While New Zealand has a strong record of delivering prosperity for the majority of its citizens, inequality threatens to put a fair share of the country’s prosperity out of reach of many New Zealanders, says a paper out on Monday commissioned by Chartered Accountants Australia and New Zealand.
The paper – “The Quest for Prosperity: How can New Zealand keep living standards rising for all?” – was written by international think tank the Legatum Institute.
While it hails the country’s top-line record of growing prosperity – New Zealand ranks number one in the Institute’s Global Prosperity Index – it calls for action to fix inequality, address housing affordability and improve economic competitiveness.
“Already, it is clear that current prosperity in New Zealand is not enjoyed equally by all,” the paper says. “The low-skilled, and Māori and Pasifika communities, disproportionately miss out.”
Among its proposals are raising the school leaving age, teaching skills that keep pace with technological change, reviewing the taxation of property, and strengthening New Zealand’s environmental credentials.
The paper singles out education as one of the key solutions to address inequality.
“In particular, it is about keeping everyone in education for longer and equipping them with the skills that will not only offer them a job and development now, but also opportunities in a future economy.”
Peter Vial, New Zealand Country Head of Chartered Accountants ANZ, says the paper aims to provide new insights into challenges to New Zealand’s future prosperity. “It is to enhance the debate on these issues, not provide all the answers.
“The paper shows New Zealand is, by world standards, in a good position to deal with inequality - the fundamental economic, business and governance settings are all strong, as is the country’s social capital.
“However, as a starting point, everyone needs to recognise that inequality makes us all poorer.
“Bold action is needed now for these strengths to translate into better education, housing and health for all New Zealanders, areas in which the paper shows we are less globally competitive.”
The paper warns that future challenges, especially from advances in technology, will “deepen these inequalities”. New Zealand, it says, is more exposed than most countries to automation because of the disproportionately large number of low-skilled workers.
“New Zealand should be proud of the way it currently delivers and secures prosperity for Kiwis,” says Stephen Brien Senior Fellow at the Legatum Institute. “However, maintaining and furthering that prosperity in the future will depend on the depth and breadth of the nation’s human capital.
“To achieve ongoing prosperity, New Zealand must ensure as many people as possible are equipped with the required skills, and have the opportunity, to contribute to society. This will benefit not only the economy, but also the wellbeing of individuals and the communities they live in.”
22 Comments
The lowest skilled should be paid the same as the highest skilled, that is equality! Get rid of grades, and other discriminatory measures. People shouldn't need to do well in a racist education system, just to be lawyers or doctors. Equal opportunity should mean that everyone can be what they want, and if a company doesn't hire them, they must be a racist, sexist, ableist company and should be named and shamed and sent to jail!
New Zealand is a prosperous country, and to stay that way, we have to make sure that everyone receives exactly the same income, and has exactly the same amount of wealth. Some people will have to pay a lot more tax, but obviously they are so privileged they wont mind, but if they do mind they are bigots and will learn their lesson in jail.
Equality in prisons is a good place to start, more pakeha womyn need to be represented in prisons, as do pakeha men. Quotas should be made and filled based on 'preferred' gender and race.
Any social policy = communism! It's a slippery slope, slippery slope!
Except when I reach 65. That's different!
Rick: I can't believe you actually assume either the Nationals or Labour will keep their word and not change qualification date for superannuation. From the tone of your writing I'm guessing you are between say 25 and 35 (old enough to make sense and have a sense of history and young enough to be reasonably free of cynicism). So when in 30 years you arrive at 65 you will find your pension will be at least 5 years away - before I begin to feel sorry for you I will contemplate you living maybe a decade longer than me.
To prepare for your old age I recommend (a) Kiwisaver, (b) property - but not too much and (c) be really nice to your children.
Hi Lapun. I was actually being sarcastic, describing the "capitalist on tax day, socialist on pension day" attitude some seem to take in our society, wherein any discussion of tax is cast as horrid communism yet there remains an expectation of receiving from society when it's their own turn.
To prepare for your old age I recommend (a) Kiwisaver, (b) property - but not too much and (c) be really nice to your children.
That last part of the sentence made me smile appreciatively. But yes, we have property, save a lot, and are contributing to our KiwiSavers more than the minimum.
I comment on here because I want folks younger than I am to have a fair go.
I did agree with everything except the '65'. Have you read "the Black Swan" - it expounds the idea that some events cannot be predicted but you ought to be ready for them. Say a volcano in Auckland would destroy all my wealth and assets. Secondly that what is unknown to you may be well known to someone with better information. The authors example being the turkey preparing a graph for daily food intake against weight gained but not realising the significance of Thanks-giving day in the USA. My example having worked for lawyers who were involved in the cases where people lost everything in Lloyds insurance unlimited liability partnerships - no 'active' partner at Lloyds got caught only the 'sleeping' partners. So best investment would be your health - who knows how long you may be working nor how menial the tasks.
skudiv,
It's always good to read such a well researched,thoughtful and deeply analytical piece of work.I have read the article several times,but my dull brain could not make the connections that your superior intellect allowed you to do.
