burping not farting!).

The answer lies in better farming practices and technology. The government is funding research into a scientific solution, primarily targeted at feed additives. The solutions can lie in oils and fats, natural supplements like seaweed and tannin or synthetic chemicals.

Decarbonizing

Electricity generation from wind and solar now costs less than fossil fuel energy. Costs are likely to decrease further as we scale up the use of renewables, and technology keeps improving. We already generate 80% of our electricity from renewables due to our traditional hydropower base.

Stability of renewable power is still an issue. Solar generation stops at dusk and wind could stop blowing anytime (although this is less likely with offshore wind turbines). The government is investigating pumped hydro to stabilise the supply of electricity. We may require fossil fuel power as a backup.

 The target date for 100% renewable electricity is now 2030.

Fuel Switching

Tesla

Fuel switching is still at an early stage worldwide; a majority of cars manufactured are still petrol-powered, and we have a vast inventory of these cars. NZ government announced a rebate scheme to encourage changeover to Electric Vehicles (on hold at present), in Norway 31% of vehicles are already EVs. Most of our industries also are powered by fossil fuels and will take some time to replace, due to the long lifespans of plant and machinery.

Energy Efficiency

We have been working on this for a while now, direct cost savings being a great incentive. Energy-efficient cars, buildings, equipment, all have boosted energy efficiency and will continue to improve. Our Energy Conservation Authority (EECA) provides funding to industry for energy efficiency improvements.

Adapting to Climate Change

Research on how our agro-industries can cope better will need to be ramped up. Reducing methane output will be critical. Adapt wines/grapes to a warmer climate. Change crop seasons. Trialling new varieties which might thrive in a more temperate climate. Some farms and forestry can relocate to colder southern areas. Research likely changes in fisheries and quotas.

Water conservation efforts will be needed as well as recycling greywater and rainwater harvesting. Strengthening vulnerable coastal areas with shrubs and rock walls etc. to reduce flood damage.

Relocating seaside homes and infrastructure which we can’t protect, also residences at high risk from bushfires. Bush fire protection measures like back burning during winter will need more attention and fire protection efforts strengthened with more helicopters, workforce etc. Bolstering early warning systems and evacuation plans to cope with increasing and more severe extreme weather events.

We will need heat pumps etc. to cool residences in warmer areas and better insulation, especially for the elderly. Assist those on low incomes, from effects like higher food prices. Review protection for those working outdoor in warmer areas- agriculture, forestry, construction in the summertime. Review government and other institutional structures required for Climate Adaptation. Review finance/insurance to support Climate Change Adaptation

Our pacific island neighbours will need support and funding to implement effective Climate Adaptation strategies. We will need to counter the ‘No-fly’ movement and promote tourism from growth markets, short-haul, and local markets.

The National Climate Adaptation report by the Ministry of Environment is due by 2022.

Climate Action– Slow and steady or just slow?

We have set the base for action. The Zero Carbon Act was passed in November 2019 with bipartisan support. Key targets are to achieve Net Zero emissions except for methane by 2050. Reduce methane emissions by between 24 to 47% by 2050. Setting interim 5 yearly emissions budgets. An Interim Climate Commission set up in 2018 has been formalised upon finalisation of the Zero Carbon Act. The commission has issued reports on agriculture and changeover of electricity generation to renewables.

However, action has so far been slow and baby steps, it’s always harder where the rubber meets the road. The current government banned offshore oil exploration, but not onshore. ACC is planning to reduce high carbon investments –but only to 50% of the current value and only by 2030. Government has abandoned the target to make just the public service fleet electric or hybrid by 2025 been. Action has been much slower and softer than the rhetoric, the urgency required by the words ‘climate emergency’ would suggest.

However, action has been slow and baby steps. The current government banned offshore oil exploration, but not onshore. ACC is planning to reduce high carbon investments –but only to 50% of the current value and only by 2030. Government has abandoned the target to make just the public service fleet electric or hybrid by 2025 been. Action has been much slower and softer than the rhetoric, the urgency required by the words ‘climate emergency’ would suggest.

We need to accelerate the pace of change, move faster if we are to avoid emergencies, disasters and the need for rushed, expensive ambulances at the bottom of cliff solutions.

