Houses are big in 2013 — big in size and way too big in price for too many people. That is the stuff of big politics.
It encapsulates a distinction between politics’ two sides. The government relies on resetting regulation so the market-economy meets the demand, wants builders to lift productivity, says it will “work with” local councils, particularly Auckland, to get more land freed up so it is cheaper and new houses on it are cheaper and wants councils’ regulatory costs to developers and builders cut.
National ally Federated Farmers disapproves on one count: spreading cities eat up good land. The Feds think cities should go up, not out. On that point they and social liberals agree.
The Labour party and its allies think the market is not enough. They and Auckland’s council point to land within its zoned areas on which builders aren’t building. They note community projects which get people into houses.
They propose “active” government. David Shearer on January 27: “You’re doing your bit. It’s time you had a government that did its bit too.” The “you” was “hardworking, forgotten ” individuals and businesses.
Shearer was in effect pitching to the old folk-notion of a “fair go”, a concrete notion by contrast with social-liberals’ usual anaemic “fairness”. Conservatives, liberals and social-liberals can all go with a “fair go”. So would all those — including some offspring of well-off households — who can’t buy or have to take huge mortgages.
The political problem for ministers is that the market is not delivering affordable houses and shows little sign it will unassisted: in fact, the national average price of a used house here is nearly twice the United States average. Current reforms of local government regulation and attempts to drive more productivity into a building sector populated with small, inefficient firms might make some difference but will take time.
The persisting house bubble’s legacy is an additional inequality, an inequality between the “have-houses” and the “have-not-houses”.
That compounds income inequality which is now bothering some conservatives on social cohesion grounds. One dimension is those on subsistence benefits. The second is those on very low wages, not much better, if at all, than subsistence.
Ministers’ response to benefit subsistence is to get people into paid work, to lift self-worth and income. But if they are paid at the minimum wage or just above, the material lift is small.
The fact that there is a minimum wage at all is, of course, “active government”. But ministers are not keen on lifting the real value of the minimum wage and are legislating to cut it for young people. Their reasoning is that the market will hire fewer people if they have to be paid more.
Politically the government can rest its case for now. People on subsistence incomes are not going to vote in droves for National and allies (except the Maori party where special factors apply). Middling New Zealand is not yet excited by concern for subsistence dwellers.
But there is subterranean change. One example is the campaign for a “living wage”, about 50 per cent above the minimum. It is the subject of a conference late this week.
The government scoffs at this as job-destroying feel-good. Shearer has picked it up, though it is not yet party policy. So has his British counterpart.
The intent of a living wage is to lift low-income households above subsistence. The ideological point is a “fair go”. The practical point is a better start for children, the focus of a growing debate on poverty.
The political point is the process. The core driver is the Service and Food Workers Union, representing many of the worst paid. It has built a coalition of 113 unions, not-for-profits, churches, ethnic associations and other groups.
Such coalitions overseas have moved public opinion and got action, according to recent research. London Citizens, for example, was persuasive in the Greater London Authority adopting a living wage for its employees and employees of its suppliers. (Some big firms have signed up, too.) Wellington mayor Celia Wade-Brown is attracted.
The coalition process differs from hard lobbying by an insider interest-group with its favoured party by building support from the ground up. That is potentially stronger and more durable and more resistant to the sort of dismissive response the government heaps on most Labour-Green-New Zealand First policy ideas.
It is that dimension which marks the living wage campaign out from hand-wringing advocacy.
It is most unlikely to remake government policy quickly. But might it change the politics? Certainly, ministers’ reaction to Labour’s housing push and to the latest unemployment figures (statistics is too kind a word) reflect some nervousness.
On the back of high house prices and soggy wages the SFWU coalition might conceivably change a corner of politics. If so, then by the time it becomes obvious, it might not be simple to reverse the momentum.