Monday, May 25, 2015

Sustaining today by denying the future

When I attended primary school over four decades ago the importance of saving and being financially secure was strongly encouraged from an early age. Our little deposit books from the Post Office Savings Bank had a squirrel on the cover to remind us of the importance of putting something aside to ensure a comfortable future. School banking ensured that a culture of responsible economic management and preparing for the future was ingrained at an early age and schools were rewarded for their efforts:

(Mataura Museum)

On leaving home I put money into a home ownership account with the Southland Building Society and after ten years it matured into sum that enabled me to pay the deposit on my first house. In 1987, as a young teacher of seven years experience, I was able to make an important property investment. My $5,000 deposit was able to purchase a house with the same value as my annual salary ($27,000), a tidy three bedroom wooden bungalow in a good area (admittedly in Invercargill). My financial future at that point was relatively secure, I had reasonable certainty of income and had a capital asset that would retain or grow in value. 

My son has had different experiences from me financially and has a much more uncertain future. 

While we encouraged both our children to save money in their own accounts, banking in schools was no longer supported. Bank fees were also excessive for accounts holding small sums and returns were minimal. It seemed to make more sense to spend money rather than have it lose value in the bank. 

Despite putting money aside in an education savings scheme to help pay for my son's tertiary education, and he was able to earn money through holiday employment, a student loan was inevitable (and encouraged). My son, with the support of his parents, has managed to limit the size of his loan to well less than the average, but it is still a substantial amount that needs to be paid back. Depending on the qualification, student loans of $40-100,000 are common. Having just completed a useful degree (Design Innovation) my son has no guarantee of employment where his skills can be fully utilized and we have a country where graduates earn less than most in the OECD.


After five years, if my son is able to find a job related to his qualification, he can expect to be earning around $50-60,000 a year at age 27. Rather than saving money for a deposit on a house with his initial earnings my son will still be trying to pay off his student loan. Even if he was in a position at that age to buy a house similar to my first one (in the same area of Invercargill) he would be looking at a house worth around $160,000 (around three times his annual salary) and will be needing a $24,000 deposit. The cost of housing in relation to income has increased at least three times since I bought my first one. 

By the time my son has paid off his student loan and has saved enough for a deposit on a house he will likely be in his mid thirties. By that stage I was living in my third house, which is our current home, and was concentrating on bringing up a young family.

Most young New Zealanders looking to buy their first house do not live in Invercargill and $250,000 to $300,000 would be the cheapest price range for the majority of areas where our population is concentrated, five to six times the annual salary my son will be potentially earning. We now have a future generation where house ownership is practically an impossible dream. Removing the Government kickstart for Kiwisaver is effectively knocking out yet another support that once made home ownership possible. 

The latest budget threw some extra money at the poorest beneficiaries but it is clear there is little support in helping most young New Zealanders in having a secure future in the manner I enjoyed. Young academic, Andrew Dean, describes in a recent book Ruth, Roger and Me how his generation's future has been considerably compromised by economic decisions made in the past

When the cost of financing superannuation and supporting our elderly is approaching $800,000 extra each year, there is a widening divide between the wealth and welfare of our retirees and our youth. For a country with a strong economy, rich in resources and a relatively small population, surely there should be some expectation of home ownership and financial security for following generations. It appears we are already exploiting and borrowing from my son's future to support today's inequitable and unsustainable economy. The concept of investing in our future appears to have disappeared with school banking, our children must do the best they can with what little we leave them. 

Friday, May 22, 2015

Singing the Budget Blues


Despite our 'rock star' economy over the past three years it has not increased Government income to the level expected and the Government has not been able to deliver its promised surplus. If income doesn't change, but priorities shift, then the money has to come from somewhere and when one sector wins there has to be a balancing loser. I applaud the increase for beneficiaries but it has come at a cost to Kiwisaver and tougher work obligations.