Climate Change – Possible benefits for New Zealand


Renewables – Almost all the electricity required by New Zealand, including for electric-powered vehicles, will be generated in New Zealand. Saving most of the $10Bn we currently spend every year on importing fossil fuels.
New crops – We might be able to grow food crops that currently grow in warmer climates, increase the production of food crops like wheat.
Extended growing seasons – In colder areas
Ski resorts and tourism – We could see more visitors from Australia, as their ski resorts become less attractive.
Tourism – Tourists who usually go to Australia at hotter times of the year, changing over to New Zealand or increasing time spent here.

How can you help?



Activism!  – Slow Climate Action is mainly due to politics and the fossil fuel lobby groups. Help to keep up pressure on politicians and unfriendly climate businesses. What you can do personally helps, but what the government or companies can do, matters a lot more. Protesting or supporting protests is one of the best things we can do.
Clothing and shopping – Shop smart, buy less and use longer. Consider buying pre-loved clothing. Buy environment-friendly and durable where possible.
Food – Eat less beef and lamb, more fish, vegetables/fruit, and chicken. Meatless Mondays or Vegan Wednesdays, it’s good for your health as well. Buy local produce. Waste less by planning your food purchases.
Trees – Plant trees, get involved in community reforestation, coastal protection programs.
Holidays -Take more local or short-haul holidays.
Home – Use power-saving ideas at home. LED bulbs, air-drying clothes, using energy-efficient equipment, shorter showers, running full laundry loads etc. every little bit helps.
Prepare for likely local impacts like flooding and coastal erosion.
The 3 Rs – Reuse, Recycle, Repair.
Transport -Make your next car an EV. Use more public transportation.
Waste – Waste less and use composting. Composting can reduce your food waste by as much as 75% and save on your fertiliser cost.
Work – Encourage and support your employer’s efforts on climate action.

https://www.mfe.govt.nz/climate-change/we-all-have-role-play/what-you-can-do-about-climate-change

Categories
Climate Change

Climate Change Crash Course

An Excellent introduction to Climate Change basics by Climate Pledge Collective, a group based out of Toronto. https://climatepledgecollective.org/crashcourse/

Categories
Book Reviews Uncategorized

Viking Economics

“The cruelty of high inequality countries is to induce starstruck dreams upon their young people, but refuse to fund pathways to get there”

George Lakey, ex Professor for Issues in Social Change, Swarthmore College

The social-democratic economic model.

High taxes, high wage costs, short hours of work, long vacations, even longer maternity leave, free childcare, free college education, extensive social welfare programs that pay an unemployment benefit of up to 80% of your wage,

 And highly productive economies sound like an oxymoron, a fantasy too good to be true.

How would you encourage entrepreneurs and compete in a globalised economy when your costs are so high? In a world where low labour cost and low taxes are deemed essential for success.

This book dispels the myths that prevail, putting Scandinavian success down to culture, a homogenous population, size of the countries etc. An anomaly.

The arduous journey these nations undertook to transform their economies, from the Viking spirit of war and adventurism to capitalism with a human touch, a caring society. The struggles of the Nordic people to achieve a more equal country over more than a hundred years. The battles to overcome missteps that arose, trying to follow the neo-liberal models that changed the Anglo-American economies in the 1980s. The recovery from virtual bankruptcy that engulfed Iceland following the Global Financial Crisis of 2008. A clue -they didn’t bail out the reckless bankers. And they resisted pressure from the IMF to implement harsh austerity measures.

Scandinavian countries have a higher rate of startups than the USA, free higher education builds human capital, an excellent social welfare net encourages risktaking.

Businesses are encouraged to be competitive, except by cutting wages and benefits. Strong unions provide a balance between employers and employees. Successful cooperative ventures dispel the myth that private ownership or listed companies are the only viable economic models.

Scandinavians support high taxation, as they know they get a high level of services in return– “To get a lot, we pay a lot”. The economic system was built for everyone. It is not a system that encourages the notion in high inequality countries that the winners are supporting losers.

