Answering the critics of getting New Zealand out of poverty

Poverty is one of New Zealand’s biggest social issues and probably the most divisive. It is a subject that generates a wide range of reactions when discussed, from compassion and wanting to help those in it, to contempt that at times almost borders on hate. In this article I look at some of the common arguments put up by those who are critics of the behaviours and living standards of lower income earners.

To me, poverty is an intergenerational thing in many families. Successive generations of the same family have come to be marginalized people, unable to break. There are multiple arguments that critics of addressing poverty like to use to justify their stance. I will address these here:

  • that most are lazy people who simply do not want to help themselves
  • that people who are in poverty waste their benefit money on drugs, alcohol and gambling
  • that all one needs is to work hard and save

A fairly small percentage of people are likely to be lazy – but how did they get to this state of being? Are they from a family where schooling was a low priority; what if their parents were simply absentee in that they were at work or had gone out and simply neglected their children? You cannot blame the children for that.

A correlation between the location of alcohol stores and bars with pokie machines can be made. For example Merivale and Fendalton, two of the more upmarket suburbs in Christchurch have bars, but they are quite upmarket places that do not have run of the mill features such as pool tables, T.A.B. and/or pokies; instead of the standard Speights, Mac’s Gold, Guinness, more expensive beer is found. Higher income areas have greater social mobility and are able to afford access to resources that lower income people cannot. Contrast with neighbouring Bryndwr or Papanui, both of which have bars that have pokie machines, and subsequently middle income people are more likely to be found there, which helps to discourage the lower income earners from presenting.

Occasionally you see articles in Stuff which are click bait in nature, but talk about people who have had supposed rags to riches stories simply by working hard and saving hard. What these articles tend to omit is that these people had parental or other assistance getting into the market. A person earning $75,000 a year currently loses $25,000 in income tax. Assuming they are flatting/renting they might pay another $15,000 in rent. Add food, internet, medical, clothing and vehicular costs and that might be another $1,200 per month.

$75,000 – $25,000 – $15,000 – $14,400 = $20,600 per annum after expenses and assuming no money is being set aside in KiwiSaver. It would take 18 years if all of that $22,000 was saved JUST for buying a house to be able to buy something worth $400,000. Someone at a supermarket on minimum wage earning $600 per week after tax, paying rent could easily lose nearly all of that on living costs, never mind saving.

Crime is a significant symptom of poverty and much of it can be removed by addressing the chief causes of poverty. By giving people a proper place to live that is warm and dry will help to reduce the likelihood of them being a drag on the health system; establishing an adult education system for those who were never taught basic things and assign them a tutor/buddy; appending social benefits to inflation will all help. Addressing poverty is a long term investment – a marathon and not a 100 metre sprint.The social/economic/cultural benefits in the long term will far outweigh the fiscal costs of the investment.

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