Crying poor hides good life realities

GUEST OPINION

Poor New Zealanders.

An extra-terrestrial reading headlines and listening to the political debates would think we live in a country rife with poverty, inequality, fears of Big Brother, political corruption, discrimination and environmental degradation. 

The view from other countries on this planet is, however, somewhat different. 

The Social Progress Index (USA) ranked New Zealand number one of 132 countries in March this year. The index has three pillars: basic human needs (NZ is 18th), foundation of well-being (NZ is sixth) and opportunity (NZ tops the ranks). Within opportunity NZ ranks first in personal rights, personal freedom and choice, fourth in tolerance and inclusion, and fourth in access to advanced education. 

In October last year, the Legatum Prosperity Index (UK) ranked New Zealand fifth of 142 countries. In this index, basic economic data such as GDP per capita, growth and savings (NZ is 17th) are included with entrepreneurship and opportunity (15th), governance (second), education (first), health (20th), safety and security (15th), personal freedom (fifth) and social capital (second).

The OECD calculates poverty (defined as 50% of the median equivalised household income) affects 11% of the population. This is a smaller proportion than the OECD average, and in the UK and Canada. 

New Zealand’s inequality rankings are similar to other developed countries through the OECD Gini coefficient. 

Auckland is ranked 10th in the liveable City stakes and no New Zealand city is in the 10 most expensive cities in which to live. 

House ownership is similar to other countries (again, OECD comparisons). 

We have a larger proportion of the country in the Department of Conservation estate, with open access, than other developed countries. 

We have 100% access to water and sanitation. We also have highly rated health and education systems.

We have all these things because of history – the pioneer mentality that made settlers battle on through adversity to get ahead. We pay taxes and we look after each other. 

Most people recognise this – yet the focus is all on the negatives. 

The weekend headline “We are poorer” typifies the approach. Reading the article revealed the headline referred to a calculation that had been done incorrectly in the past. “For the first time, over $13.5 billion of student debt was included in the figures to bring New Zealand household net wealth calculations into line with those of other countries. The effect is significant: our collective net financial wealth as a proportion of disposable income fell to 35% at the end of 2013 from just over 45%.”

The real question might have been on student debt. And the answer is in expectations and entitlement.

Everybody in New Zealand is entitled to an education. Whether this education then equips the students for employment has not been a focus. 

The OECD Employment Outlook 2014 report released at the beginning of the month highlights the importance of promoting higher educational attainment but also of enhancing literacy, numeracy and problem-solving skills, and improving the information available to young people when choosing their field of study. 

In order to assist employment, the OECD recommends improving apprenticeship opportunities, removing barriers for firms to take on part-time workers and possibly introducing tax incentives for students working up to a certain number of hours.

The recommendations are based on the finding that, for younger people, education is the biggest differentiator in differences in hourly earnings; experience also plays an increasingly significant role in explaining wage variation. 

In addition, early on in a career, field-specific skills gained from studying are found to be important; later on, generic skills are the important ones in deciding remuneration. 

The Roy Morgan Research poll of 966 people in July and August showed that concerns about inequality and other social issues are top of mind in this election. Almost a fifth of New Zealanders consider poverty, the gap between rich and poor or the imbalance of wealth is now “the most important issue facing New Zealand” – up from just 4% in the equivalent poll just before the 2011 election.

The solution for some parties is to increase the minimum wage. Phil O’Reilly, chief executive of Business NZ, has pointed out admirably that doing so without increasing job content and responsibility through education will merely be inflationary as people on $18 an hour will expect equal consideration. 

Entitlement will continue to be at the fore. And entitlement leads to the victim mentality and “poor me.” It doesn’t motivate or encourage people to battle on through adversity to get ahead.

Education remains the key and part of education must be in understanding the realities of life. 

In some aspects the NZ indices are approaching those of other developed countries. We now have more people defined as being in poverty because we now have more rich people – and the definition of poverty is a median, not to do with affording the necessities of life.

Griping and whinging is giving a very strange impression of this country: the indices indicate we are extraordinarily fortunate. Whatever the specific political celebration on Saturday night, the generic celebration should be that we live in New Zealand … and are fortunate, not entitled, to do so.