Social welfare programs, while comprehensive, encourages a strong work ethic. The focus is on getting people back to work. Sole parents are encouraged to work by providing free childcare. Teenagers are supported into employment or apprenticeships, providing a smoother transition from school.

This book by George, an American who lived in Norway for many years tells the story of the Nordic economic model. The successes, the challenges, warts and most importantly, lessons for the rest of the world. How we can achieve a highly productive economy where people are treated with dignity and the balance between business and society is highly equitable.

Full review by Chuck Collins who directs the Program on Inequality and the Common Good. https://ips-dc.org/take-lesson-nordic-countries-inequality/

Categories
Poverty

Inequality – Can we build a fairer New Zealand ?

The wealthiest 1% owns three times the wealth as the bottom 50%

“A nation will not survive morally or economically when so few have so much, while so many have so little.”

Sen. Bernie Sanders 

The wealthiest one per cent of our population today owns three times the wealth of the bottom 50%. A European New Zealander owns five times the wealth of a Maori and ten times the wealth of a Pacifica family.. Egalitarian New Zealand is no more. We wrote the obituary way back in the 1980s. Some of us own three or four houses, while many own none. Cost of renting a home could be as high as 40 or 50% of income. The median price of owning a house in Auckland is nine times of annual salary when below three years’ pay is considered affordable. The younger generation is locked out of homeownership, many consigned to be life long renters.

Economic History

New Zealand’s indigenous Maori people depended mainly on agriculture, fishing and hunting. First waves of settlers arrived from England around the time the Treaty of Waitangi in 1840, looking for a better life than crowded, class-ridden Britain. They set up colonies in Wellington, Christchurch and many other places.

Early economic activity was mainly agriculture and gold mining.  Sheep farming started in the 1850s provided a boost to the economy, wool was in high demand for the textile mills in England. In the 1880s discovery of refrigeration started export industries for meat and dairy. Pre 1914 exports were mainly these commodities and imports consisted of manufactured goods. New Zealand became a wealthy country, however, reliant on commodity prices.

The economy grew during World War 1, disruption in Europe boosting demand for agricultural exports. However, post-world war depression was traumatic for the country. The economy started to recover in the 1930s due to stabilisation of commodity prices, devaluation of the currency and boost in exports to Britain with the signing of the Ottawa Agreement, which favoured Commonwealth countries.

New Zealand also imposed heavy import controls to contain a balance of payment crisis, and this insulated economy continued until 1984. Post World War boom in the 1950s was not favourable for New Zealand as Western European countries, and Japan began subsidising their farmers and restricting agricultural imports. Our protected economy provided full employment; however, import restrictions increased costs and reduced competitiveness.

The entry of the UK into the European Common Market was a body blow to the economy and oil price shocks further rocked New Zealand. A succession of failed policies, including a failed Think Big program led to an economic crash.

The Welfare State- The Safety Net

Steve Maharey, then Minister of Social Development and Employment made a speech in Sep 2000 about our welfare state.

The original vision of social security was to grant not only freedom from poverty but also dignity and a sense of citizenship.

The depression of the 1930s heralded the modern welfare state. Labour party which came into power in 1935 introduced a five-day, 40-hour week and a minimum wage;  pensions were increased. The Social Security Act of 1938, which followed is the cornerstone of today’s social security system. The Act introduced a range of new benefits, including provisions for sickness, unemployment, orphans and emergency coverage. This placed social security on a more systematic footing and established a framework that survives to the present day.

Targeted, as opposed to the universal provision of social assistance, has long been our dominant model of social security. It operates within a framework of benefits and pensions funded from general taxation. That is, based on the principle that social security benefits bore no relationship to the amount an individual had paid in tax or the length of time in employment.

New post-war provisions such as universal family benefit to support the education and maintenance of children in 1945 were widely welcomed but added significantly to the cost of social support. During the prosperous 1950s, 60s and early 70s, this did not present significant problems. Unemployment was almost non-existent, and the concept of state-funded benefits to those in financial need was widely accepted by both major parties.

