Critical issues for New Zealand such as poverty, the environment and education each need a much more integrated approach by government, a Victoria University of Wellington pre-election public forum on policy has heard.
The forum brought together a selection of contributors to the latest, special election issue of Policy Quarterly, published by the Institute for Governance and Policy Studies in Victoria’s School of Government.
Jonathan Boston, Professor of Public Policy at Victoria, Editor of Policy Quarterly and author of ‘Alleviating Poverty—issues and options’ in the election issue, welcomed Prime Minister Bill English’s reversal of National’s position on poverty targets.
“Now we have targets from both the centre left and the centre right. And I suppose the main conclusion that can be drawn from this is that, regardless of which combination of parties forms the next government, children and many others with lower incomes are going to be better off. And I think that’s great.
“But I do think we need to have some serious discussion about the policy framework around reducing poverty,” Boston told the forum audience.
“We need to have a thoughtful comprehensive setting of targets. Not just focusing on one target — in this case, for the Prime Minister, it’s the 50 percent of median household disposable incomes before housing costs. Now that is one useful measure. But it’s only one of a number of measures and the Expert Advisory Group I co-chaired some five years ago recommended we have a framework with at least four or five measures: an income-based measure, a material deprivation measure, a severe poverty measure and a persistent poverty measure. And nothing I have read since that work was done has changed my mind on the desirability of having a mixed system of measures with medium- and long-term targets for each measure.”
Boston said there hasn’t been a serious debate during the election about what strategies and policy mechanisms would be most cost-effective in reducing poverty.
And he highlighted the importance of indexing benefits and tax credits.
“You can develop all the environmental policies and economic instruments you like, but if they are contested by other economic and social policies, then they’ll tend to fall to the wayside.”
“Strangely enough, despite having a very well-indexed system of superannuation for at least a quarter of a century, this country has never had a comprehensive, principled system of indexing family assistance or housing assistance and strangely enough none of the three parties’ policies I’ve handed out [to the audience—National, Labour and the Greens’] commit to a comprehensive system of indexation. Without that, well it’s inevitable what’s going to happen, even in low inflation times, and that is that people will get worse off until there’s another adjustment.”
Boston said New Zealand needs “a proper independent review of the whole tax-welfare interface. Not just a review of tax policy or a review of welfare policies but one that thinks about this in a comprehensive, holistic way recognising all the interconnections and comes up with recommendations that are future focused, taking into account … demographic change, technological change, changes in the nature and diversity of society, and so forth.”
He did not see a universal basic income as a viable mechanism for tackling poverty.
It would cost too much, he said: “If you have a reasonably generous one, it’s going to be tens of billions of dollars. You can just do the maths. If everyone was to get $12,000 a year per capita, multiply that by close to five million and you get a very large number [i.e. around $60 billion]”.
At the same time, he said, there would still be people needing supplementary assistance.
“One of the attractions of universal basic income is simplicity but my personal view is that while you may be able to simplify some things you are still going to have quite a complex regime of different forms of assistance … We could still have several dozen.”
While there is a role for social investment and its targeted approach, said Boston, it needs to be part of a mix that includes universal assistance, particularly for families with young children. “Just as we have a universal component at the end of life, I think there is justification for having it at the beginning of life.”
Dr Marie Brown, a Senior Associate in Victoria’s Institute for Governance and Policy Studies, Practice Leader–Policy for environmental consultancy The Catalyst Group and co-author of Policy Quarterly article ‘Big Issues, Bigger Solutions—are bottom lines enough?’, also stressed the importance of an integrated approach.
“New Zealand’s environment is in a great deal of trouble. It’s in a bad way across lots of elements and they’re declining, so there’s genuine downward trends across the board. The usual response to that is agencies make regulations and that constrains your ability to do environmentally damaging activities. Or does it? It only does that when the regulation is effectively implemented and is an appropriately responsive policy tool,” said Dr Brown.
“There’s no getting away from this underfunding in our education system in terms of the expectations we have, and those expectations have been growing.”
Regulation on its own is not enough, she said.
“So what do you do? You add economic instruments. Economic instruments support the regulatory outcomes by changing the incentive on individuals’ and companies’ behaviour.”
But that’s not enough either, she said.
“Because you can develop all the environmental policies and economic instruments you like, but if they are contested by other economic and social policies, then they’ll tend to fall to the wayside.”
The argument Brown and co-writer Theo Stephens, a retired conservation scientist, make in their article is for an integrated approach using economic instruments to both cure environmental ills and have benefits in social and economic spheres, she said.
“The status quo is untenable for environmental purposes. Further fiddling is a waste of your time and mine. What we need are political choices that will put the environment as an integrated consideration rather than something on the curb-side we think about when we’re in surplus.”
Dr Cathy Wylie, Chief Researcher at the New Zealand Council for Educational Research and author of Policy Quarterly article ‘Education in or for the 21st century?’, spoke of the need for big-picture thinking, too.
She described resourcing as a “deep and abiding” issue in education.
“There’s no getting away from this underfunding in our education system in terms of the expectations we have, and those expectations have been growing,” said Wylie. “So we’re not in a situation where we can blithely say there’s enough money going around in the system. There isn’t.
“One figure I find very interesting is we do national surveys in schools and two years ago over half the secondary principals were telling us their ability to provide a broad curriculum depended on their international students. What does that tell us about the funding of our secondary schools?”
But Wylie said resourcing isn’t just about putting more money into schools or class sizes.
“These are very popular things to talk about but actually it’s the infrastructure behind our system that’s also important. Our public service cap, for instance, has made it very, very hard to provide good advice and really knot the educational sector together. There’s a lot of fragmentation, there’s a lot of suspicion, that make it really hard to progress.”
Other panellists at the forum were Professor Norman Gemmell, Victoria’s Chair in Public Finance and author of Policy Quarterly article ‘Reforms to New Zealand Superannuation eligibility—are they a good idea?’; Chris Nixon, Senior Economist at the New Zealand Institute for Economic Research (NZIER) and co-author of ‘Quality Regulation—why and how?’ with NZIER Senior Fellow Dr John Yeabsley; and Paul Conway, Director Economics & Research at the New Zealand Productivity Commission and author of ‘Productivity and Changing Technology’.
These and other articles can be read in the free download of Policy Quarterly.