– Max Rashbrooke and Peter Skilling
Mon 7 Jun 2021 04.25 BST
Jacinda Ardern can take heart: in the last decade, public attitudes have swung sharply against New Zealand’s persistently high levels of economic inequality. Space has opened up for her to pursue the egalitarian agenda she cherishes – although, conversely, her excuses for not acting have sharply diminished.
Public opinion surveys from the two decades after 1990 showed a consistent trend: decreasing concern over economic inequality, and decreasing support for government action to tackle it, especially through taxes. The pro-market ideas of New Zealand’s 1980s reforms seemed invulnerable.
But new data from last year’s International Social Survey Programme (ISSP) shows a marked shift.
Between 1992 and 2009, the belief that income differences are “too large” fell from 73% to 63%, but by 2020, it had rebounded to its 1992 level. Similarly, the proportion of people who believed government has “a responsibility” to do something about those differences fell from 53% in 1992 to 41% in 2009, but was back up to 51% by 2020. While we don’t know exactly why this shift has happened, we can make some educated guesses.
Inequalities are often sustained by a belief that our different outcomes in life are largely due to our different abilities, effort and contribution. From 1992 to 2009, New Zealanders increasingly believed that getting ahead in life was due to individual effort and hard work, seldom attributing it to the good luck of their upbringing or social connections.
The 2020 survey reverses those trends: while most people still believe that our outcomes reflect our individual merit, fewer people attribute getting ahead in life to hard work. Between 2009 and 2020, there were large increases in the proportion of people saying that your chance of getting ahead in life are importantly related to coming from a wealthy family (from 9% to 17%) or knowing the right people (29% to 41%).
The belief that there are fundamental conflicts between different social groups has also rebounded.
From 1992 to 2009, support fell precipitously for the claim that there is conflict between rich and poor people or between management and workers. But between 2009 and 2020, an increased number of New Zealanders perceived conflicts between rich and poor (from 33% to 37%), the working class and the middle class (11% to 19%), management and workers (34% to 42%), and young people and old people (23% to 33%).
In line with these trends, egalitarian policies are increasingly popular. Support for progressive taxation, under which those on higher incomes pay a higher rate of tax than those on lower incomes, fell significantly from 1992 to 2009, from 72% to 54%, but climbed again, to 68%, in 2020.
Why, though, have attitudes shifted in this way, when income inequality itself is not much changed from its early-2000s level?
For one thing, the effects of inequality are cumulative – and often delayed. In New Zealand, inequality rose more rapidly between the mid-1980s and the early 2000s than in any other developed country. The richest 10% went from earning 6 times as much as the poorest 10% to earning 9-10 times as much.
Such economic inequality can create multiple harms. By denying the poor the income they need to thrive, it can entrench poverty, worsen health and social problems, and lead to wasted talent. And by pushing rich and poor further apart, it can diminish trust, empathy and social cohesion. Even if the level of inequality does not increase, it exacerbates these problems every day it is allowed to persist. Metaphorically, it is like dumping toxic waste in a stream: the waste continues to leach out and damage the environment over time, even if the volume of waste stays the same. These effects can accumulate, but only become obvious with time.
Political decisions themselves can affect attitudes. The previous National-led government’s anti-egalitarian policies – cutting taxes for the highest earners and reducing union powers, for instance – may have heightened existing concern. In the mid-2010s, pollsters UMR found the vast majority of New Zealanders increasingly anxious about inequality. This will have been amplified by the recent prominence of inequality in global debates: just think Occupy Wall Street, the campaigns to get tech giants like Google to pay more tax, or the way Jeff Bezos’s Amazon fortune swelled during the pandemic even as hundreds of thousands of people lost their jobs and faced unsafe conditions.
All this is highly relevant to a New Zealand Labour government that has often ruled out egalitarian policies – notably a capital gains tax and sweeping benefit increases – on the grounds that they lack public support. Of course, concern about economic inequality may not translate into an endorsement of specific policies. The ISSP data shows that support for government action against inequality, although increasing, remains lower than concern about inequality itself, suggesting that not everyone sees government action as the best solution. Other research suggests that the middle classes are reluctant to address poverty if they perceive they will be burdened more than they will benefit.
These are all reservations, though, that can be at least partly addressed by politicians, especially those with the communication skills that Ardern possesses. What is now abundantly clear is that the New Zealand public is no longer operating on the assumptions of the 1980s. The ground of public opinion has been cleared for action against the country’s persistently high levels of economic inequality.
- Peter Skilling is a senior lecturer in the department of management in the faculty of business, economics and law at Auckland University of Technology
- Max Rashbrooke is a New-Zealand-based writer with interests in economic inequality and democratic participation. He is a senior associate at the Institute for Governance and Policy Studies