The Royal Commission of 1969 called on the government to renew and enlarge its commitment. The family benefit was doubled, and other benefit levels slightly increased. One of the most pressing concerns addressed by the Commission was the plight of sole mothers leading to the introduction of the Domestic Purposes Benefit for single parents in 1973. Social Security spending increased further in 1977 with the introduction of the National Superannuation scheme, replacing the means-tested system.

Housing

The State Advances Corporation lent 95% of the house value at an interest rate of 3% locked for 40 years, governments of both major parties believed homeownership was necessary for a healthy society. There was adequate social housing. Rent was income-based, and a maximum of a quarter of their wages.

Reforms 1984 – Rogernomics and Mother of All Budgets

“For people who don’t want the government in their lives … this [Rogernomics] has been a bonanza. For people who are disabled, limited, resourceless, uneducated, it has been a tragedy.”

David Lange, New Zealand Prime Minister (1984–89), 1996

The Labour Party came into power in 1984, in a crisis situation; with a political agenda of deregulation.

‘Towns full of weeping women’ an article in Stuff, April 2017 by Philip Matthews talked about the reforms. Roger Douglas, Finance Minister, chief architect of the reform program argued “Speed was enormously important to the change, are government departments necessary? Are they doing the job? Can they be trimmed? Be ruthless with the answers.” It was ideology and trend of the time that drove the reforms rather than pragmatism. Reaganomics and Thatcherite neoliberal economics promoted heavily by a few prominent economists like Milton Friedman as the right cure.

The purpose of the 1987 State-Owned Enterprises Act was a radical transformation “To strip government trading departments of their social objectives. Turn them into profit-making businesses,” as an online history of the State Services Commission puts it. 

It was a blitzkrieg.

The government is pouring money “straight down the drain” by subsidising State Coal Mines, Douglas claimed in an interview to the Waikato Times that every mine employee cost the country $122,000 a year. 

John Patterson was one of the victims of the restructuring when the department of Lands and Survey vanished into history. He finished on March 31, 1987, and started with the Social Impact Unit on April 1. The unit’s role was to monitor the effects of restructuring on communities and individuals and to identify needs.

He would knock on doors across Southland. First stop: the mining communities of Ohai and Nightcaps. State Coal Mines had turned into Coal Corp overnight  “They started by closing two mines and sacking the men who worked there.” The last union meeting was finishing, and the miners were signing on to the unemployment benefit. All the men were there, but where were the women? The district nurse told Patterson that they were at home crying. 

Where were the women? The district nurse told Patterson that they were at home crying. 

Unemployment was not high nationally, but in smaller towns like Tuatapere, it was around 80 per cent. In South Auckland, it was between 40% and 50%.  Revolution was permanent. Tens of thousands were laid off.

Patterson became “the expert on unemployment” across the south. “Restructuring department after department kept going month after month and lives were shattered, for a while,” he says. “In one way or another, they started getting their lives back, and life went on. What got me, looking back on it, was the way people rallied around each other.”

Deregulation in 1984 led to a rush to invest in the stock market, what appeared to be a way to get a decent return. The stock market crash in 1987, came just six months after the initial wave of redundancies, many people invested and lost, their redundancy money, their superannuation.

Many people invested in the stock market and lost, their redundancy money, their superannuation.

While there was a cruelty in laying off so many people at once, assistance was offered. The Social Impact Unit was one example. Paterson has positive memories of the Community Employment Group created by the Department of Labour. It funded community organisations and took the kinds of risks that seem, 30 years later, to have been relatively daring.

Ruth Richardson, who became the Finance Minister of the National government which came into power in 1990, was even more ruthless.

Mother of all Budgets is still f*cking us today

Laura O’Connell Rapira wrote on Spinoff on September 2019 in an article titled “How Ruth Richardson’s Mother of all Budgets is still f*cking us today”. Ruth believed jobs would miraculously appear for people if she cut their income support. She ruthlessly slashed the unemployment, families and the sickness benefits. Benefits were reduced by 20% and stayed at those rates until 2016. Unchanged through periods of a booming economy and governments of both major parties.

It’s a strange ideology that believes in cutting support to sick people, solo parents and working-class families. It makes no sense when a government makes thousands unemployed and cuts their benefits at the same time and reduces taxes for the wealthiest 20%. Top tax rates were cut from 66% to 33%. GST of 10% introduced affected those on lower-income disproportionately and applied on almost everything, including food and medicine.

