On August 1, 2017, seven weeks before the national election, New Zealand’s Labour Party leader resigned after his party’s support plummeted to a catastrophic low of 24 percent. Deputy Leader Jacinda Ardern took his place, becoming the youngest Labour Party leader in its history.
The change rejuvenated the campaign. In the first 48 hours after the change in leadership, $200,000 (US$140,000) in new donations poured. Commentators dubbed the phenomenon ‘Jacindamania’.
By early September the party’s support had almost doubled. On September 24, in coalition with the Green and New Zealand First parties, Labour formed a new government.
Without risking much oversimplification one might describe the guiding principle of the new government as “women and children first”. Which doesn’t mean narrowly focused. Women are 50 percent of the population and an even higher percentage of those living in poverty. They are by a wide margin the nation’s caregivers, offering unpaid care for the young and elderly at home, and poorly compensated care too much of the population in day care centers or hospitals or rest homes.
“We were the first country where women fought for and won the right to vote, so I don’t see any reason why we shouldn’t continue to be a leader,” Minister for Women Julie Anne Genter told Bloomberg News.
Ardern created a new portfolio, making herself Minister for Child Poverty Reduction. “It’s a personal priority for me, a commitment for me, one of the reasons I am in politics,” she explained.
One way to assure a secure childhood is to enhance maternal safety. New Zealand suffers from one of the highest rates of domestic violence in the developed world. In July, Parliament granted the victims 10 days paid leave to allow them to leave their partners, find new homes and protect themselves and their children.
They can also fast-track flexible work conditions to ensure their safety, such as changing their work location, changing their email address and having their contact details removed from the business’s website. Green MP Jan Logie, who formerly worked in a women’s shelter and spearheaded the initiative explains, “Domestic violence doesn’t respect that split between work and life. A huge amount of research tells us a large number of abusive partners bring the violence into the workplace. Be that by stalking their partner, by constant emails or phone calls or threatening them or their workmates. And some of that is about trying to break their attachment to their job to get them fired or get them to quit so they are more dependent on their partner. It is very common.”
The law goes into effect in April 2019.
To get mother (and father) and child off to a good start, Parliament extended paid parental leave from 18 weeks to 22 weeks. In 2020 it goes up to 26 weeks, almost 7 months.
The law went into effect on July 1, 2018, 10 days after Ardern herself gave birth to a baby girl. She is only the second world leader, after Pakistan’s Benazir Bhutto in 1990, to give birth while in office. She took only 6 weeks maternity leave.
In January, when Ardern and her partner (not husband) Clarke Gayford a tv fishing show host, announced the pregnancy they also disclosed he would be a “stay at home” dad. Which made Jackie Blue, the government’s Equal Employment Opportunities Commissioner very happy. “Of course we need more Jacinda Aderns as role models to our younger women,” she affirmed, “but we absolutely need more Clarke Gayfordds stating loudly and proudly that they will take on the major caring role. We need to change parenthood from a low status job to one that is important and meaningful.”
In New Zealand nearly one in three New Zealand children live below the poverty line. One strategy to deal with that has been financial. In late September Ardern announced that the government had passed a $5 ($US3.5) billion package of tax cuts and payments, “the most significant change to the country’s welfare system in decades.” Of all her efforts she said, “this is the thing I’m most proud of,”
The government is also trying to redirect a welfare bureaucracy built up over a generation that all but treats beneficiaries as enemies. We need culture change,” Ardern announced in April.
In New Zealand, as in the United States, success had come to be measured by a reduction in welfare rolls rather than a reduction in poverty levels. The Ministry of Social Development (MSD) had quotas and rewards for prosecutions and debt recovery, often pursued without justification, while shirking its responsibility to help people obain the benefits they qualified for. And ignoring the fact that child rearing is a 24/7 multi-skilled and never-wracking job that nurtures the next generation.
The MSD had set up a dedicated hotline to allow people to anonymously accuse beneficiaries of benefit fraud. In the first three months of 2017 alone, there were over 11,000 calls in a country with a population only half that of New York City. They resulted in nearly 6000 investigations; over half accused the beneficiary of being in a “relationship in the nature of marriage. A number came from disgruntled ex partners.
“It is no wonder sole parents are terrified to begin new relationships even when that could be the best thing for their future and for their children,” says Susan St. John director of the Retirement Policy and Research Centre at the University of Auckland.
Another of the government’s multi-pronged strategies is a focus on housing.
House prices in New Zealand have risen an astonishing fourfold since 2000, more than 60 percent in the past 5 years according to the Economist. Home ownership is at its lowest level since 1951. The rate of homelessness is the highest among the 36 member states of the (OECD).
Housing prices have been driven up in part because of a tsunami of foreign investment in real estate. “This government believes that New Zealanders should not be outbid by wealthier foreign buyers,” said Associate Finance Minister David Parker. To prevent that from happening, Parliament passed a new law prohibiting foreigners from buying existing homes in August. (They can still build new homes)
To tackle the problem of affordable housing, the new government terminated the former government’s sell-off of state owned houses and has instead budgeted to build 16,000 new homes over the next three years
To alleviate poverty among workers, the government has increased the minimum wage, from $15.75 (US$10.40) to $16.50 (US$10.90) in 2018, rising to $20 (US$14) by 2021. This will largely benefit women and young workers, although the ripple impact will be much broader.
Pay Equity vs. Equal Pay
Broader still might be the impact of a new development in labor law. Like the United States, New Zealand requires equal pay for men and women, and like in the United States, that law has been interpreted as meaning equal pay for the same job.
