The Ardern government has made “well-being” such a focus of its policies that many New Zealanders think it is now the way forward.
Labour’s ally, the Green Party, is so enamoured with the “well- being” philosophy it sharply criticised the government for raising the level of main benefits “by less than $8 a week” from April 1.
“We have a poverty crisis in NZ, and we must go further and faster to deliver income support that enables everyone to live with dignity,” says Green Party spokesperson for Social Development & Employment Ricardo Menéndez March.
“The government currently expects a single person over 25 years old to be able to get by on just $250.74 a week, and they’re supposed to celebrate that rising to $258.51. That extra eight dollars isn’t even enough to buy a block of cheese.”
Menendez March says it is “disingenuous” of the government to continue to say indexing benefits to wages is the best thing they could have done, and
” … even the Children’s Commissioner said they need to be bold and courageous, and actually lift benefits.
“Indexation of benefits to wages means little without a substantive lift in core benefits to close the gap which has continued for decades.”
The Green Party’s expert on poverty rubs it in still harder by arguing on behalf of the one-third of New Zealanders who rent their dwellings and spend, on average, more of their income on housing costs than those who own a home. Tinkering around the edges (he says) is not enough to help families who were already struggling to get by, especially in the last 12 months since COVID-19 hit.
“And when we have Auckland median house prices rising by $100,000 in February alone, we need to do more.”
He points out the Welfare Expert Advisory Group said the current welfare system is “no longer fit for purpose and needs fundamental change”.
So what’s the answer for those suffering grinding poverty in these modern-day circumstances?
Adopt the Green Party plan to institute a Guaranteed Minimum Income of at least $325 per week?
“If there is anything we have learned from COVID-19, is that bold, urgent action to change the system for our collective wellbeing is possible”, says the Green Party.
However much the Greens may expect the Finance Minister to jump to attention and rewrite the budget to incorporate these ideas, Point of Order suspects beneficiaries may have to wait a bit longer to pull out benefits of the magnitude that would satisfy them.
To our knowledge, Robertson has not yet been subsumed by the well-being theorists to the extent that he can ignore this hard economic truth: keeping the Reserve Bank’s printing machine running non-stop rapidly undermines the value of the dollar.
As NZ has learned the hard way during the Covid-19 pandemic, GDP growth is important.
This week the NZ Herald carried an article from an Otago University academic, Dr Dennis Wesselbaum, arguing that the Covid recession has been tough for NZ and shown how it has brought GDP back to the front page ahead of so-called well-being.
Wesselbaum says the problem is that less GDP does not mean less inequality.
“The fact that the economy has not taken more damage is due to large scale debt-financed government spending programmes. However governments have only limited abilities to continue with these policies and they are not sustainable”.
He says the pandemic has offered an opportunity to find out whether New Zealanders subscribe to the “degrowth theory” and whether they care about income, employment and consumption or rather focus on well-being.
Dr Wesselbaum concludes that not much is left of “degrowth theory”.
“Even here in NZ, the country that publicly moved to well-being, GDP is back”.
But will the Greens accept the Wesselbaum message?
Don’t count on it.
Oh – and while we are the topic of indexation, we have had our attention drawn to a post on Lindsay Mitchell’s blog in February last year. It cautioned that Indexing benefits to wages is setting a precedent.
They’ve been indexed to inflation since 2001 but this move has always been resisted.
For many people the margin between income from a benefit and income from work is a cost they are prepared to pay. Fix that margin and they will always be prepared to pay it. Increase the margin and work becomes attractive.
The previous Labour government understood this.
Mitchell’s authority was former Finance Minister Michael Cullen:
“…it is desirable to create a margin between being dependent on a benefit and being in employment….
“The Labour Party isn’t the party that says living on a benefit is a preferred lifestyle. Its position has always been that the benefit system is a safety net for those who are unavoidably unable to participate in employment. From its history, the Labour Party has always been about people in employment.”
Point of Order 