Have We Abandoned the Egalitarian Society?

Inequality is not confined to income and wealth; it is in our healthcare and education systems. Is Labour trying to reverse the trend?

Eighty years ago, the First Labour Government imbedded New Zealanders’ aspirations for an egalitarian society in the welfare state it created. Thirty years ago, both the Labour and National Governments began an assault on that egalitarianism and the traditional welfare state.

The most obvious step was the cutting of top tax rates both explicitly and also by switching the way that dividends were taxed. The result was a major surge in top New Zealanders’ after tax income.

The cuts had to be paid for (especially as the neoliberal policies stagnated the economy). This was done by vicious reductions to benefit levels, higher taxes on workers, and cutting back on government spending. Income inequality rose sharply.

The impact of the spending cuts was less obvious. But what they meant was that not only did those at the bottom suffer loss of spending power but they also suffered from inferior healthcare and educational services, compounding the destruction of the egalitarian society.


What has happened to healthcare is nicely illustrated by an international analysis of healthcare systems by the prestigious (American) Commonwealth Fund. It compares 11 countries (it always finds the US has the worst system). In 2017 it found New Zealand’s ranking was 8th (out of 11) on the equity dimension, ahead of France, Canada and the US. We were behind Britain, Netherlands, Sweden, Switzerland, Norway, Germany and Australia.

Equity in healthcare is quite a complicated issue. The measures which informed the Commonwealth Fund’s conclusion included the following: Among low income adults in the 11 countries, we came

  • 7th among those who had cost-related problems in the previous year;
  • 2nd of those who didnt have to wait six days or more to see a doctor or nurse (a good feature of our system);
  • 5th among those who had to use an emergency department;
  • 6th for patients whose doctor did not have enough time to explain things; and
  • 6th= of those who had administrative coordination problems in the past two years;

Among all adults, we came

  • 9th of those with cost-access-related problems,
  • 7th= in terms of those had skipped dental care in the past year because of cost; and
  • 10th in terms of those who had waited two months or longer for a specialist appointment.

All in all, a bit of a curate’s egg – good in parts. But the overall conclusion is that comparatively we do not do well.

The Ministry has a program looking at equity in healthcare. Most of their papers which I have seen focus on ethnic inequality and rarely pay much attention to income, class or postcode. Instructively, the funding of District Health Boards either has no component for equity or, insofar as a couple of ‘adjustors’ might be thought ‘equity’ (rural and ethnic), they make up less than 3 percent of total funding.


In contrast, the schooling system claims to be directly funded to offset inequity. However only 3 percent of the total resourcing (operational and staffing) provided to our schools is allocated on the basis of disadvantage. Comparable international jurisdictions allocate around 6 percent.

(I was a bit shocked by this. We have a clumsy system of ranking schools by deciles, with numerous downsides, but the upside is only a miserable 3 percent funding across the system.)

Some international surveys suggest that the outcomes of our education system are more unequal than those of other OECD countries. The bottom is sometimes referred to the ‘brown tail’ but there are more non-browns it. (We often attribute our social failings to Maori and Pasifika people; a neat excuse which means we can ignore general systems failure. It is also unfair to them.)

Interestingly, the recently published report by the Tomorrow’s Schools Independent Taskforce. Our Schooling Futures: Stronger Together specifically addresses equity issues. It notes that international evidence shows that a policy that emphasises school competition and choice often increases ethnic and socioeconomic segregation rather than improving the access of low-income students to schools thereby serving middle or high-income students.

Yet most of the criticism of the report’s recommendations avoids equity issues, focusing on how well the advocate’s school is doing in the system. Exactly.

A recent contribution has been from the NZ Initiative’s report Tomorrow’s Schools: Data and Evidence. Unfortunately it is only note of six pages, which does not meet the standards of a research report, so I can hardly comment on the quality or veracity of the findings. 

The note observes there are performance differences among schools (it uses NCEA attainment as a measure). No one is surprised that higher-decile schools outperform lower-decile schools by a large margin (on average). However, once the NZ Initiative adjusted for the effect of family background (they dont explain how), they found that the average differences in education outcomes across school deciles disappears. The report concludes that the inequality in education outcomes evident in school league tables is not a result of large differences in school quality, but rather of large differences in family background, particularly differences in parental education.

The NZ Initiative concludes that their ‘research’ demonstrates that the current schooling system is working and should be retained. Maybe; one wants to see the research first, especially as it contradicts the international literature. (I can think of a number of ways one could do the exercise – not all of them would be valid.)

What strikes me is that the NZ Initiative barely observes that the research suggests that the main source of educational inequality (and a whole lot of life opportunities which follow on from it) is ‘family background’, whatever they mean by that. The implications for inequality are hardly explored. As far as I can infer, the NZ Initiative is so besotted with defending the competitive model of schooling it is uninterested in the wider questions of the sources of and policies for children’s opportunities,; issues central to the egalitarian society. That, I think, captures a deep attitude of the elite right; ‘who cares about social inequality providing we are doing all right’.

Indeed there is celebration of inequality when the rich display their wealth. Of course there was inequality in the egalitarian society before 1985, but it was rare for the rich to show it, to display, what Thorstein Veblen called, ‘conspicuous consumption’. After 1985 it became common to flaunt how rich you were.

Transforming New Zealand?

Jacinda Ardern promised her government would be a ‘transformative’, although she is yet to tell us what she means. Let me make a guess. To the above two cases, add the Child Poverty Reduction Act and the (thus far unsuccessful) struggle to ensure everyone has decent housing. It may be that the government’s ambition is to shift New Zealand back towards an egalitarian society, albeit a different one because of the increase in diversity.

It will not happen easily. The anti-egalitarians are well entrenched. Some will say that the ambition is to revert to the past. Others might recall the 1984 Labour campaign song ‘Up there where we belong’. Up there, Mickey Savage and Peter Fraser may be smiling benignly down on her.