In 2012, Kristine Bartlett, an aged care worker, tested that interpretation when she sued her rest-home employer. She argued that it is unfair to compare the pay of women only to men within the same occupation since everyone in the occupation itself may be paid less because most of the workers are women. In 2009, nearly half of all women employed in occupations like care workers, nurses, teachers and teacher aides were more than 80 per cent women and these paid less than occupations dominated by men even when the jobs required the same skills. Thus, she argued, wage comparison should be to jobs in occupations not dominated by women.
Several courts agreed. In April 2017 the last government settled the suit by raising the pay levels of 55,000 aged care, disability and home support workers by more than $2 billion (US$1.4 billion.) But at the same time, the then Prime Minister declared the case “unique” and sent a letter to district health boards warning them not to see this as a precedent to be applied to negotiations with mental health workers. And then the National Party introduced a bill that would replace the Equal Pay Act with one effectively precluding this expanded definition of pay equity.
During the campaign Ardern announced, “I am committing that Labour will not rest until we have pay equity in New Zealand.” Immediately upon assuming office, the new government scrapped that bill. In June it offered 5000 mental health and addiction workers comparable pay increases of $3 to $5 per hour. Teachers’ aides are asking for raises based on this new interpretation of the law.
Constraints Both External and Internal
The government’s quest for social and economic justice is constrained by external and internal factors.
Externally, the New Zealand First Party holds the balance of power in the coalition. Indeed, right after the election it wasn’t clear whether NZ First would join a Labour Party-led coalition or a National Party-led government.
NZ First is socially conservative, opposing the legalization of marijuana and the decriminalization of abortion. Social reforms supported by the Greens and Labour may have to await referenda.
NZ First is a law and order party, supporting severe sentencing and more police. And it is anti-immigration.
On the immigration issue, Labour and NZ First have reached a compromise. Immigration will be reduced by a third. Labour will also impose a stricter labor market test that requires employers to prove they’ve tried to employ New Zealanders before they can recruit overseas. Skilled migrants will be required to stay and work in the region for which their visa is issued.
However, on economic policies, with the possible exception of increasing the power of organized labor, NZ First may be to the left of the Greens and Labour. Historically, it opposed the sale of state assets. Indeed, it tends to oppose foreign ownership in general and is furious at what it sees as extortionate profits by foreign owned banks. He wants to beef up the capacity and reach of the state owned Kiwi bank.
The other restraint is self-imposed: the continuing hold on the Labour Party of much of the neoliberalism philosophy that swept the world in the 1980s and 1990s. In fact, the New Zealand Labour Party was one of the first to embrace this anti-state philosophy when it came to power in 1984. In 1990, under the National Party that embrace became a full fledged love affair.
The result, writes Max Rashbrooke, author of Inequality: A New Zealand Crisis, is that from 1985 onwards, New Zealand experienced the biggest increase in income inequality of any developed country. The incomes of the richest Kiwis doubled, while those of the poorest stagnated. “New Zealand halved its top tax rate, cut benefits by up to a quarter of their value, and dramatically reduced the bargaining power – and therefore the share of national income – of ordinary workers… At the same time, New Zealand stopped building affordable houses in any serious quantity, forcing poorer households to spend ever-increasing amounts on rent and mortgages.”
Ardern has declared that neoliberalism has failed but at the same time maintains, “Being fiscally responsible is not akin to a neoliberal agenda.” During the campaign the Labour Party and the Green Party issued a remarkable joint statement on “budget responsibility” in which they committed to continue the existing governments policy of running surpluses and promised to reduce public debt to 20 percent of GDP and spending to 30 percent of GDP, very low levels by international standards.
At this point Labour does not have to decide whether to propose deficit spending. The New Zealand government has a surplus. The question before Labour is how much of this surplus to spend. Its first budget, released in May 2018, answered that question. A portion of the projected $3 billion (US$2 billion) surplus was used to increase spending. But much was untouched and the government projected an increase in the surplus to $7 billion (US$4.6 billion) by 2020.
Fiscal timidity has constrained the new government’s ability to fundamentally address certain problems. For example, during the campaign the government pledged to eliminate the punitive penalty imposed on welfare recipients who refuse to identify the father of the child. A refusal can cost the mother $1500 (US$1,000) a year.
Recently, Social Development Minister Carmel Sepuloni, reiterated that pledge but said it would have to be done over 3 years because of a lack of money. She estimated a cost of $25 million (US$16.5 million) a year. A disheartened Ricardo Menendez March, Coordinator for Auckland Action Against Poverty responded, “Aiming for a budget surplus at a time when inequality levels are at their worst since World War II is not responsible governing. Withholding money from our poorest communities and core public services doesn’t align with a Government that claims to be pulling out all the stops to end homelessness and child poverty.”
Fear of future deficits has also led to tensions between the government and those public employees working in occupations dominated by women, like education and health. A decade-long restraint on public service budgets has resulted in excessive workloads and significant turnover. In July about 30,000 nurses rejected the government’s offer and went on strike for the first time in 29 years. In August, 30,000 primary and intermediate schoolteachers and principals also went out on strike for the first time in 24 years. The issues are not settled. Unrest from these core constituencies may flare up again in November.
Politics is the process of choosing direction. Despite conflicts about the speed of change, New Zealand has chosen a clear path and is making much progress. It is exercising its authority to fashion feminist policies that are driving a progressive agenda for all.