The only way to increase funding without winners or losers is to increase the size of the pot. The majority of the Government's income is generated through direct and indirect taxation and dividends earned from State Owned enterprises (SOEs). Over the past financial year the Government earned $61.5 billion from income tax (core revenue) and $27.9 billion from dividends (and sales of state assets). The total Government income for the last financial year was $89.4 billion and its expenditure was $92.2 billion. Government borrowing has reached $59.9 billion and the annual cost of debt repayments is currently around $3.4 billion. The most significant one item cost in the budget is our New Zealand Superannuation ($12.3 billion) and this is increasing by around $800 million a year as our aged population grows.

National Governments are so averse to taxation that even while we were in the middle of a global financial crisis they cut taxes for upper income earners. An increase in GST was supposed to offset the cuts so that they would be fiscally neutral, however the result was an annual loss of tax revenue of at least $1.6 billion a year. Even the word tax is difficult to swallow for this Government and when they feel forced to introduce one they feel obliged to give it another name.

The only way to increase tax revenue for the tax averse is an increase in economic activity, lifting incomes and growing exports. Wages and salaries for most workers have had modest increases over the past six years (around 50% received no increase in 2014). The fact that wages for at least 25% of workers are below a living wage (around 10% are underemployed), rather than collecting tax revenue from those workers, tax revenue has to be directed back in the form of Working for Families and tax credits at an annual cost of at least $4 billion a year.

The three areas of greatest economic growth have been the dairy industry, the Christchurch rebuild and the Auckland property market. The tax income from dairying is limited by the high levels of borrowed capital needed for a growing industry. The Government itself has had to invest a considerable amount to support the Christchurch rebuild and because we were short of skilled labour we have 1,000's of migrant workers whose incomes will have a limited impact on the domestic economy because they will be sending them back to their families overseas. Of course because we have no substantial capital gains or inheritance tax, it makes us one of the most attractive places in the world for generating capital gains through property speculation. This is great for speculators but generates little Government revenue. The Government is also spending over $1 billion a year in accommodation supplements as many low income earners can no longer afford rents as supply decreases and demand increases.

One of the largest beneficiaries of the New Zealand economy are the banks as they lend to support an overheated property market and dairy farm conversions. The difficulty of being reliant on Australian Banks for our borrowing is that dividends go back to Australia and they employ complex measures to avoid paying New Zealand tax. Expensive legal action in 2009 resulted in the recovery of $2 billion of unpaid dues.

Our rock star economy may not have resulted in significant wage and salary increases but our richest New Zealanders have seen substantial increases in income and capital gain (around 10-20% a year since 2011). Sadly few pay much tax as capital gain is generally exempt and clever accounting has seen around two thirds declare meagre personal incomes. Research established that we lost around $7.5 billion of revenue through tax evasion in 2011 and we are far more lenient on white collar crime than beneficiary fraud, despite it costing us significantly more.

To encourage outside investment in New Zealand the Government is also limiting tax revenue by giving tax breaks to the already highly profitable oil companies to encourage exploration and to the likes of Warner Bros. We even gifted a wealthy Saudi businessman $6 million in stock and equipment to help pave the way for a free trade deal.

The Government's reluctance to deal with tax evasion and capital gain has meant an increased focus on asset sales and SOE dividends to balance the books and top up the coffers. It put too much pressure on Solid Energy to produce more dividends which resulted in it going belly up and costing the Government more in keeping it afloat. While SOE share sales may have generated some influx of capital, the income from dividends will be reduced from now on (a short-term sugar fix and a long-term cut in income).

The Government had put a lot of hope on the dairy industry and had obviously learned nothing from their Solid Energy experience. Much was done to encourage greater milk production and farm intensification with an investment into more irrigation and a push to double primary exports by 2025. The sudden dip in milk prices from a global glut of powdered milk appears to have come as much as a surprise as the drop in coal prices. Our focus on one industry and lack of diversification has left us exposed and we still have a large environmental cost to manage from dairy expansion.

