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Home / New Zealand

<i>Richard O'Dowd:</i> Another look at McGehan Close

28 Feb, 2007 04:00 PM4 mins to read

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Opinion by

KEY POINTS:

Inevitably Mr Minto will trot out examples of how hard done by certain social groups in society are. So he uses the recently much publicised McGehan Close, that alleged cauldron of economic despair and blunted aspiration, complaining about the fact that 80 per cent of the street's residents are employed.

He needs to acknowledge that being employed in a low-paying service sector occupation doesn't automatically consign one to poverty, unhappiness and severe hardship. In fact the opposite seems at least partly true if we look more closely at the financial situation of his anonymous Samoan family, the male of which works 50-60 hours a week and his wife 20 or so hours. On the pay rates quoted this family is earning around $43,000 gross a year.

If this family are New Zealand citizens or permanent residents they will qualify for the Working for Families package, an extra $197 a week (based on having three children between 0-12 years of age).

The average wage is $31,720 a year. The family's possible total income is $52,000 - not a fortune but above the IRD and Government's definition of what constitutes a low income or severe hardship. The threshold or poverty line is set at roughly one and a half times the equivalent superannuation rate.

The Working for Families assistance effectively negates the tax on this family's income; no doubt another worker marginally higher up the economic ladder subsidises this "social charity". Some prefer to call it "income redistribution".

If the family are renting from Housing New Zealand they may well pay up to $370 a week. That would enable them to live in a four-bedroom brick-and-tile house in Manurewa - a long way from McGehan Close.

The father's fear of the trouble his son may get into at school is a difficult issue. Nevertheless, maybe his apparently less-than-satisfying work is being done in the hope (or even belief) in a different, brighter future for his children.

Mr Minto did not enlighten us as to the parents' attitudes towards their work. It seems implicit that the parents are necessarily unhappy in their work or are exploited by an unscrupulous free marketer.

Even if that is the case, the Samoan parents of McGehan Close are not unique in doing work that is less than fulfilling or helping to bolster the bottom line of corporate business or indeed assisting through personal taxation those on lower incomes, whether they want to or not.

We should ignore Mr Minto's disdain of John Key's apparent Victorian perspective on the question of help for the poor. At least concerned Victorian "reformers" of the Industrial Revolution recognised the needs of the less than fortunate in society and wanted to help. The immeasurably better working conditions and enlightened labour legislation of the modern world, particularly New Zealand, is their direct legacy.

All the same it is uncharitable to criticise Mr Minto's genuine social concern. His heart is clearly in the right place. It is also not difficult to agree that successive governments have failed in various economic policy areas, particularly the manufacturing industry.

That example of failure, however, needs to be seen in an international context. The New Zealand domestic/export manufacturing market is just one of many that have been swamped by cheaply produced Chinese consumer products. The days of competitive domestic manufacturing are long gone.

As to those semi-mythical manufacturing jobs Mr Minto seems to think the partially skilled used to have a monopoly on, it is highly debatable as to who is responsible for their rapidly diminishing presence in the New Zealand economic landscape.

It appears as if the degradation of the working classes' traditional employment base has grown exponentially worse the longer a Labour-led government remains in office. A mirror held up to Labour economic policy for the period simply reflects a contingent rise in Asian imports.

But for one family, at least, it is hard to sustain the argument that lack of income is the most pressing issue.

* Richard O'Dowd lives at Castor Bay in Auckland.

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