When Jacinda Ardern announced the first lockdown, I wrote that it was the easy bit. More challenging would be tackling the intergenerational inequities it would cause.
I warned that the educational and social development of a whole generation was at risk.
Stimulus spending, I fretted, would soon evaporate into inflation, which "benefits those who own physical assets such as houses but devastates those trying to save, massively entrenching the intergenerational inequality Ardern was elected to address".
But I said governments might be happy with that, since it would inflate away their debts.
Make it your business to know
Start your day with the latest business headlines straight to your inbox.
Worst affected would be low-income families. Child poverty, family violence, crime generally, and youth suicide all risked getting worse.
I raised the problem of distinguishing those dying with Covid rather than of it. While saving mainly baby boomers, I said we needed to recognise we were also "materially and perhaps permanently damaging the lives of the 2 million New Zealanders under 30".
Their interests, I said, "need to be much more explicitly considered" so that "as far as possible, we find a way for people born in 2000 to enjoy a bundle of opportunities as valuable to them as what those born in 1950 or 1975 have already enjoyed".
In particular, "a system must be found for the elderly themselves to pay their fair share of the costs of keeping them safe". "If we're 'all in this together' when it comes to averting early deaths," I said, "we had better all be in it together when it comes time to pay up".
That time is now. Neither Ardern nor Christopher Luxon can say they weren't warned about the economic, educational, social and political timebomb that would follow the Covid response, however necessary.
Grant Robertson's $60 billion spend-up and Adrian Orr's money printing have made New Zealand asset holders nearly $1 trillion better off, while the poor have fallen further into debt.
Nearly exactly as predicted two years ago, the Government has overseen the greatest transfer of wealth from the young and poor to the old and rich in New Zealand's history.
Twenty-something Kiwis considering returning home report London property prices are below Auckland's, while salaries are three times as high. They also know that under 30s are doomed to have to pay back most of Robertson's $60b debt.
The only silver lining of galloping inflation — which Luxon dubs "the cost of living crisis" — is in reducing the real value of Robertson's debt.
His refusal to adjust tax thresholds means that in my opinion he is stealthily increasing nominal taxes on low-income earners through bracket creep. That means under 30s and others will start paying back the $60b earlier than expected, with a surplus now forecast for 2023/24.
Given New Zealand voters' fixation on the fiscal balance over other indicators, my view is that Robertson will hope his undeclared tax hikes deliver a surplus a year earlier, so his 2022/23 books are in the black before election day.
Measures to mitigate inflation — like increasing benefits and the minimum wage, plus general wage hikes — make it worse, risking it getting out of control.
ANZ expects it to peak at 7.4 per cent this autumn, but stand by for worse. While ANZ thinks Orr will double the official cash rate before winter, he hasn't hitherto been so bold.
Grant Robertson's (pictured) $60 billion spend-up and Adrian Orr's money printing have made New Zealand asset holders nearly $1 trillion better off. Photo / Mark Mitchell
There's every chance, especially given the war, that we face prolonged inflation like in the 1970s and early 80s, along with rising unemployment. Stagflation is back, and the young, poor and unskilled will be worst hit.
It's not just economic and financial catastrophes that threaten New Zealanders born around 2000 from enjoying opportunities as valuable to them as what their parents had.
Educators from early childhood centres to universities tell me their 2022 intakes are materially behind those of two years ago, not just academically but socially and with mental health.
Children entering kindergarten haven't had the usual contact with peers and other people to develop language skills, with serious long-term implications. More than a generation ago, the world-famous Dunedin longitudinal study suggested 3-year-olds behind in language development have a 70 to 80 per cent chance of life-long learning difficulties.
Primary and intermediate schools report children whose literacy and number skills are seriously behind new entrants in 2020.
Secondary principals say new students are miles behind, not just in literacy and numeracy but with basic life and self-management skills. AUT researchers say cancelled school sport has serious physical and mental health implications.
While the lockdowns' overall mental health outcomes weren't as bad as feared, attempted suicides by 10-to-14-year-olds increased from 40 a month to 90 following the 2020 lockdowns (suicide rates dropped overall in 2020 and again in 2021). Family violence spiked. South Auckland schools report disastrous dropout rates, with even young children disappearing.
First-year university students, having missed the usual rites of passage in their last two years at school, have mostly started online, with uncertain impacts on progress and retention.
The Dunedin and Christchurch studies suggest children are remarkably resilient if faced with one or two life challenges in their first two decades. What causes permanent harm is the so-called cocktail of disadvantage. That means children in stable homes and good schools should cope, but Covid will be the last nip in the shaker for the less privileged.
The Government plays all this down.
The Ministry of Education has done no research, nor commissioned any, into the effects of lockdowns on the language skills of under 5s or the numeracy and literacy skills of under 13s. It refuses Official Information Act requests for whatever advice it has given to ministers and Cabinet on educational progress since 2020.
At odds with principals, the ministry points to its own June 2021 analysis arguing progress in reading and maths in 2020 among "most broad student groups" was "essentially unchanged or even positive compared to 2019". It concedes "progress in writing is slower than usual" with "more educationally meaningful" impacts.
Yet it claims "there has been no significant change in equity of learning along decile or ethnicity during 2020" and "no strong evidence that learning has reduced substantially more for students in Auckland, who have been affected by multiple lockdowns".
If that's all true, we might wonder why the Government even bothers running schools for years 4 to 10 students.
In the real world from which the Wellington bureaucracy is detached, a vast effort will be needed to address this intergenerational timebomb.
Massive new resources will be needed for New Zealand's world-famous but overstretched reading recovery programmes, special needs and school support services, social investment that goes far beyond income support, and our already overrun mental health system.
These new resources must be invested not just competently — which seems beyond the current Government given its failed interventions in housing, poverty and mental health over five years — but masterfully.
It will be necessary to recruit special-needs teachers, social workers and mental health experts from abroad, but in a tough global labour market. They will demand international rates. The question, as always, is who should pay.
It's unrealistic to expect the baby boomers, those whose lives have been extended, to pay a special tax. Their parents had the excuse they had spent their formative years in Crete and North Africa rather than Redwood and Nambassa, but baby boomers will just as quickly throw out any government that hints those still earning after their 65th birthday should pay a surtax on their superannuation. God forbid anyone touches their Super Gold Cards.
In which case, I'm sorry to tell today's under 30s that they'll probably end up paying for their own Covid recovery with higher taxes throughout their lives. More likely but worse, no one will bother helping them recover from the sacrifice they made to keep a few thousand baby boomers alive. And Ardern and Luxon will have left the stage before the impacts fully hit home.
- Matthew Hooton is an Auckland-based public relations consultant.
Comments