Leaving our Wounded Behind

 VIEWS FROM OUTSIDE THE APIARY: IAN FLETCHER 

How can we improve the lot of all New Zealanders? It’s obvious really, argues Ian Fletcher, so why are our politicians not doing it?

By Ian Fletcher

It’s hard to write this sort of column in 2025 without making it about Donald Trump and his consequences. I’m going to avoid that, and instead focus on social cohesion in New Zealand – the subject of a disturbing report this week published by the Helen Clark foundation. Whatever you think of Helen Clark, we need to deal in facts, not personalities, and this is both important and urgent.

Whatever you think of Helen Clarke, the recent findings of the Helen Clark Foundation must be taken seriously says Ian Fletcher. That being, that the level of inequality in New Zealand society is wide-ranging and “quite frightening”.

A word of context. Regular readers (I’m grateful to you all) know that I see New Zealand’s core problems revolving around chronic economic underperformance (i.e. the failure to tackle productivity seriously or intelligently), institutional sclerosis (government by clots), with serious consequent shortcomings in local government finance, health, education, and physical infrastructure. I wrote earlier this year about the resulting ‘doom loop’ as many people give up, and move to Australia. That analysis holds, I’m told.

This week’s report apparently both supports that analysis and qualifies it in a sobering way. The report’s author says that inequality shows up as a “quite significant variation in almost every dimension. Everything from feeling safe to a sense of participation, financial comfort, sense of worth… it's all related. It's quite frightening.” Crucially, the author argues that on the same dimensions, Australians live more cohesive lives.

This is consistent with what Australian politicians have told me, that when they visit New Zealand they see that well-off New Zealanders live just like well-off Australians, but they see less well-off New Zealanders living in much worse circumstances than they expect. The former Education Secretary, Lesley Longstone, once described schools in New Zealand as having unusually wide variation in attainment, with the gap very stark between schools serving affluent communities and those serving less well-off communities. That was over ten years ago, but the current debacle over school lunches reinforces her point: there are just too many kids in families that are too poor to provide for their kids.

Australia, the “lucky country, run mainly by second rate people”. New Zealand may only have the later.

Other recent research points to policies of ‘wage suppression’ being followed in New Zealand since the 1980s, to keep wages low in the mistaken belief that it would make the economy go better. Instead, it’s taken pressure off employers to improve productivity, reduced savings, kept people out of the housing market (which has inflated for other reasons), and immiserated many.

Looking ahead, we need to take this seriously. The wider context is one where many working people face a relatively bleak future. Global research points to the growing role of inheritance in setting lifetime earnings, and to the impact of AI on the jobs of many – the first solid evidence of this was reported in the Financial Times this week, as demand for software coders and people who handle correspondence for insurers and similar service providers has started to drop inexplicably – the very areas where AI adoption is most advanced. There’s also evidence – anecdotal so far – of skilled people preferring to work with machines than to train their own successors. In the future, you really won’t be able to get a plumber.

If we don’t take it seriously, what happens? Firstly, people who feel unheard – that their story and their needs don’t matter – get angry. That doesn’t help get sensible governments elected, nor issues debated. Emotions tell us what’s important, but not what to do about them. Secondly, we lose access to the skills of the alienated and disaffected. Maybe they drop out, or buzz off. In a world of falling populations (the world we’re heading into), hanging on to skills is a strategic necessity. We need to acknowledge that intelligence and ability is pretty evenly distributed through the population: poor people are poor by circumstance, not choice. We need to help them get engaged and stay engaged. Social mobility and cohesion are strategic assets.

And finally, our values. I want to live in a community where everyone is valued, where opportunities are available, and where appropriate support is on hand for the less fortunate. I don’t want to leave our wounded behind. This matters to me. Social cohesion is a buzz-word, with unfashionable woke connotations. But a decent life isn’t woke. It’s just common decency.

The solutions are ones we know, or can see from others: higher wages supporting higher taxes (including on capital gains), means-testing and lifting the age of National Superannuation, juicing up KiwiSaver so we all save more, using that money to put the public service on a decent footing, reforming local government finances. Then the productivity agenda can be tackled, with money for education, infrastructure and support for science and genuine innovation.

So, why don’t we do it? An ex-boss used to talk about what he called the political game of “After you, Claude” (it’s a quote from a WW2 radio show), where no one wants to be first, because it looked like a losing position. In New Zealand, no one wants to say “lets tax capital gains and means test Superannuation” though those two steps alone would probably give us the resources for a decent health service, a fleet of Cook Strait ferries, three-course school lunches and more besides.

I have to conclude that our politicians are weak, and deeply tactical. Australia is often called “the lucky country”; the full (rather more insightful) quote is “Australia is a lucky country run mainly by second rate people who share its luck. It lives on other people's ideas…”. Well. We don’t even have the luck; we do, however, have a bumper crop of second rate politicians. We deserve better.

Ian Fletcher is a former head of New Zealand’s security agency, the GCSB, chief executive of the UK Patents Office, free trade negotiator with the European Commission and biosecurity expert for the Queensland government. These days he is a commercial flower grower in the Wairarapa and consultant to the apiculture industry with NZ Beekeeping Inc.