A strange ideology…. that cuts support to sick people, solo parents and working-class…. and reduces taxes for the wealthiest 20%.

The average income on welfare benefits dropped from 72% of median annual wage to 58%, in just three years of Ruth Richardson from 1990 to 1993, the damage done was lasting.

Bernard Hickey, in his article on ‘Interest’, contends that there was a clearcut worsening of wealth, health outcomes for people born after 1984, which he calls the ‘Baby Bust’ generation.

Those born in the 60s and 70s took advantage of the housing boom, starting in the 1990s. Many owned their houses, making it easy for them to purchase additional houses to rent, using the equity in their homes as collateral. They received tax rebates for any rental losses while reaping benefits from the increases in house values. House values rose further with an influx of migrants from Hongkong and opening the property market for overseas buyers. House values increased from 3 times median annual wage to 6 times nationally, 9 times in Auckland.

Baby Busters were effectively locked out of the housing market.

Economic Reforms Australia 1980s and 1990s – The Hawke Keating effect

Paul Kelly, a political journalist and author who later became the editor in chief at the prominent newspaper ‘Australian’, made an address at a journalist conference in 2000 about the Australian economic reforms of the 1980s and 90s.

The 1980s saw the globalisation of the Australian economy. The 1990s saw the contest between globalists and anti-globalists. A series of events saw an economic liberalisation and triggered a transformation of the Australian economy. Keys to our success in the 1990s is due to decision-makers retaining best policies from the 1980s and discarding the worst. A new framework to underwrite a more neo-liberal and open economy was not constructed in the 1990s.

Keys to our success ….. due to decision-makers retaining best policies from the 1980s and discarding the worst.

First, there was a pervasive sense of national stagnation and decline symbolised by the economic recession of the 1980s. Second, there was a new Labour government, which believed a new approach was essential. The Hawke-Keating government was both free from political dogma and old fashioned economic orthodoxy which undermined and destroyed previous governments.

Third, there was a set of new ideas waiting for the new government to seize upon, with broad support from government agencies such as the Treasury and the Reserve Bank, the Parliament, and Media. Freer trade, smaller government, deregulation of markets, lower tax rates within a fairer system, a more flexible labour market, low inflation, an attack on rent-seekers and a more market-oriented economy.

Fourth the government had a social contract with the trade union movement. The Accord represented a choice by the unions to give priority to economic growth rather than seek to increase wages by industrial might. Fifth, the government’s reformism would be based on gradualism and a search for consensus. The changes were negotiated more than imposed. The Hawke- Keating government shunned a “big bang” approach.

Reformism would be based on gradualism and a search for consensus…changes were negotiated more than imposed.

Sixth for the Hawke government social and economic equity was vital in the transition to economic liberalism. Equity was an essential part of the economic agenda, and aim in its own right. The tax-transfer system was highly effective in nullifying most of the income inequity arising from the market-oriented financial system. The two neighbouring countries, New Zealand and Australia’s, approach to the economic reforms differed significantly. (Inequality in Australia has grown since then with mainly conservative governments in power.)

Poverty Impacts

Child poverty in New Zealand has doubled since the 1980s. Food can be short; children go to school hungry unable to focus on learning. Schools in our decile one schools often lack in facilities, limited with access to technology, low in participation in sports and other activities due to lack of funding for gear. Houses can be cold and draughty, causing health problems.  Our poor tend to live far from urban centres, work in less secure jobs, often working part-time and pay a high cost for transport. We rank 24th out of 33 countries in the developed world for inequality.

We rank 24th out of 33 countries in the developed world for inequality.

We have a real problem with poverty and inequality in the developed world today. People in many countries feel the prevailing system has not served them well, that the mainstream parties on both sides of the spectrum, right and left, have failed them. That politicians looked after the rich and powerful, at the expense of the poor and weak.

