Can we fix it?

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Anna-Bradley Smith ex­am­ines poverty and i nequal­ity i n New Zealand

Through­out his­tory, block­ades have been over­come by new ways of think­ing and ex­per­i­men­ta­tion – tr y, tr y and tr y again, as the say­ing goes. This faith in the hu­man abil­ity to find so­lu­tions has led to ev­ery­thing from peni­cillin to elec­tric­ity to fly­ing ma­chines and it con­tin­ues to push so­ci­ety for­ward. So, in a reg­u­lar sec­tion called Can We Fix It? Idea­log and Ki­wibank look at some of the world’s big­gest – and, in some cases, most in­tractable – prob­lems and the home­grown or­gan­i­sa­tions do­ing their bit to tackle them. This is­sue, Anna Bradley-Smith ex­am­ines poverty and in­equal­ity in New Zealand.

In­equal­ity is a buzz­word in news cov­er­age and has been tossed between po­lit­i­cal par­ties. The way it is mea­sured has also been hotly de­bated. While we clearly don’t suf­fer from the same lev­els of poverty faced by less de­vel­oped coun­tries, what the blame games and back and forth gloss over are the thou­sands of Ki­wis strug­gling to make ends meet. Polling shows we iden­tify in­equal­ity, poverty and hous­ing as our three most press­ing is­sues, and for good rea­son: in 2015 New Zealand was ranked 28th for in­come equal­ity out of the OECD’s 37 de­vel­oped coun­tries.

In New Zealand, poverty is of­ten mea­sured as liv­ing on less than 60 per­cent of the me­dian house­hold dis­pos­able in­come af­ter hous­ing costs – around 790,000 people. This isn’t just an is­sue for those di­rectly af­fected, ei­ther. In­equal­ity pulls on the fab­ric of our so­ci­ety and hin­ders the suc­cess of our econ­omy. As the re­cently re­leased Sal­va­tion Army State of the Nation re­port says, those who fall out­side the mar­gins are part of us.

Since the 1980s the gap between the rich and poor has widened faster than in any other de­vel­oped coun­try, the num­ber of people clas­si­fied as poor has dou­bled – with over a quar­ter of those house­holds go­ing without essen­tials such as de­cent shoes, ad­e­quate heat­ing or enough food – and thou­sands of people have been priced out of the hous­ing mar­ket.

Up to 290,000 of those in poverty are chil­dren, and around 70,000 chil­dren

live in se­vere ma­te­rial depri­va­tion, af­fect­ing their ed­u­ca­tion, health­care and gen­eral well­be­ing. De­spite 14 per­cent growth in the coun­try’s econ­omy between 2013 to 2017, there were no sub­stan­tial changes in child poverty rates, and youth un­em­ploy­ment re­mained around 20 per­cent.

While eco­nomic growth is vi­tal for progress, the fail­ure of this growth to trans­late to wages and so­cial se­cu­rity has left lower in­come earn­ers lack­ing in op­por­tu­ni­ties, in­clud­ing fair ac­cess to ed­u­ca­tion, ex­pe­ri­ences, se­cu­rity, par­tic­i­pa­tion in so­ci­ety and so­cial mo­bil­ity.

The gov­ern­ment has re­cently in­tro­duced a Fam­i­lies Pack­age, which al­lo­cates around $2 bil­lion to hous­ing, health, ed­u­ca­tion and other in­vest­ments. It’s also in­tro­duced the Child Poverty Re­duc­tion bill, which re­quires gov­ern­ments to set re­duc­tion tar­gets. For the cur­rent gov­ern­ment, these in­clude re­duc­ing the num­ber of chil­dren in low in­come house­holds and liv­ing in ma­te­rial hard­ship by around 50 per­cent in ten years.

The Sal­va­tion Army re­port notes ex­ten­sion to the min­i­mum wage, ad­di­tions to the so­cial wage, reg­u­lar ad­just­ments to in­come sup­port pro­grammes and en­sur­ing em­ploy­ees are pro­tected and able to ad­vo­cate for their in­ter­ests would help foster a more in­clu­sive econ­omy.