I was unable to find even a hint that all should be paid equally,irrespective of their respective skill levels,or indeed,any of your other claims,but then,as i have said,your intellect operates on a different level to mine.
With 2 likes already,I forsee as glittering political career for you-somewhere far to the right of ACT.
It's more a shift in tax burden from the wealthy to the poor, and also the growing automation and immigration of cheap labour that is making general labour demand fall and oversupplying the labour market which suppresses wages in the face of growing productivity. If too few people have disposable income, then businesses will have too few customers.
The labour market as the main means of distributing the productive capacity of the nation is failing. Times have changed, it's time for a new tax and incentive regime. One that encourages economic activity, working and productive use of capital and natural resources.
Households will be unmotivated if there's insufficient motivation. The labour market has been failing to do it's bit for some time now to provide incentive, motivation and distribution of productivity.
""“In particular, it is about keeping everyone in education for longer and equipping them with the skills that will not only offer them a job and development now, but also opportunities in a future economy.”""
Reading this I think they mean by 'in education' keep them at college. This is the same argument that has moved the age of leaving school up and up over the last century. It is the obvious argument made by the educational vested interests: teachers and academics.and it appeals to those who are successful (politicians and bureaucrats) because they all did well educationally.
But it is wrong. My son wasted the last two years at school skipping classes and generally distracting those who wanted to work (I can assure you not because of lack of encouragement from home or by some exceptional teachers). Now he has started work as a building apprentice and he is doing great - I simply can't believe it is the same young man who gets up in the dark to go to work but had trouble getting to college by midday last year.
We must accept that not everybody responds well to classroom learning.
In today's Herald there is a report about a farmer running a practical agricultural training school near Hunterville; he is critical of the 'bums on seats' model of training which produces graduates who are useless on a farm. To quote "It's not about how much money goes to agricultural training. It's just how it's invested is bad".
Every child in NZ gets free access to our education system which on average spends $180k per child over a full set of years. The inequality is not caused by the government (national and labour governments) as they are holding up their end of the bargain so you go figure who is to blame?
We the people are the problem. If we don't value each other and the work we do as equally valuable in any organisation, in any part of the community then we have inequality. The current economic model relies on unskilled workers - why do unskilled workers deserve a lower quality of living than a skilled worker?
When we don't value the needs of others as equally important as our own needs we have equality.
I seem to recall the outgoing children's commissioner saying in an interview with Newshub that an impoverished child today receives around one sixth the support that John Key did when he was such a child.
On the one hand, I can understand the desire to prevent the repetition of the likes of John Key. But more seriously, it's a pretty big concern if we're no longer providing impoverished children with the opportunities and tools with which to lift themselves up in life.
I have no illusions that you or I would necessarily buck the statistics and lift ourselves out of poverty were we born into an impoverished family in certain parts of New Zealand. Nurture, not nature.
Yes, we have the ability to manufacture more than we need as shown by policies that deliberately lower the lifetimes of manufactured goods with all the resulting environmental prolems. Perhaps systems where in suitable industries work becomes four days per week and study the other will provide better results all round in what is becoming an ever rapidly evolving work place.
Again the rising living standards dogma. What are the basic living standards that every person should have access to? Which living standards are we trying to raise and where to?
There is enough for everyone - the issue is one of access by all. The issue is the price of these living standards.
Don't care too much when a adult makes a bum choice and ends up very poor (just so long as they don't inconveniently die on my driveway) but every Kiwi child deserves all the investment we can make in them.
Only TOP have a UBI for under 3s (ought be under 5s). With a little care it could be used to reduce single parent families - our complicated benefit system rewards parents who break up and that is the single most drastic problem any child can carry.
This reliance on education is very simplistic - education works if you get complete buy in from the student and family. The student on his/her own often loses faith in the motto 'education is there to break the cycle'. I have experienced this with a number of students for 16 years.
Every young person regardless of upbringing wants to make something of themselves with some degree of success. Sadly, a few never experience this through a severe lack of positive role modelling in the home and the education system with the likes of "National bloody standards" simply reiterating their place in society.
Schools are constantly being asked to present and hit targets for student achievement with a particular focus on priority learners such as Maori and Pasifika - something I resent strongly. I often wish I had the fortune to possess a few of the many positive features and characteristics of our indigenous people who equally understand their culture, beliefs and their ancestral knowledge. Sadly too many Maori find the 'Pakeha' approach more appealing to achieving success whilst quietly dismissing their kaupapa.
Society is about bridging cultural differences and tolerating strengths and weaknesses in one another - not preaching or teaching to a standard that apparently befits all.
I often wonder why we use National Standards as a measure of success for 5-12 year olds and then halt it there?
Why not continue through schooling and adult life? There are many people, professional or otherwise that some would subjectively deem "well below standard".
New Zealand has become increasingly competitive within our communities, whether it be through the suburb we live in or the school our children attend. Status, fame and wealth appear more important than community and happiness.
You only have to see John Key's rise to power as evidence of what many Kiwi's perceive as success.
We live in one of the most desirable countries in the world and perhaps we should be grateful for what we have, but I cannot stomach one more homelessness story or another advertisement for "Kids Can" while we pretend our country is growing for a better future for all.
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