Populous movements woo the people as the alternative who can deliver a more equitable system. Populists already lead countries like the United States, the United Kingdom, Brazil, Poland, Hungary, Austria, Turkey, India. Populous movements are increasing their popularity in countries like France and Italy, even Germany. Many have no intention of helping the poor, more interested in looking after themselves and their cronies. They seek undemocratic means of staying in power than rely on the ballot box. They resort to classic ploys like attacking immigrants to distract the attention of the populace.

The Nordic Model

Chuck Collins posted an article on the website Institute for Policy Studies in July 2016, ‘We should take a lesson from Nordic countries’. Reviewing the book ‘Viking Economics’ by George Lakey.

The Nordic countries – Norway, Sweden, Denmark, and Finland – typically have considerably less income and wealth inequality, thanks to both robust social safety nets and progressive taxation. They also top indexes of industrialised countries measuring the quality of life indicators such as longevity, health, work-life balance, and vacations.

Norwegians a century ago didn’t like the results of a wealth gap: the hunger and poverty, crime, elderly friends left in isolation, young people without hope of a good job. Norwegians also didn’t like the attitudes that went with inequality; an inclination toward arrogance among higher-income people and the feeling among lower-income people that they were losers defeated by the system.

The decades-long transition was brought about in several of the Nordic countries through strong popular movements of workers and social reformers that campaigned and won political power. When out of power, they pressured governments through mass protests, including nonviolent direct action when the system was unresponsive.

The Nordic model is a “universal services state” that focuses on poverty alleviation, a robust social safety net, and full employment. But, with a commitment to work as a central part of their anti-poverty strategy for those able.

The quality of life for workers is much higher, and the work-life balance is considerably healthier than in the United States. The average number of hours worked in a year is more than three hundred hours less than in the USA (and New Zealand). Social mobility is increasing in the Nordic countries and declining in the US. The Nordic model focuses on economic security, efficiency, and productivity and believes they are connected.

Their success undermines the view that the ideal capitalist economy is one where markets are unrestrained. Lakey contests the misconception that high taxes and regulation in the Nordic countries stifle business and entrepreneurship. Productivity is considerably higher, even with a shorter workweek. The rate of start-up companies in Norway and Denmark is substantially higher than in the US.  Researchers found Nordic entrepreneurs greater risk-takers because they don’t need to worry about the education debt, retirement, unemployment and medical care.

Nordic businesses compete in the global economy, but they are discouraged, through laws and social contracts, from cutting wages as part of their competitive strategy.

Nordic businesses are discouraged..from cutting wages as part of their competitive strategy.

Their understanding of who the job creators are is not limited to the entrepreneurial class and investors. Although Nordics value the vision, risk and innovation contributed by entrepreneurs, they think the workers do a large share of the egg-laying. Which is why they invest so heavily in human capital and get higher productivity than many countries. Their track record with cooperatives, state-owned and municipal-owned enterprises gives them a positive perception of other sources of egg-laying.

Residents in Nordic countries don’t complain about their higher taxes because they clearly benefit from the expenditures. “For their high taxes the Norwegians have gotten overall affluence, stability, opportunity, a high level of services that make life easier and more secure,” writes Lakey.

From renewable energy policy and valuing racial differences to restorative criminal justice and responding to radical Islam, Nordic countries have valuable lessons for the rest of the world.

In most Nordic countries, the transition from youth to adulthood follows a different path than our focus on college and high-paying jobs. First, there is a deep culture of lifelong learning, folk schools, debt-free vocational training, and support for work transitions and parents. Working-class jobs are valued and well-compensated in the Nordic countries. In contrast, Lakey observes that a “Cruelty visited upon young people in high inequality countries is to induce star-struck dreams. But refuse to fund pathways to achieving satisfying life choices, including high-wage working-class jobs.”

“Cruelty visited upon young people..is to induce star-struck dreams..But refuse to fund them”

“Movements need organisers, communicators, advocates, funders, nurturers, researchers, trainers, musicians and artists, nonviolent warriors, and ‘foot soldiers’ as well as visionary designers,” he writes. “All those were present in the Nordic movements that challenged a thousand years of poverty and oppression, took the offensive, and built democracy.”

The Nordic model can serve as both an inspiring model and a reminder of the many ingredients required for social transformation.

