Widening gap between the “haves” and “have nots” is the burning issue for Ardern’s government to tackle

When  a  journal   as influential  as  “The Listener” flags  the  great  divide between  the  “haves”  and  the “have nots” as the  legacy of the Covid pandemic, it’s an issue  which should be  consuming   the  attention  of every politician — especially  the politicians in a government  with  ministers  who see  themselves wearing  the  mantle  of  Michael  Joseph  Savage.

The Ardern government has not  hesitated  to  throw money  at  the problem, as  other  governments  have done,  and  massive  stimulus  from  the Reserve  Bank  has helped  get the economy   back  on track. 

But, as  economist Cameron Bagrie points out  in “The Listener’s” study,  not  everyone has been a  winner. He  says  the  K-shaped  recovery has exposed pre-existing tension points  such as race  and gender  and  who bears the brunt of a  lift in unemployment.

“There’s  the perceived gap between the haves and the have-nots,  with  soaring  house prices at the epicentre. And  at the  very time we  are dealing  with that, the  financial cost of  our  ageing population is rising rapidly. By 2035, a  massive two-thirds of  welfare  benefit spending is projected to be spent on NZ Superannuation—and that’s not  counting  the growing  health costs”, says Bagrie.     

Covid  has exacerbated  inequality and driven  holes in the social  welfare   safety  net.

The  government  has  tried to plug  one  of the holes  by spending  $80m  on finding  beds for  the  homeless  in motels.  Yet  the  queues  at the foodbanks  of  city  missions  and  other  welfare groups  have  lengthened. 

The government has  lifted  the  minimum  wage—but that is  not  of  much  help  to  casual  workers  who  may  have  only  20  hours  of  work a  week.

NZ  doesn’t  have  these  problems  on  its  own. The pandemic  has  seen the  old  rules  on social spending  ripped  up. Governments  have re-written the texts  on applying  stimulus to keep their  economies from becoming sclerotic.

Clearly  the  social  safety  net  in  many  countries  was  frail before  Covid-19 struck. Now  the  problem  is  how  to make   a  social  safety  net  for  the  post-Covid   world.   

Britain’s prestigious “The Economist” recently explored  this  issue:  it  noted   that  for  years  social  spending   has favoured  the elderly  and  the beneficiaries of an outdated  safety  net.

 It  should be  rebuilt, says  “The Economist”, around active labour-market policies  that use technology  to help everyone  from shop workers  who are  victims of  disruption to  mothers  whose  skills are atrophied and those  whose  jobs are replaced   by  machines. 

“Governments cannot  eliminate risk, but  they  can help  ensure that if  calamity strikes, people  bounce  back”.

So  is  this  the  moment   when  the  Ardern  government   should be  creating new  social-welfare policies  that are  affordable and  which  help workers  thrive  in  an economy facing  technological  disruption?  There  is  plenty  of  evidence  that  programmes  like   the accommodation   supplement   and  Working for  Families  need  an  overhaul.

Or  has the  time  come to  think  of  a totally  new  approach,  given   the  evidence  that  under  the  current  regime  inequalities in society  are  cementing  themselves in?

Is  this  the  moment the  Labour  government should  introduce  a  universal  basic  income, an unconditional recurring payment to  all  adults?

At  first  sight the  idea  of  universality  appears  unreal. Why  make  the  payment  available  to a  millionaire  as  well  as to those  who need it?

Again, turning  to  “The Economist”,  it  reports that where a  UBI  has been tried,  well-being  was   substantially  higher,  recipients registered  less  depression  and stress, a  higher  degree of confidence  in their abilities  and   more  social  trust.

Perhaps  a  UBI   is  too  bold  and  far-reaching  an  idea   for  the  Ardern  government which  seems  preoccupied   with keeping  all  the  one-time  National votes it  won in the  recent  election onside.

But  the  budget  this  year  will  have  to  produce at least a  refreshed    social  welfare programme  if  the  Ardern  government  is  to  fulfill  its  well-being promises.

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