Illustration by Tim Denee – www.timdenee.com
Before this election campaign began, there was a lot of angst about our income gap with Australia. We will hear more about it during the election campaign. That alone makes this Bertelsmann Foundation report on social justice indicators within the OECD worth reading. The report is summarised in tables here.
What it shows is that on six key indicators of social justice, Australia performs badly in comparison with New Zealand. Perhaps that explains why many New Zealanders who go to Australia expecting to find El Dorado, belatedly discover that Australia can be a very, very hard place to live.
The report analysed the 31 OECD member nations in terms of six key indicators: poverty prevention, access to education, labour market inclusion, social cohesion and non-discrimination, health, and inter-generational justice. On a weighted ranking of all these social justice indicators, New Zealand came 12th out of 31, while Australia ranked 21st.
Poverty was defined not in any absolute way, but in terms of relative income levels. Within each country, the report measured what proportion of the population was living on less than half the national median income. (Across the OECD, the average was 10.8 %.) New Zealand scored badly at 21st out of 31 but Australia fared even worse, coming in 28th. The United States incidentally, also did very badly on poverty prevention – it ranked 27th, with a massive 17.3% of its population subsisting on less than half the median national income.
On child poverty we were 18th and the Australians 22nd. On old age poverty, (where the ratio of over 65s living on less than half the median national income was measured) the OECD average was 14.5%. In New Zealand however, a worrying 23.5% of over 65s were in that subsistence group, but in Australia the comparative figure was a whopping 39.5% of over 65s. What such findings indicate is merely comparing the benefit levels in each country will not tell you as much about hardship among the elderly, as internal comparison within each country, of the relative income levels. It also suggests that the Bolger government’s cutting of the pension rate from 80% of the average wage to 65% is still having poverty repercussions.
The Bertelsmann Foundation report also measured access to education and the extent to which socio-economic status influenced educational performance. New Zealand ranked 12th, and Australia 25th on that index. When it came to spending on early childhood education New Zealand ranked 14th and Australia 29th. On labour market inclusion, ie fair labour market policies and policies on employment and unemployment, Australia scored a couple of rare victories : it rated 5th, and New Zealand 6th. On employment/long term unemployment responses it ranked 8th, while New Zealand ranked 10th.
However, the report contained some interesting comments about New Zealand’s labour market situation:
New Zealand’s strong showing has been achieved by government borrowing as well as its labour market policy. That [policy] includes working hours progress, extended transfer payments and active labour market policies alongside longer term measures to reduce non-wage labour costs. Nevertheless, areas of concern remain, such as the differentials between urban and non-urban areas, and the unemployment rate among the Maori population, which was more than 15% at the end of 2009. Differences in rates across the groups reflect the growing shortage of skilled and professional labour. Government policy responses to these skills shortages have been limited, apart from the use of targeted immigration criteria…
On access to health services, the report measured to what extent the health services available are inclusive, and to what extent individuals felt that their access was dependent on their socio-economic status. Here, New Zealand ranked 2nd and Australia 6th on objective measures of access to health services – while on the subjective measure of whether people felt their income dictated their access to the health system New Zealand ranked 1st and Australia came 5th. Clearly, in this area at least, our sense of egalitarianism still endures.
On social cohesion and non-discrimination, New Zealand ranked 5th and Australia 9th. In the findings on income inequality though, both countries fared badly. On Gini co-efficient measures of income disparity, New Zealand came in 23rd out of 31, and Australia 24th. The report comments on social inclusion and non-discrimination made a telling point about Canada, Australia and New Zealand – pointing out that one reason they may have scored so well on social inclusion and discrimination indices was because their immigration policies were so selective. Such policies, the report said, “attract immigrants that are self sufficient financially, and can be easily integrated into the labour market.” Germany, it went on, operates in a quite different world, where some 20% of the population – or some 15 million people in all – have an immigration background.
Lastly, on intergenerational fairness – which is a measure of family and pension policies, and environmental policy – New Zealand came in 10th, and Australia 14th. In sum, this report will give fresh ammunition to those who feel that the customary focus on economic measures of national performance are misleading. Yes, the income gaps between New Zealand and Australia are a key factor – but so are the social justice indicators measured in this report. And they show that New Zealand has no reason to feel inferior about comparisons with Australia, when it comes to the wider issues of social justice.