Solutions

Dutch historian Rutger Bregman called for ‘Taxes, taxes, taxes’ at the World Economic Forum (he was not invited again). He called for a top tax rate of 70%. The question was asked, which prosperous country has a tax rate of 70% – the answer that came back, the United States until the 1980s (New Zealand had a top tax rate of 66%). ‘End this, Winners take all economy’ said Anand Giridharadas, a reformed Mckinsey consultant in his best selling book.

The present Labour government has taken a few steps to address inequality. More state housing. Healthier, better insulated rental housing. A winter heating allowance for beneficiaries and superannuitants. Fees free for year one of tertiary education. Lifting minimum hourly wage and indexing to median salary.

Perhaps the largest problem we face today is our polarised political system. The right-leaning National Party, when it is in power, increases inequality by pandering to those on higher incomes and businesses. The left-leaning Labour Party is hesitant to undertake significant reforms, as these will be politicised by the National Party.

The largest problem we face today is our polarised political system

Inequality.org.nz a website run by Max Rashbrooke, who has written an excellent book ‘ Inequality – A New Zealand Crisis’ argues for action on three major fronts.

A fairer tax system

Higher taxes are essential for improving benefits for the poor and the middle class. High tax countries like Sweden, Denmark, Finland, none of them resource-rich, all have GDP per capita at least 24% higher than New Zealand. Our GDP per capita, in real terms, has been stagnant, despite repeated tax reductions for the wealthy and corporations.

Max calls for a higher top tax rate, wealth taxes, capital gains tax and a financial transaction tax. We need to close loopholes in our tax legislation and crackdown on tax evasion. IRD reported that more than half of ultra-rich, with over $50Mn in assets, declared incomes of less than $70,000 per annum. Just a 1% return would be $500,000! The wealthy invest in many asset classes and earn more than 5%, in the long run. (This is the reason that Bill Gates gives away billions of dollars a year, and still has a wealth of over $100 Bn).

Raising taxes is politically unappealing. We can also reduce taxes that impact those on a low income. Reduce GST rate or exempt essentials like food. Introduce a tax credit for those on the lowest income tax slab.

Higher wages for those on low income

A living wage. Invest in providing jobs that pay higher wages. A limit on high incomes. We can improve education in low decile areas by increasing funding and widen the free lunch program. Widen free tertiary education, perhaps starting with polytechnics. Make the apprentice support program permanent.

Raise welfare benefits

Raise welfare benefits to the same level as NZ Super. More state housing and income-related rents.We also need affordable housing for the middle class and essential workers like the nurses, teachers, police. We need Kiwibuild, not more housing for landlords.Improve health services and accessibility for those on low incomes.Many of these services require an upfront investment but generate an economic return over the long term.

Not everything requires money. Let’s stop the payday lenders with their cash trucks, charging over 500% interest, a limit of double the loan amount doesn’t go far enough. (Australia caps the maximum rate at 4% per month). Let’s reduce the pokie machines taking poor people’s money, paying out a few cents on the dollar. Let’s make our criminal justice system focus on rehabilitation, not punishment. Eliminate the Bail Bond Act, which breeds more criminals. Let’s get our social workers to show more compassion. A sugar tax, prominent signage, taking sugary products off school cafeteria, cost nothing and have been shown to have a real impact on obesity and related health issues like diabetes and heart disease. Rezoning land has no cost, except for infrastructure.

Let’s stop the payday lenders with their cash trucks, charging over 500% interest,

There is a lot to do, some of these are expensive, upset armchair experts with a distaste for welfare support. Is there an alternative? Not unless you want to risk radical change, a populous leader or worse.

Change happens slowly in politics, which is not a bad thing. Gradual changes in the right direction, building consensus, is a much better option than changing right and left. What we can’t do is stand still or follow the same policies which led to this place we are now. Keep a system that works for the rich and powerful, and not for the poor, the middle class, the younger generation, the Maori and Pacific communities.

Now is the right time to rebalance the system, lift citizens left behind by globalisation. We need politicians from left and right together working for the good of the country, rather than sniping for political gains. Reducing inequality is not only the right path for the economy, but it is also the right path morally.

It is what our national anthem calls for ‘Let our cause be just and right’.