Bill English and his Government are often praised for sound economic management and steering us through the GFC, but close analysis reveals a different story. We are a resource rich country and have the potential to produce a variety of products and produce to global markets. The lack of investment in research and development and a limited range of exportable, value added products have made us vulnerable to fluctuating commodity markets. Despite the fact that our electricity is cheap to produce, power companies operating in a flawed market have been encouraged to pay high dividends back to the Government and their new private shareholders. Rather than using our electricity supply to provide us with a commercial advantage it is being used to increase Government revenue through SOE dividends (an indirect tax) and support the profits of private investors.

The OECD has estimated that we lost 10% of potential growth in 2010 because of having the fastest growing inequality in the OECD. The cost of supporting those on the lowest incomes is considerable and the value they add to the economy is limited. With the loss of a large portion of our manufacturing sector over the last 20 years or so we have lost a lot of skilled jobs. The Government's approach to procurement has also been at the expense of our skilled labour force.

The economy that this National Government supports does not work for everyone, in attempting to maintain the incomes and the privileges of the already wealthy it has meant a reduction in revenue and cuts to essential services. The fact that a $25 dollars a week boost in income for beneficiaries was greeted with such gratitude was an indication of how desperate those on our lowest incomes are. The price of a haircut is considered a weekly lifesaver for those who have little left to buy food after the rent and power bill is paid. Apparently this is what a successful economy looks like and this is the new normal for many New Zealand families.

Perhaps its just about the language and we should be talking about a wealth levy...?

Tuesday, May 19, 2015

Government Kills Relationships Aotearoa


Social Development Minister Anne Tolley and her Government has done everything in their power to kill off Relationships Aotearoa (RA). The organisation is the country's largest and most effective provider of professional counselling and relationship education at a time when domestic violence is one of the biggest social issues confronting our country. In 2012 alone there were 90,000 domestic violence incidents reported (240 a day) and these are horrifying statistics considering most incidents go unreported.

The economic costs of supporting the victims and families affected by domestic violence has been estimated at well over $1 billion a year. It would seem logical that any investment in counselling and education would reduce costs in the long term and be worth every cent.

The Government, in its wisdom, has changed the way RA operates and has broken its services into different contracts and tied specific budgets to each. It has also passed on services that were once provided by the Government and were new to the agency. In a 2014 submission to the Productivity Commission RA demonstrated an eagerness to help streamline the social service sector and provide a better service. It also expressed concern at the inefficiencies and costs incurred by the Government's new contracting regime:
  1. Fragmented contracting arrangements increase contract compliance costs, stifle innovation and may not meet the needs of those supported. 
  2. The current contracting environment works against collaboration and diversity – both of which are desirable.
  3. There is an opportunity for Government to invest further in the long term sustainability of the sector. 
Interestingly if we look at the $8 million in funding that RA receives each year, and divide that by the 25,000 people they annually support, it averages out at $320 per person (and probably multiple counselling sessions). If you also consider the costs of infrastructure and staffing and what is involved in the compliance to meet the terms of their contracts, I struggle to see evidence of wasteful spending. The worrying deficit this year that has caused the Government to consider discontinuing funding was $271,000. To put the deficit into perspective it is almost identical to the Minister Tolley's annual salary. The Government is willing to ditch a worthwhile service like RA for what seems to be a relatively small amount, yet plans to spend around $26 Million to explore the possibility of a new national flag. 

The Government has not looked at the social value and relationship outcomes produced by RA, nor provided any analysis of the real costs of delivering the services. It has arbitrarily funded contracts without any idea of what was really involved and has ignored the agency's reasonable concerns. While Solid Energy can get away with losing hundreds of millions, an agency providing a social need will be axed without a second thought. The same happened to Christchurch's Rape Crisis Centre when demand outstripped its funding.

The Government been duplicitous in the way it has presented RA's performance. While Anne Tolley obviously wouldn't say that any money was misused or squandered (it clearly hasn't) she gave the impression that there was unstable management and, despite Government support, poor performance. The truth is that RA has had a load of new responsibilities dumped on it under a problematic contract system and has not been funded appropriately. It has been set up to fail by a bullying autocratic Government and will be shut down for not being able to deliver the impossible.

