Too Much Money: How Wealth Disparities Are Unbalancing Aotearoa New Zealand

by Max Rashbrooke

Today, someone in the wealthiest 1 per cent of adults – a club of some 40,000 people – has a net worth 68 times that of the average New Zealander.

Too Much Money is the story of how wealth inequality is changing Aotearoa New Zealand. Possessing wealth opens up opportunities to live in certain areas, get certain kinds of education, make certain kinds of social connections, exert certain kinds of power. And when access to these opportunities becomes alarmingly uneven, the implications are profound.

This ground-breaking book provides a far-reaching and compelling account of the way that wealth – and its absence – is transforming our lives. Drawing on the latest research, personal interviews and previously unexplored data, Too Much Money reveals the way wealth is distributed across the peoples of Aotearoa. Max Rashbrooke's analysis arrives at a time of heightened concern for the division of wealth and what this means for our country's future.

Genres: Nonfiction, Economics

255 pages, Kindle Edition

Published November 23, 2021

Reviews

[Keen Reader · Rating 5 out of 5]

THE RETURN OF THE LANDED GENTRY

“We talk a lot here about giving more. We don’t talk about taking less.”

Anand Giridharadas.

Rashbrooke gives us a decent background and history into the origins of property and wealth in NZ, particularly in the South Island, telling us about the likes of the so called great sheep lords (sounds like something from a cartoon). But he does a solid job of showing how from the very origins there was widespread inequality among the white settlers, never mind the vast gulf between them and the Maori.

“Under the current settings, New Zealand could increase the well-being of the best-off by a notional ten points, decrease that of the worst-off by five points, and declare success because well-being had increased overall.”

The ongoing myth of egalitarianism and a classless society within the Antipodes has always amused and annoyed me. Poverty and wealth cannot be separated, they are inextricably linked. High earners pay far less tax in NZ than they would in other English speaking countries,

“People on more than one and a half times the average wage pay 22% of their income in taxes, as opposed to 32-40% in Australia, Canada, Ireland, the UK and the US. Unusually by global standards, New Zealanders also face virtually no taxes on their wealth. Capital gains are not taxed in any systemic way, nor are inheritances, gifts, land-holdings, house sales, properties (with the exception of local council rates) or assets in general. These tax failures leave the state with little revenue to pay higher benefits.”

“In the period 1985-2005 it (income inequality) rose more rapidly in New Zealand than in any other developed nation, profoundly reshaping both society and economy.”

NZ had the developed world’s largest rise in inequality in the two decades from 1985, as the effects of the Fourth Labour Government kicked in and the rich and powerful enjoyed tax breaks (it had been over 60% since 1940 but was now cut to just 33%) at the expense of the majority below them. There followed a hasty sale of precious, public assets, at knockdown prices, transferring common wealth to a small group of individuals. They also introduced GST which took a far bigger chunk out of the poor than it did the wealthy.

Then in case that wasn’t enough the country got Bolger’s National government and their notorious “mother of all Budgets” in 1991, selling off state houses, over charging tenants they could ill afford, The Employment Contracts Act 1991, made it harder for people to bargain collectively and helped people covered by a trade union from around 70% to its current 17%. Inheritance tax was also abolished in 1991. Later on Key and English’s National governments would cut top tax rates and raise GST.

Unlike many other countries NZ has no upper limits on the amounts wealthy individuals can give, these donations can remain anonymous, below $15,000. It’s really no surprise to see how and why such a gulf between the rich and poor has opened up. At least four of the country’s six main parties have recently or are under current investigation, including Jacinda’s Labour government, about serious allegations of failing to properly declare donations.

“In 2017, roughly a fifth of the assets within New Zealand’s border were owned by foreign investors. Among these are the country’s four largest private landowners, all forestry companies.”

So this is an excellent overview of where NZ currently sits in terms of inequality and gives a worrying idea of where we are headed. It’s hard to have any faith in the current Labour government, which has never looked so lost, weak and unpredictable. Jacinda is too frightened to introduce CGT, and has yet to produce anything else to meaningful combat the problem, and unfortunately donning a burka or performing a few hongis for the media is not gonna get NZ out of the housing crisis, the childhood poverty rates, the dwindling literacy rates, the worrying rates of youth suicides or the hospital bed shortage. And we haven’t even mentioned climate change, the biggest company in the country and their impact on the environment or how their lobbying has allowed goalposts to be moved time and time again.

They told us we were “a team of five million” when they wanted a buzz phrase for Covid, but in the day to day reality it’s really every man for themselves and the rich get rich and the poor get poorer. The label may be different, but the wine still tastes the same.

[Sariya · Rating 5 out of 5]

An insightful and well-researched look into wealth inequality in Aotearoa covering areas such housing, education, social capital and inheritance. I found it fascinating learning more about the roots and development of this inequality from colonisation to present day. Would definitely recommend to any New Zealander who is wanting to learn more about the disparities of our economy.

[Dan Organ · Rating 4 out of 5]

A well-researched look into wealth inequality in Aotearoa/NZ. It was interesting learning about the growth in inequality from colonisation to present day. I would definitely recommend to any New Zealander who is wanting to learn more about the disparities of our economy.

[Hannah Shingler · Rating 2 out of 5]

A good overview of various intersecting factors that contribute to wealth disparities, was hoping for a Nicky Hager type gritty-ness, so Ive perhaps judged the book in complete contrast to it's intention. Albeit, BWB feels like the Verso of NZ; a real mix of quality texts and then some more general and loose titles that remain in good faith but are a tad dull.

[Rajiv Sondhi · Rating 5 out of 5]

Over recent years I have read much commentary in the media about the rising economic inequality in many countries around the world, and the challenges this presents to our generation. This book is the first one I have read about how this issue impacts our New Zealand. The writer presents a detailed and disturbing picture about wealth disparities in the country and how poverty is being mainstreamed and reinforced across large sections of the population. There is convincing narrative about how complex this challenge is, the likely outcomes and how it defies easy solutions. The writer's narrative is generally well supported by analysis and data from a large number of research sources. I enjoyed reading this book - it gives a good basis to have an informed conversation among people from all political colors. One area that could have been strengthened further in the book is a more intensive discussion on policy options to overcome these challenges.

[Julian Hitchman · Rating 5 out of 5]

This really feels like mandatory reading for our times, for those of us living in Aotearoa. This book made me angry but also gave me hope for a future that is more equitable and one where we focus more on our collective health and wealth and less about individuals.

[Josh Wilks · Rating 5 out of 5]

Great analysis bringing piketty's capital to nz

[Kathryn Ovenden · Rating 4 out of 5]

Hmmm many research projects to be done. Many ideas to consider. Hmmmm. A TL;DR or executive summary version would be a useful complement

[Miriam Williams · Rating 3 out of 5]

Interesting read, but mostly focuses on the problem and not potential solutions