Middle NZ believes in level field

Struggling middle-class Kiwis still believe they can get ahead – a sign that inequality has not reached danger levels.

That’s according to Bryce Wilkinson, a researcher for the conservative New Zealand Initiative, who says ‘‘fair’’ is not about who owns what.

The question for him is: ‘‘Do you feel you can get ahead with your own efforts, or do you think the dice are loaded against you?’’

It is extremely important that a high proportion of people had faith in their own hard work, Wilkinson says.

He believes most New Zealanders still feel they can get ahead, even struggling middle-income earners who face rising costs that have outstripped wage gains.

One survey (the World Values Survey conducted in three waves between 1995 and 2011) found 63 per cent of respondents believed that in the long run hard work usually brought a better life, while 37 per cent felt luck and connections mattered more.

Labourites were more likely to think luck and connections mattered more, while Nationalvoters were more likely to believe in hard work.

Improving equality of opportunity requires tackling New Zealand’s ‘‘long tail’’ of students failing in schools, and neglect and abuse in households, Wilkinson believes.

Inequality researcher Max Rashbrooke says the question that remains is defining the point when inequality reaches such a level that it crosses the line from being ‘‘fair’’ to ‘‘unfair’’.

Following the publication of Bloomberg’s annual list of global billionaires, which revealed their combined wealth rose 23 per cent in 2017, Rashbrooke called for the gathering of wealth data in New Zealand to fill a statistics gap that leaves us guesstimating the extent of wealth inequality.

Wilkinson is concerned about material hardship (he does not speak of poverty in New Zealand), rather than low incomes.

Living in a loving low-income home with aspirations is not a terrible thing, he says.

Wilkinson says he is worried Prime Minister Jacinda Ardern would ‘‘just throw money into benefits, which will lift 100,000 kids over some arbitrary line, and declare victory over poverty’’.

‘‘It’s not like that,’’ he says. ‘‘The kids will still be being abused and neglected.’’

But for Wilkinson, inequality of opportunity to acquire wealth in the form of a home has reached unfair levels.

When he bought his first home in the early 1970s, prices were around three and a half times household incomes. Now, in Auckland, prices are around 10 times household income.

The factory workers he played football with in the 1970s owned houses, he says.

Rashbrooke says property prices and rising rents have exacerbated inequality, both in terms of wealth, and in afterhousing costs income.

But he sees the New Zealand Initiative’s focus on housing as being in part motivated by a desire to deconstruct planning laws and environmental protections.

Rashbrooke says that when he asks Kiwis to tell him which society is more unequal – classridden Britain, or classless New Zealand – they are shocked to learn there’s little difference between the income inequality of the two countries.