There is no other provider that can fill the void so the Government has effectively pulled the rug from under the feet of all the struggling families and marginalised them further. Metiria Turei was right to call out Anne Tolley and the National Party for its lack of empathy and three words sum up their current actions: CALLOUS, CRUEL and CALCULATING!

Friday, May 15, 2015

Schools, Beards and a Civil Society


The story of the student sent home because he had unshaven stubble on his face has sparked another debate on the extent of authority a school should expect to have over its students. This is an important discussion because it goes to the heart of the purpose of education and what we would like as educational outcomes for our young people and the future of our country.

I was privileged to attend a secondary school in the early 70s that was very much at the forefront of educational thinking. Invercargill's Kingswell High School began in 1971 (I started in '72) in the less affluent part of Invercargill and was led by respected educationalist, Graeme Gillespie. The school endured a lot of criticism for rejecting many of the traditional elements that most secondary schools support (and still do). We had no uniform in the senior years, no prefects, no traditional prize givings (recognising academic achievement), no corporal punishment (common at the time) and a strong focus on extra curricular activities and outdoor education.

Gillespie believed strongly in creating a school culture that encouraged student empowerment, civic engagement and removing barriers to success for students from less affluent backgrounds. The school expected all students to be the best that they could be through hard work and respect for others (constant themes at our assemblies) and recognising service (citizenship awards were considered the highest accolades). The school was run democratically with the student council (representatives from every class, including third forms) having a prominent leadership role.

Despite no official uniform there was still a dress code that was determined by the students and when given that responsibility we actually set high standards. The photo below is my sixth form year in 1975 and when you consider that this is a group 17 year olds (and make allowances for the era) this is a smartly dressed group for a lower decile school.

I am second from the left in the front row

You will also notice in the back rows above, a few male students with substantial facial hair (click on the image to make it larger). The student council had requested that students who were able to grow beards and moustaches could do so as long as they were trimmed and tidy. Principal Gillespie could think of no good reason why the request should be denied. He believed that facial hair did not create a barrier to learning and making rules around this was more about adult control than the individual development of the students.

Kingswell High School had some success in providing a range of experiences for students outside of what could be provided by many of their lower income families. Senior Teacher Austin Brookes led an intensive outdoor education programme that provided students of every year an Outward Bound type experience that involved self-discovery and an appreciation of our natural environment. At the end of my five years of secondary school not only had I achieved University Entrance but I had also kayaked and rafted wild rivers, climbed mountains, abseiled, tramped, skied and explored caves.

Despite not having academic awards my year group were still very focused on academic success and making the most of opportunities. A good number of us ended up in the same student hostel in Dunedin and it was obvious that the Kingswell students had a level of self-assurance and leadership skills that made us stand out from others. For students from most other schools, the freedom of making decisions for themselves was a new experience and many went to extremes in a rapid journey of self-discovery.

My Kingswell High School education had helped install in me a sense of individual responsibility, an ability to work co-operatively to achieve goals and the importance of community service. While I had the advantage of supportive parents and a professional background, all students at my school were able to access experiences similar to my own and many have gone on to leadership roles within their communities.

I am immensely proud of my own children's academic achievements (I attended my son's graduation two days ago and my daughter is in her second year), but I remember attending many high school prizegivings, where year after year the same students received the top prizes. The academic elite were clearly defined and rarely changed, their parents were generally high achievers and it was my view that the student's family backgrounds determined education success more than anything the school could claim.  I often feel that secondary schools celebrate the successes of individual students when they have had a minor part in that achievement. Walls are often covered in photos of students who have achieved national recognition in sports largely supported outside the school. How useful is it really to focus the majority of attention on those who will succeed despite the school. Although both my children had teachers who had very positive influences on them, they weren't essential to their later success.

I encouraged both of my children to involve themselves in the extra curricular activities that their respective schools provided but neither had the opportunities or breadth of experiences that I had enjoyed. I actually support NCEA and believe that students have a much larger range of subjects to chose from and the academic standards are actually greater than in my day (judging by the experiences of my children) but I believe academic achievement is only one determiner of future success and contribution to society.