But the multi-di­men­sional na­ture of poverty and in­equal­ity means mul­tidi­men­sional so­lu­tions are needed, and ones that al­low the people di­rectly im­pacted by the is­sues to be a part of the so­lu­tions. Cue some im­pres­sive ef­forts by com­pa­nies and groups across the coun­try mo­ti­vated to give ev­ery­one a fair shot.

Work­ing from the i nside out

Bring­ing cen­tral gov­ern­ment, local gov­ern­ment, com­mu­nity or­gan­i­sa­tions, pri­vate com­pa­nies, en­trepreneurs, com­mu­nity lead­ers and fam­i­lies to­gether to prob­lem solve sounds, well, stress­ful.

But for South Auck­land, this mashup is prov­ing its worth in tack­ling the area’s most press­ing so­cial and eco­nomic is­sues, on the ba­sis that if South Auck­land doesn’t thrive, nei­ther does New Zealand.

On av­er­age, South Auck­lan­ders earn 30 per­cent less than the rest of Auck­land, with that num­ber higher for Māori and Pasi­fika fam­i­lies, and fam­i­lies face more chal­lenges find­ing suit­able hous­ing and ac­cess­ing health­care.

But along­side the chal­lenges are great as­sets like the youth­ful pop­u­la­tion, vi­brant churches, sports clubs, com­mu­nity fa­cil­i­ties and a great sense of pride and cul­tural di­ver­sity, The South­ern Ini­tia­tive (TSI) di­rec­tor Gael Surgenor says.

“South Auck­land is sick of be­ing seen as a prob­lem to be fixed. There’s been 30 years of pro­grammes and ini­tia­tives and things to ‘fix the prob­lems’. What people have said is they want op­por­tu­ni­ties to be part of the so­lu­tion.”

Born from the Auck­land Plan and funded by the coun­cil, TSI is bring­ing to­gether people from all walks of life in South Auck­land to cham­pion, stim­u­late and en­able com­mu­nity and so­cial in­no­va­tion tar­get­ing three pri­or­i­ties: shared pros­per­ity, re­silience and thriv­ing chil­dren and whanau. TSI has started a Māori and Pasi­fika trades train­ing pro­gramme, cre­ated jobs through so­cial pro­cure­ment, sup­ported new busi­nesses and in­creased healthy food op­tions – all us­ing a so­cial in­no­va­tion ap­proach and work­ing closely with com­mu­nity mem­bers. Col­lab­o­rat­ing with par­ents and the Auck­land Co-De­sign Lab, set up in 2015 by Auck­land Coun­cil and var­i­ous gov­ern­ment agen­cies to ex­plore what a hu­man-cen­tred, de­sign-led ap­proach could of­fer pub­lic ser­vices, they re­cently un­der­took the Early Child­hood Chal­lenge to ex­plore the chal­lenges faced by South Auck­land fam­i­lies.

Re­search shows the first 1,000 days of a child’s life are crit­i­cal to their so­cial and eco­nomic suc­cess later in life. It also shows 0 to 3-year-olds in South Auck­land are sig­nif­i­cantly worse off than those in other parts of the city.

Hav­ing par­ents in­volved through­out the process re­sulted in the most au­then­tic out­comes, Auck­land CoDe­sign Lab di­rec­tor Alas­tair Child says, as those clos­est to is­sues are cru­cial in cre­at­ing so­lu­tions.

The project found par­ents in South Auck­land are fac­ing high lev­els of cu­mu­la­tive stress af­fect­ing their chil­dren’s well­be­ing, and out­comes around hous­ing, in­come, food and mak­ing ser­vices more ac­ces­si­ble were iden­ti­fied. TSI and the Auck­land CoDe­sign Lab have fed this back to the ap­pro­pri­ate local and cen­tral gov­ern­ment agen­cies to make changes. Al­ready, local boards are pri­ori­tis­ing mak­ing coun­cil spa­ces more fam­ily friendly.

