Ministers enthuse at their economic prowess but polls suggest the public recognises a failure to tackle poverty

Government  ministers   are  exulting  over  how the  NZ  economy is performing—  and  their  own work  in  making it stronger.

David  Clark,  standing in  for  Grant  Robertson in Parliament on Tuesday, rejoiced at  how  solid the  “underlying  fundamentals of the  NZ economy are”.  He said the government  accounts for the June  year   showed how the coalition  had achieved  “strong financial results,  while also making significant  investments in well-being and infrastructure”.

Robertson,  singing from  the  same   songbook, celebrated NZ’s economic strength and resilience being recognised in a major update on the state of the global economy.

The IMF’s latest World Economic Outlook  shows   NZ’s  growth   forecasts   have held  steady  at  2.5%  in 2019, rising  to 2.7%   next year, against  the 1.7%  for the  rest of  the so-called  “Advanced Economies”.

Robertson says   NZ is not immune to the global  situation—but  NZ’s  surplus and  low debt  present  “further  opportunities  to strengthen the  economy”.

Ministerial   hubris  about the state  of  the  economy  doesn’t  match  up  with the  latest  political polls   which put   Labour   on a  downward trend.

So  is  this a case ( again)  of  NZ  voters   being unable to  recognise the skill  of those steering the economy?

Or is  rising disenchantment  with the coalition got more to  do  with its  failure to  deliver on  its  “transformation” promises?.

The  dissonance may be  due to  the  unpleasant  truth that  child poverty, instead of falling, is actually rising; the queues of homeless, rather than shrinking, are actually  growing,   and the  goal of 100,000  affordable homes  is nothing more than a ministerial  mirage.

Economist Susan St John, spokesperson  for  the  Child  Poverty  Action Group,  put it  more  starkly when she  said  on  TV3:

“We have a crisis in NZ, and we’re not identifying that, it has to be addressed, and that is the crisis of poverty….We’ve got a situation where families that are too poor to feed their children. We’ve got them queueing at food banks. We’ve got Christmas coming up, pressure on the NGO sector telling us that things are overwhelming in the demand that they’re seeing. This is a crisis”.

St  John  contends by  spending  the surplus now the government  will be   addressing real problems.

If you don’t, you’re going to have future social costs. So it’s false economy not to do it now. There’s no justification for letting people who do not have enough money be in that situation for year after year, until some point in the future we decide to deal with it. It’s a problem now, and it’s a problem now for the children”.

She   points out since people do not have enough money, they’re having to go and argue for supplementary assistance.  That  is stigmatising, difficult, temporary and not the answer.

“So about one third of beneficiaries are needing these top-ups. That shows the system isn’t working. And then there’s the other group that are ending up at food banks or going into debt. So, there’s a $1.7bn debt to WINZ which has arisen from WINZ having to fund these extra supplementary payments”.

Appearing  on the  same  programme  alongside St  John, former Finance Minister Sir  Roger  Douglas and ACT founder conceded   there  is  a problem.

On that I agree with Susan. But the problem is we need to solve it. And just throwing money at it doesn’t necessarily solve the problem.

“The central feature about disadvantage is, in fact, not just about money, it’s almost the total lack of choice. And the disadvantaged, in my view at least, need the kind of help that puts people back on their feet, able to make a contribution and make gains for themselves by what they do. And that is the package.

“We’ve thrown money at it. John Key claimed to have the biggest increase in income for the disadvantaged; the Labour Party came in, they cancelled the tax cuts, gave it to the disadvantaged, and the disadvantaged are not any better off. Until we get to a situation, we move away from political choice, which we had, where the politicians make all the decisions, to personal choice. We’ve got to empower this group. Their desires, what they want, is no different from the rest of us”.

Sir  Roger   says the problem has to be solved on a permanent basis.

“Look, there is inequality in this country. No one can deny that. More than 80% of households have less than $100,000 in investment capital, and how are they going to survive into the future? We need a policy that solves that.

“The problem is, we haven’t got much time. I’d take the $4bn of cash, there’s about $14 or $15bn which I can identify of wasteful or unnecessary expenditure, add that together, transfer the health float into that, you’ve got about $40bn, and empower people with savings  accounts, and let them spend their own money. And I believe also there needs to be a tax cut, a substantial tax cut, which you bias to those on low incomes”.

On taxation, Sir Roger   argues middle NZ  have been hurt, particularly families.

“I mean, if I’m on $50,000 and I get a pay-rise to $60,000, there are circumstances where of that $10,000 pay-rise, $8500 is going to go to the government. That’s nonsense, 30c in tax, 25c reduction in Working For Families, 5% GST, 5% other taxes, and maybe 20c off your housing if you actually had that. And that’s the next big problem for NZ, and I don’t see either party addressing it.”

Are  ministers   listening to people  like St  John, or – for that matter – Sir Roger?

Point of Order  thinks  not.  And, sadly, even if they were, they wouldn’t do anything.

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