By focussing heavily on academic achievement and having strict rules around uniforms and personal presentation, compliance to authority then becomes extremely important. It all sounds nice and tidy and orderly and many will see these priorities as perfectly reasonable. However if we are wanting to produce future citizens who are resilient in a rapidly changing world and are able to find creative solutions to our social problems perhaps we are failing. Surely we should be empowering our young people by allowing them to discover themselves in wider contexts, respect their opinions and give them more opportunities for self determination in democratic forums.

Young people are far from perfect, they are often impulsive and egocentric, but they are not stupid. With supportive mentoring, being given more responsibility and self determination actually teaches worthwhile decision making skills and independence when making inevitable mistakes can be managed.

The experiences of many students in our education system are not always positive ones if academic achievement is difficult for them. From the age of five our students are now assessed by narrow standards and ranked against their peers. In reality such ranking is unlikely change throughout their school career and will also become a self fulfilling prophecy (there is less social mobility than ever before). Any attempt to somehow standout in any nonacademic way is generally not encouraged. The high suicide rate in our youth is an indication of low self worth and a feeling of powerlessness.

For young a student from a less affluent or stable background the messages are often clear: they are generally below the standards expected of them (within narrow criteria), they alone are responsible for lifting their achievement (often overwhelming) and if they don't wear their secondhand uniform properly or have a shave then they risk being excluded.

I wonder if the school or society would disintegrate if the student that sparked this post had been able to express concern about the school rule to be clean shaven to his student council and the rule had been removed. If this had occurred the young man in question would probably have felt that his concerns about a nonsensical rule had been heard, his views respected and he probably would be still studying in his school with a greater sense of self worth and confidence. He may even decide to exercise his vote because of his positive experience of a democratic system that works for everyone.

Monday, May 11, 2015

NZ's Social Democracy Leadership Ends.


New Zealand is a small pacific nation with a total population that is much smaller than many cities around the world. Despite our size we do have a reputation for having an impact that is much greater than our size should dictate. Our sporting achievements, social justice leadership and political influence has provided us with useful recognition and respect. Much of this has been achieved by thumbing our noses at major powers through making stands on moral issues and doing things our own way at home. We once had the highest standard of living in the world and New Zealand was known as being a family friendly country with one of the best education systems in the world. New Zealand was described as the Scandinavia of the Pacific because of our affluent, egalitarian society and governance that aligned with other social democracies.

While the last thirty years or so saw Neo-liberal economics infiltrating our governance, and increasing inequality, we were still leading the world in aspects of social democratic legislation like our ACC and the RMA. Both Labour and National Governments used to support progressive legislation and National's Simon Upton reviewed the RMA bill that Geoffrey Palmer had introduced and strengthened the environmental protections before it was passed into law. 

Under this current National Government, John Key's relaxed leadership and offhand manner has fronted some very determined attacks on the very things that won us international respect and ensured fairness to all was a guiding principle. Sadly we are no longer being recognised for being a progressive country, but as a country that is squandering the advantages we had and being a lap dog to larger powers. I have tried summerise our decline:

Global Leadership
Education
  • Clarence Beeby is widely recognized for lifting New Zealand into the position of being a world leader in education. He moved the country away from narrow, restrictive testing regimes and concentrated on lifting professional capability and meeting the individual needs of children.
  • The National Government has reversed the focus on evidence based change, reduced professional input and returned to narrow testing regimes. We have dropped from the top ten in world rankings to as low as 23rd
  • I have listed the numerous ways the Government has dismantled our once strong public education system to favour the rich and private business. 
Employment
Child Welfare/Housing
Public Health
Taxation
  • One of the hallmarks of a social democracy is an acceptance that Governments have a role in providing a strong base of services and support for all citizens. Wealthy New Zealanders used to pay a much higher percentage of their income in tax and Government funding in the 50s and 60s allowed for high levels of government services and employment. 
  • The social contract that all citizens contribute according to their means has been substantially eroded. Tax avoidance and evasion is common amongst the very rich and many corporates now evade tax
  • The National Government cut tax for the rich at the very point its income was constrained through the economic recession. 
  • Cuts in government services is the necessary outcome of a reduced income and despite New Zealand experiencing substantial increases in economic growth we have not seen a comparable growth in government revenue.
Democratic Government
  • Another hallmark of a social democracy is strong public participation in the democratic process. New Zealand once had a high level of union and political party membership and in 1984 almost 94% of voters did so.
  • An important part of the democratic process is a strong 4th Estate and most social democracies have well funded public broadcasting.
  • In 2011 the voter turnout to had dropped to 74% and for local body elections it has dropped to 40%.
  • Under this Government we have seen an erosion and restriction of public information and an increase in urgency to progress legislation with limited public scrutiny. 
  • National wiped our remaining public funded TV channel and has restricted other funding to public broadcasters like National radio. We have much fewer jobs for journalists and a growth in PR and media advisors instead. The capacity for robust scrutiny of Government performance has diminished. 
While I accept that neoliberal economics within governance is now a dominating factor around the world and a global wealth capture (well described by Piketty), New Zealand doesn't have to follow the same path. It now seems that we have well and truly lost our reputation as a social democracy leader and an innovator in social justice legislation. We have recently been identified as the country that has suffered the most from a restricted economy due to a steady growth in inequality. We are being led by a Government with a limited moral compass, that would rather be a loyal lacky to bullying powers than make a principled stand.

Rather than seeing the economy as something that should serve all people, as social democracies did in the past, people now are expected to support an economy that benefits a wealthy elite. 

Saturday, May 9, 2015

UK FPP Electoral System Unfair


The First Past the Post (FPP) electoral system used in the UK is patently unfair and produced the following results:
  • The Conservative party are currently able to govern outright after 63.1% of the voters did not vote for them and they won almost 100 more seats than they would have done under a proportional system.
  • The Labour Party won over 30 more seats than they would have under a proportional system but they would have been much closer to the Conservatives than they currently are.
  • The UK Independence Party was particularly badly treated by the FPP system. Despite achieving 12.7% of the national vote (and 1/3 of the Conservative vote) they only got one seat. Under a proportional system they would have had 83 MPs.
  • The Scottish National Party did better than any other party by getting 56 MPs with only 1/3 of the UKIP vote. The SNP ended up with the third largest number of MPs in parliament when their voting percentage placed them fifth.
  • The Liberal Democrats proportionally deserved 51 MPs, but only got 8 under FPP. This was a cruel result for them. 
  • The Greens had over one million voters (3.8%), had only 1% less support than the SNP, yet won only one seat. They should have had 25. 
  • The Democratic Unionist Party somehow won 8 seats (the same as the Lib Dems) with only 0.06% of the vote, making them the fourth most powerful party. 
  • 21 MPs made it into the UK Parliament from parties that did not achieve 1% of the vote. 
The Economist has a calculator that shows the disproportionate results of the 2015 election and the four elections before. The Lib Dems were particularly robbed of representation in the 2010 election when they proportionally deserved almost 150 MPs (at 23% of the vote) but only got 57. Labour achieved an incredible domination of the UK Parliament in 2001 when they received 40% of the vote but won 63% of the MPs. 

The United Kingdom has five more years of a Conservative government that 2/3 of voters didn't want, what a crazy state of affairs! 

Wednesday, May 6, 2015

Greed, Inequality and Denial


Inequality in New Zealand has now reached extremes that would have been thought unbelievable forty to fifty years ago. I remember holidaying in Queenstown as a child and youth in the late sixties and early seventies. Bankers, teachers, farmers and freezing workers would be holidaying side by side in camping grounds or in basic baches, comparing outboard motors on their boats and swapping fishing stories. The differences in income between the working class, professionals and business people didn't appear to be that great and most children just attended their closest school, as most public schools were considered relatively equal educationally. One income was all that was necessary to comfortably support a family.

