Inequality is easy to reinforce and difficult to reverse, writes Anna Matheson of Victoria University of Wellington, so policies addressing the pandemic and economic crisis must tackle the accumulation of wealth and privilege.

It is far easier for governments to take away control and resources from communities than to give them back.

Covid-19 has shone a laser beam on our health system, bringing into view the essential, hard and emotional work health and community workforces perform. It has also illustrated that if we can keep people out of our hospitals in the first place, all the better. 

The 2008 World Health Organisation Commission on the Social Determinants of Health unequivocally found that, while the health system itself is one determinant, most of health and illness result from the circumstances in which we are born, live, work and play. We need to stop the cycle where communities, particularly those with less to begin with, bear the health consequences of poorly designed economic policies. 

Over the past few decades in Aotearoa New Zealand, we have followed a similar path to the UK. In 1984, we had our own Margaret Thatcher influence, with changes to economic and social policies that began when the Fourth Labour Government was elected. These changes included more private business models within government, a reduction in universal payments such as child benefits and an increase in targeted benefits, set at low rates and designed to only be a ‘safety net’. 

The goal of this macro-economic restructuring was to create more efficiency. The result was a rise in income inequality, which was indicative of other sweeping changes towards punitive, and profit seeking, policy models within health and welfare. The enduring impact has been that even more control was taken out of the hands of local communities, with consequences for health and wellbeing.

In 1999, when Labour again came into power, its agenda was geared towards righting these destructive policies with a strategy of ‘closing the gaps’. Instead, polarising politics exemplified in Opposition leader Don Brash’s speech at Orewa in 2004 directly targeted inequality. Divisive rhetoric helped foster movement within the electorate against what pundits were calling ‘nanny state’ policies. Labour waivered under this electorate pressure, disbanding its explicit inequality agenda. When it lost the general election in 2008, policy action on health and social inequality was further depleted. And because of its focus on equity, ‘public health’, cast as the enemy of individual and corporate rights, was dismantled, eroding its leadership and ability to coordinate.

It is from this weakened state that public health has been resurrected to guide our response to Covid-19. With great luck and serendipity, we have a public health specialist at the helm of the Ministry of Health and a Government willing to listen to scientific advice. The response to the crisis and ensuing high public trust make self-evident the role government has needed to play to protect us from the worst outcomes of the pandemic. Powerful and skilful stewardship has been on display, with communities and businesses alike looking to this leadership for assistance.

There is some irony that former Labour Finance Minister Roger Douglas, a key architect of the 1984 neo-liberal reforms, has recently been reported as saying the Government should use the Covid-19 crisis to address economic privilege. He is right. As happened in 1984, there is real risk policies implemented to protect the economy will perpetuate past system trajectories through big business and professional elites exploiting the crisis to their advantage.   

But as the immediate crisis abates and eyes shift to the economy, it will be telling if we continue to see cynical political rhetoric about the stewardship role governments need to play – especially from those who benefit most. Effective solutions to large-scale outcomes such as inequality, or climate change for that matter, will not abide entrenched simple and ideological constructs of individualism and collectivism. Individual and collective responsibility are related to each other and our policy actions need to reflect this.   

The 1984 reforms showed clearly how inequality is easy to reinforce and difficult to reverse. Indeed, the United Nations World Social Report 2020 has warned that the world is experiencing ‘runaway’ inequality, with current systems continually being reinforced. Inequality is not only about poverty – cycles of poverty are deeply related to cycles of privilege. 

In the aftermath of the pandemic, bold government stewardship needs to continue to protect the wellbeing of local communities and tackle the unsustainable systems of wealth and privilege accumulation that mean there are fewer resources available to ensure our collective wellbeing. The shelved policy of implementing a capital gains tax seems in retrospect like a very modest starting point.

Dr Anna Matheson is a Senior Lecturer in Health Policy in the School of Health at Te Herenga Waka - Victoria University of Wellington.

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