This i sn’t j ust an i ssue for those di­rectly af­fected, ei­ther. In­equal­ity pulls on the fab­ric of our so­ci­ety and hin­ders the suc­cess of our econ­omy. As the re­cently re­leased Sal­va­tion Army State of the Nation re­port says, those who fall out­side the mar­gins are part of us.

Although col­lab­o­ra­tion can be tricky, Surgenor says chal­lenges around poverty and in­equal­ity are too big for any one sec­tor to re­ally make a dif­fer­ence on their own. Com­mu­nity, gov­ern­ment, busi­ness and iwi all have to keep work­ing to­gether and “find­ing the sweet spots and the op­por­tu­ni­ties”.

CON­NECT­ING THE PIECES

Less than 63 per­cent of New Zealan­ders own their own home, and there are only 1.9 mil­lion pri­vate homes to ac­com­mo­date the pop­u­la­tion of 4.9 mil­lion. For the 40,000 people that have been left home­less, the short­age of af­ford­able hous­ing is more than a head­line.

But se­cur­ing a sta­ble ad­dress should be­come a re­al­ity for thou­sands more fam­i­lies with the team­ing up of gov­ern­ment ini­tia­tives, com­mu­nity and iwi projects, and new tech­nol­ogy in the build­ing sec­tor.

With more than 6,000 fam­i­lies in need of state hous­ing, the gov­ern­ment has re­cently stopped sell­ing them off and has said it plans to build more than 1,000 a year, on top of a min­i­mum of 100,000 af­ford­able homes over ten years through the Ki­wiBuild pro­gramme.

In a phil­an­thropic ef­fort, de­vel­oper Ted Man­son has started build­ing 500 so­cial rental homes in Auck­land with his fam­ily-firm Man­sons TCLM. Man­son an­nounced the plan, which in­cludes main­te­nance of the apart­ment build­ings, at a hous­ing summit where he said his fam­ily up­bring­ing in a state house had been the foun­da­tion for his views on the need for sta­ble, af­ford­able homes.

But with the av­er­age cost of build­ing a house at $395,000 ($455,000 in Auck­land) not in­clud­ing land, the catch up re­quires a hous­ing plan that stream­lines con­struc­tion pro­cesses, in­cen­tivises de­vel­op­ment of af­ford­able hous­ing and ef­fi­ciently plans in­fra­struc­ture and land use to make con­struct­ing smaller and cheaper houses an af­ford­able op­tion for de­vel­op­ers.

The tar­get of 100,000 homes in ten years would re­quire a level of build­ing not seen be­fore in New Zealand, and ac­cord­ing to a gov­ern­ment or­dered re­port, it needs to be five times higher to meet de­mand.

Although the gov­ern­ment is mak­ing a start, col­lab­o­ra­tion between local author­i­ties, ser­vice providers, com­mu­nity or­gan­i­sa­tions, de­vel­op­ers, builders and iwi will be cen­tral to craft­ing a holis­tic hous­ing plan backed by thriv­ing com­mu­ni­ties. The chal­lenges also re­quire a re­think­ing of how we build homes.

The gov­ern­ment is in­tro­duc­ing a builders train­ing pro­gramme, which will im­prove a lack of ca­pac­ity in the sec­tor, but new prac­tices and tech­nolo­gies, like pre­fab­ri­ca­tion, also need to be em­ployed.

Pre­fabNZ CEO Pamela Bell says it’s im­por­tant the con­struc­tion sec­tor is col­lab­o­ra­tive and re­spon­sive to changes such as us­ing pre­fab to get more houses built, and fast.

“Op­por­tu­ni­ties such as Ki­wiBuild are a once-in-a-life­time chance to cre­ate last­ing trans­for­ma­tive change in the con­struc­tion in­dus­try.”

Pre­fab build­ings are built off­site us­ing dig­i­tal de­sign tech­nol­ogy, and are as­sem­bled on site in just a few hours. Build­ing with this method can cut build time by 60 per­cent and cost 15 per­cent less.

