The OECD has confirmed what we already suspected with its ground-breaking report on inequality – Divided We Fall. The gap between rich and poor has grown exponentially since the 1980s in most developed countries – but none more so than in New Zealand.
A particular perfect storm of deregulation, state asset sales, recession, cuts to welfare and entitlements, and lack of wage growth in the 1980s and 1990s has left our economy, and our society, sick at heart. More and more evidence shows how bad inequality is for our whole society – we’re all worse off in an unequal society, not just those at the “bottom”. The impact on New Zealand is well-presented by Richard Wilkinson and Kate Pickett, authors of the groundbreaking book on inequality The Spirit Level, in this video presentation.
So what can we do about it? Well the OECD – that bastion of progressive economic and social policy – recommends policies in three key areas: making tax fairer, upskilling the workforce, and investing in human capital and education.
Funnily enough, these are key features of Green policy. Russel spoke yesterday about how a Capital Gains Tax is exactly the kind of tax change the OECD recommends to combat growing inequality – it closes the ultimate tax loophole.
In 2010, the Green Party undertook a major project on reducing inequality, and released to to coincide with the 2010 Budget. We called it Mind the Gap, and it included 10 practical, achievable policy solutions to combat growing inequality, including a comprehensive capital gains tax, raising the minimum wage, a tax-free bracket of $10,000, progressive electricity pricing, extending Working for Families Support, reinstating the Training Incentive Allowance, building new state houses, and minimum standards for rental accommodation.
Those who bat off evidence of the growing gap between rich and poor and say there’s nothing we can do are wrong. There’s plenty we can do. But we need to accept that inequality is a problem that it’s in all of our interests to solve. Then we need the will, the guts, and the political leadership to get on with it.