Bill Richardson was one of Invercargill's richest men but his home was not much different from many others in Invercargill. Bill's wealth was realised in his truck museum and community involvement rather than his lifestyle. Most families in the sixties and seventies lived in their own homes and many could afford to build them. Generally speaking New Zealand was a fairly egalitarian society, family incomes and aspirations were similar for most.

New Zealand has changed. We now have an easily identifiable privileged class (the top 10%) with a lifestyle and influence dramatically different from most other New Zealanders. Their homes are palatial and they live separate lives and in separate communities. Their children go to elite schools that capture more than their share of Government funding. Most of them own multiple properties and increase their wealth through untaxed capital gain. Many Government Ministers come from the same privileged class and those moving through the ranks of the National Party are accustomed to lavish lifestyles.


The median household income is under $70,000 and a family with two children earning this can only afford a mortgage of $297,000 according to the ANZ calculator. Considering the median house price in Auckland is now $720,000 and the national median is $415,000, few families can realistically expect to buy their own home as most did a couple of generations ago. Even renting is now a strain for many without support and 52% of households in Decile 1 school communities are overcrowded. Homeownership levels have now dropped below 50% and are still declining.

I have already written about the poor distribution of wealth within our country by using Invercargill as an example. The Southland region earns 12% of our nation's export income while making up only 3% of our population. Despite this wealth creation the median annual income in Invercargill is under $28,000.

The Government claims that the best way to lift families out of poverty is through jobs and yet 95% of New Zealanders are already employed and 43% have claimed that their income was either just enough or not enough to cover everyday needs. The majority of those seeking food parcel assistance are working families and the working poor is a growing demographic in New Zealand. Budget advisors claim that many families now have to use 60-65% of their income to cover rent and there is little left for other essentials.

There is much less job security than in the 60s and the forty hour week has become a rough guide only and more New Zealanders than in most OECD countries go beyond fifty hours. Around 10% of workers at the other end want more hours and feel underemployed. Zero hour contracts have proliferated and only became an issue after a sustained effort from unions and Campbell Live to expose the cruelty behind them. Casualisation of work is increasing, where sick leave, holidays and other employee entitlements don't apply. There has also been a slow response to address the vulnerability and monitoring of our growing numbers of migrant workers, who often earn well below the minimum wage. The employment law balance has been tipped to dramatically favour employers and even meal breaks have become negotiable. 80% of workers are not members of a union and employers can now remove themselves from negotiating collective agreements.

There is no will within this Government to really address inequality. House prices are being allowed to increase to support the capital gains of the elite, wage increases are being kept to a minimum to support company profits and educational advantages that the wealthy already enjoy are supported further. While the richest New Zealanders have seen their wealth increase between 10 to 30% each year since 20011 (even Government CEOs can expect similar increases), most families are seeing their dreams of home ownership and financial security shift further and further beyond their reach. In trying to obtain the holy grail of a budget surplus it is ordinary New Zealanders, not those with the greatest wealth, who have had to tighten their belts to obtain it. The rich had their taxes cut.

It is now supported by research that wealth reduces empathy and this is certainly true of this Government. I would go as far as to say that they actively discourage any possibility of gaining empathy and are more likely to blame the poor for their circumstances. When Metiria Turei questioned the Governments level of empathy for the poor she found herself under personal attack. The level of denial from this Government is incredible. There is a determined refusal to really measure poverty and appreciate the extent ordinary families are struggling. When Key was challenged about the number of school children who arrived at school with no food he organised phone calls to a handful of schools to cover his position rather than use the readily available data from Kidscan. While $9.5 million has been budgeted to feed hungry children, around $30 million will be spent on deciding what flag we should have. Those debating tactics and budget decisions exemplify the level of commitment that the Government places on addressing poverty and inequality.

We have had over six years of a National led Government and the wealthy elite are calling the shots. They do not want an economy that serves all New Zealanders, nor one that creates a sustainable future for the following generations, they want to protect their unfettered growing wealth. Greed, not altruism, is behind the most crucial economic decisions and an active denial of what is really happening to this country enables that greed to prosper.