There are al­ready a num­ber of New Zealand com­pa­nies us­ing pre­fab and HNZ pre­dicts the prac­tice will ac­count for more than 50 per­cent of its new builds in the next few years.

Bell says although pre­fab is a great tool in the tool belt, it just part of what needs to be an in­te­grated so­lu­tion to ad­dress the hous­ing short­age.

“All best-func­tion­ing com­mu­ni­ties need a good mix of mas­ter plan­ning plus ini­tia­tives to breathe life into them once they are es­tab­lished.”

ALL IN A DAY’S WORK

Give a man a fish, you know the rest. While the adage is old – and yes, def­i­nitely clichéd – for Otahuhu-based Trow Group, it is the way of busi­ness.

“We strongly be­lieve in giv­ing people a hand up, not a hand out,” Trow Group of­fice man­ager Julie Latu says.

Born from the de­sire to give back, Trow Group spe­cialises in civil con­tract­ing and ma­chin­ery hire, work­ing along­side coun­cils and busi­nesses to re­duce items go­ing to land­fill by de­con­struct­ing and sal­vaging ma­te­ri­als for com­mu­nity groups, in­clud­ing maraes and schools.

Its sus­tain­able ap­proach to busi­ness is paired with the com­pany’s ded­i­ca­tion to in­vest­ing in the ed­u­ca­tion and train­ing of local people who lack op­por­tu­ni­ties or sup­port, and giv­ing them path­ways to em­ploy­ment, Latu says. It's com­mu­nity de­vel­op­ment with people at the cen­tre.

“We be­lieve that if each busi­ness does its bit to­wards so­cial good it will be one big step to­wards a bet­ter fu­ture for us and our chil­dren, and grand­chil­dren.”

Eco­nomic de­vel­op­ment can be a huge force in pulling people from poverty, as ev­i­denced in coun­tries like China. Dur­ing the 1970s in the height of glob­al­i­sa­tion, China man­aged to lift 800 mil­lion people from poverty with mar­ket re­forms, re­duc­ing poverty rates from 90 per­cent to be­low 5 per­cent.

Maybe 90 per­cent of people will go smoke pot and play video games, but i f 10 per­cent of the people go cre­ate in­cred­i­ble new prod­ucts and ser­vices and new wealth, that’s still a huge net win.

The prob­lem is that eco­nomic growth, although im­por­tant, is not shared un­less by de­sign. And as the gap between the rich and poor in New Zealand has ex­panded, in­creas­ingly people across the coun­try have de­cided to do some­thing about it, start­ing so­cial busi­nesses and ini­tia­tives that of­fer train­ing and em­ploy­ment to people strug­gling to ac­cess op­por­tu­ni­ties.

Of­ten these busi­nesses have an en­vi­ron­men­tally sus­tain­able ap­proach, like Kil­marnock in Christchurch, which trains and em­ploys people with dis­abil­i­ties to work in the open mar­ket do­ing a range of ser­vices in­clud­ing col­lat­ing and pack­ing, wood­work and elec­tronic waste re­cy­cling.

In Welling­ton, Pome­gran­ate Kitchen em­ploys refugee women to pre­pare Mid­dle East­ern food for de­liv­ery and cater­ing. The work has helped the women im­prove their com­mu­ni­ca­tion and prac­ti­cal skills, and has led to other em­ploy­ment op­por­tu­ni­ties.

In Lower Hutt, the Com­mon Unity Project started grow­ing food on a school’s un­used field and now feeds 2,500 kids a day. The project has also up­skilled and hired local com­mu­nity mem­bers for a range of work in­clud­ing bee­keep­ing, gar­den­ing and cook­ing.

And in Hen­der­son, The Kitchen Project is giv­ing lo­cals the chance to de­velop their own busi­nesses through train­ing and the use of an in­dus­trial kitchen. Project lead Con­nie Clark­son says the idea is to gen­er­ate di­verse, af­ford­able and healthy food op­tions in the area.

