Unequal New Zealand and How to Fix it
“The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have too little.” Franklin D Roosevelt.
Inequality in New Zealand has stunted our social progress for decades. Governments and their leaders have attempted to provide enough for the middle and lower classes to be able to meet their most basic needs. Despite these efforts, New Zealand has had one of the largest increases of inequality since the mid 1980s, according to the Gini Coefficient. This shows that inequality is an issue. However, it is not just a problem for those in the mid to lower bracket. OECD economists estimate that due to inequality in New Zealand economic growth has lost 10 percentage points. Inequality hurts all of the New Zealand people including the upper classes as well as the political system itself. Democracy is synonymous with capitalism, the opportunity for all to succeed and climb to the top of the pyramid. But how is this possible when the current social climate is stacked against the bottom 90 percent? In order to regain a more egalitarian society, we must make fundamental changes to our economic and social policies.
One of the most important components of restoring equality is to introduce higher tax rates on the top 1 percent, thus providing better public services in areas such as education and healthcare. New Zealand’s tax rates are the lowest in the developed world according to new findings from a recently released book, The New New Zealand Tax System, by Rob Salmond. The top tax rate is currently 33 percent for the highest bracket of individuals who are those earning over $70,000. Top tax rates were lowered from 66 percent to 33 percent between 1986 and 1988. Increasing our tax rates here in New Zealand would provide the means to invest in our future and encourage further economic growth that benefits everybody. This could include more small business grants to allow the average person to start their own business, as well as more funding for tertiary education and many more new initiatives. Increased tax would mean that services provided to the entire population – public education, healthcare, public transportation and other infrastructure – could be developed to a higher standard. This would produce a more content population overall. As well as this, there would be opportunity for increased social housing, more support for healthy living and better services to those with mental and other illnesses. By taxing the top 1 percent of New Zealand society by at least 10 percent more, there would be an extensive shift towards a more equal society. Not only would the disadvantaged be helped, but also the upper classes would find themselves in a happier society with less poverty-associated problems. This would include lower crime rates, due to less need for petty crime, and better support for the vulnerable. The top bracket would also benefit from superior public services, furthermore proving that higher tax rates on the top 1 percent does not just benefit the bottom 99 percent. It benefits every person who calls New Zealand home.
A major social problem in New Zealand is imprisonment rates, especially the number of repeat offenders who cost taxpayer money to capture, sentence and imprison. Currently New Zealand has the second highest rate of imprisonment in the world with 199 people per 100,000 incarcerated. The rates are even worse for Maori with 700 per 100,000 in prison. These figures prove that the degree of imprisonment is an issue, and when looking at the most common offences, it is clear that inequality is to blame. Some of the most prevalent crimes are unlawful entry with intent/burglary, breaking and entering, robbery, extortion and related felonies. These are crimes associated with the poor, which in the current prison system is not being dealt with. In order to prevent re-offence, the entire system needs to be overhauled to focus on humane prisoner treatment. An excellent example of this is the Halden Prison located in Norway, the treatment of prisoners is completely focused on rehabilitation rather than on punishment. They aim to help prepare inmates for a positive life on the outside rather than on locking them up and throwing away the key. And it works. Norway has an imprisonment rate of 75 per 100,000 people, one of the lowest rates in the world and has the lowest rate of reoffence at just 20 percent. In Norway, the prison system treats the prisoners as fellow beings, Bastoy prisoner governor and clinical psychologist Arne Wilson says “If we treat people like animals while they are in prison they are likely to behave like animals. Here we pay attention to you as human beings.” This is part of a growing worldwide move towards restorative justice, which is about resolving crime, giving responsibility such as cooking to prisoners and addressing harm done towards victims. If this form of imprisonment was introduced in New Zealand, it would instigate a more egalitarian state. It would stop one-time offenders becoming hardened, senior criminals while in prison. New Zealand would be a safer place and those who have been sent to prison would come out with the skills to be a fully functioning member of society. This helps not just the former inmates, but also New Zealand’s economy, safety and everybody’s wellbeing.
A universal basic income is a concept which has been discussed worldwide for many years as a way of eradicating poverty and creating a well-balanced, equal society. Essentially the basic income would be an amount paid to individuals to meet the basic needs of a person irrespective of any other income and paid without requiring the individual to be working or willing to work if a job is offered. This would completely change the structure of society and would ensure that every citizen in New Zealand would be provided for without exception or discrimination. It would not just help those who are defined as adults ages 18-65, it would also be given to children normally via their parents, which would address child poverty, as well as assisting retirees and eradicate the need for the administration of the pension and of child welfare benefits. Social improvements would be immense, and the program would pay for itself by getting rid of the current budget spent on deciding who needs social welfare assistance. It would also help with student loan and ACC problems faced by citizens and the government. The state would easily be able to collect fines as well as child support, saving money which then can be reallocated as Universal Basic Income payments. This would address many difficulties that face New Zealanders, putting every person on a more equal footing and giving opportunity for new innovation within the country. It would give protection to every minority as well as the majorities in the population, reducing poverty-associated crime among other issues. The Universal Basic Income would nearly solve inequality in New Zealand, with every person’s human rights being met, thus creating a happier population who lead the world in forward thinking.
Inequality in New Zealand is a major concern that needs to be addressed with great societal changes. These are political policies that will send ripples through society, changing the way that we see and interact with one another. We will no longer live in a rigid class system but as equals from different backgrounds. These ideals can be achieved through simple objectives: higher tax rates giving way to better public services for everyone; a restorative imprisonment system to make New Zealand a safer country where prior offenders can contribute to society; and a universal basic income that puts every New Zealand citizen on the same footing. These changes can make a New Zealand that is equal, fair and gives every person the opportunity to be the best that they can.
 Simon Collins, ‘Auckland Divided: New Zealand tax on rich amongst lowest in the world’, NZ Herald, 7 February 2012, http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10783837.
 Christina Sterbenz, ‘Why Norway’s Prison System is So Successful’, 12 December 2014, http://www.businessinsider.com.au/why-norways-prison-system-is-so-successful-2014-12.
Alexandra Orr’s essay was the winner of the under-19 Category in the 2015 ‘Another World is Possible’ Essay competition.