The project is aimed at people who don’t have the ca­pac­ity or fi­nan­cial ca­pa­bil­ity to get their food busi­ness started, and who live in Hen­der­son and would base their busi­ness there.

So­cial en­ter­prise, Clark­son says, isn’t about giv­ing away some­thing, it’s about en­sur­ing busi­ness has a so­cial good be­hind it.

Lev­el­ling the play­ing fi eld

Some­times a car break­down, doc­tors visit or any un­ex­pected cost can be too much to man­age, and money needs to be found quickly.

When sources run dry, pay-day and other third-tier lenders open their doors.

The prob­lem is, third-tier lenders can charge in­ter­est rates between 30 and 400 per­cent, leav­ing vul­ner­a­ble people with a debt bur­den that can quickly pull them into the cy­cle of poverty, Jonathan Choy says.

Choy is the di­rec­tor of Nga Tan­gata Mi­cro­fi­nance Trust, formed in 2010 by the New Zealand Coun­cil of Chris­tian So­cial Ser­vices, the Fed­er­a­tion of Fam­ily Bud­get­ing Ser­vices and the Child Poverty Ac­tion Group, to tackle the is­sue of low-in­come fam­i­lies trapped in high­in­ter­est debt.

“They made the de­ci­sion to pro­vide a real re­sponse in terms of so­cial jus­tice in the fi­nan­cial arena,” Choy says. “To al­le­vi­ate poverty and to help those on low in­comes af­ford safe, fair and af­ford­able credit.”

The trust looked to Good Shep­herd Mi­cro­fi­nance in Aus­tralia, which has been op­er­at­ing for over 30 years, for its in­tel­lec­tual cap­i­tal and guid­ance in cre­at­ing its first as­set build­ing loan.

Mi­cro­fi­nance is recog­nised the world over as a tool to tackle poverty by help­ing people es­cape high in­ter­est debts and give them a chance to ex­plore busi­ness ideas and ac­cess ed­u­ca­tion.

With Ki­wibank pro­vid­ing the cap­i­tal – which was re­cently in­creased to $500,000 – the trust of­fers two in­ter­est and fee-free loans, one up to $1,500 for as­set pur­chases and the other up to $3,000 for relief from high in­ter­est debt.

Choy says the strength of the pro­gramme is the loan cou­pled with fi­nan­cial ca­pa­bil­ity pro­vided by bud­geters who work along­side clients.

“Not only to pay back the loan but to help them with their over­all fi­nan­cial sit­u­a­tion, which is of­ten very chal­leng­ing.”

Just as im­por­tant as help­ing people re­gain con­trol of their fi­nances, the loans have im­proved the men­tal health and well­be­ing of par­ents, which in turn im­proves the well­be­ing of their chil­dren, Choy says.

By late 2016 the trust had lent $414,000 to 187 clients, an amount that’s been cal­cu­lated to have saved over $800,000 in credit costs and charges.

A key aim of the trust is that bor­row­ers are able to get their bud­get un­der con­trol, re­pay debts and gain ac­cess to the main­stream fi­nan­cial re­sources that those with higher in­comes or more sta­ble fi­nances have ac­cess to.

It also ad­vo­cates for a safe and fair credit en­vi­ron­ment that’s more pro­tec­tive of low-in­come people, in­clud­ing a to­tal cost of credit cap for lenders, a key con­di­tion miss­ing from cur­rent leg­is­la­tion, Choy says.

Be­cause, as OECD co-op­er­a­tion and de­vel­op­ment sec­re­tary-gen­eral An­gel Gur­ria said, “Ig­nor­ing in­creas­ing in­equal­ity is not an op­tion”.

TSI and Auck­land Co-De­sign Lab It won’t come as news to any­one that poverty is one of the big­gest is­sues fac­ing our so­ci­ety to­day.

Trow Group be­lieves in hand-ups, not hand-outs.

Pre­fabNZ HIVE in Christchurch Pre­fab home com­ing to­gether

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