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Covid-19: Severing the tenuous thread that kept us away from poverty

Opinion article written by Stacey Shortall

Lockdown has been the most dramatic government intervention in most of our lives. To fight Covid-19, our government has closed New Zealand’s borders, businesses, shops, restaurants, cafes, pools, parks, playgrounds, schools, other educational facilities, and sports areas. Perhaps somewhat anxiously, most of us have adhered to government directives to stay home and to await further directives on how we can live our lives. Even now, as there is talk of the alert level potentially dropping, we remain uncertain about what the future holds.

For some of us, this loss of certainty over our lives has been unusual. But, for others of us, far less so.

That is because, regardless of any lockdown, some of us in New Zealand live in a constant state of uncertainty. It sits in the back of our minds every day. We work jobs that pay us just enough to feed and house our families, but without any ability to save for any unexpected costs. So, we pick up extra shifts to provide some more spending cash, but the availability of those hours can change week to week which means we can’t rely on the ‘extra’. We rent homes and business spaces that we can afford, but only until the next rent review and we worry about making ends meet if our landlord increases the amount. We try and pay off our credit card, hire purchase and business debt, but only just and sometimes we can’t, so we might need to borrow more to pay these. We live and operate our businesses with little by way of savings. We break even, but not every month.

As talkback radio and online forums become filled with cries to try and get back to usual life as soon as possible, many New Zealanders would not necessarily welcome a return to their “life as normal” after the Covid-19 crisis passes. That is because life pre-pandemic was pretty challenging.

Sufficiently challenging that missing one pay-check during lockdown tipped us towards using a food bank to feed our family. Challenging enough that closing our workplace doors for a month meant we had to draw the shutters on that business for good.

Covid-19 tipped the scales further than we could manage. It severed the tenuous thread that kept us away from poverty.

It rendered true the uncertainty we always felt about our financial security and stability. The only difference is that now the uncertainty we’ve always felt is being experienced by so many more New Zealanders.

Uncertainty tears at the heart of an economy. It stifles spending, it incentivises cost-cutting, it curbs innovation. Many political and business leaders are warning that our economy is crashing, sectors like hospitality and tourism are collapsing, and unemployment may reach historic levels. Although our government has been quick off the mark with multi-billion dollar packages to address the Covid-19 crisis, there will be no escaping that more of us are about to experience lingering uncertainty - and real hardship - in New Zealand.

Put bluntly, more of us risk sliding towards poverty.

In a country where pre-lockdown it was generally accepted that one in seven households - including around 220,000 children - lived in poverty, such hardship will be nothing new to many of us. But the economic collapse that the Covid-19 lockdown is causing in our country is laying bare the fragility of so many more New Zealand lives.

Covid-19 is bringing to the fore our pre-pandemic failure to deal with our quick and slippery slide to poverty.

Under the lockdown spotlight, it is impossible to escape seeing that poverty now and how many more New Zealanders are staring straight into it.

Media stories have run about the soaring demand for food banks during the Covid-19 pandemic. Press reports have outlined the extraordinary efforts made to accommodate more homeless people during the lockdown. TV news footage has shown the generous donations of learning devices and other assistance to the many school children in our country who are without.

Throughout our country, during lockdown, most of us have united to do whatever we can to protect the lives of as many New Zealanders as possible. We have sacrificed our freedom and liberty in ways that only six weeks ago would have been considered fanciful to even suggest. We stayed home because we accepted that it would save lives - even if we risked our economy being reduced to ruins.

Many New Zealanders have also recognised that the lockdown has disproportionately impacted some of us - our women and children trapped at home with their abusers, our families unable to properly feed their children, our students unable to learn much online, our workers who no longer have jobs, our people susceptible to mental health challenges, our patients for whom surgeries or treatments have been delayed. Scores of us have donated time, money and other resources to seek to soften the blow for others of us so impacted. We have demonstrated the kindness and goodness that runs deep in our wonderful country.

What we were prepared to sacrifice and give to save lives from Covid-19 has been nothing short of incredible.

The question now becomes what are we prepared to do to curb the slippery slope to more New Zealanders heading towards poverty. Because, once our people get there, poverty harms and even kills too.

Babies living in our most impoverished communities are six times more likely to be hospitalised with the respiratory illness bronchiolitis than those living elsewhere in our country. Rheumatic fever continues to disproportionately plague our poorer communities.

A 2018 report released by the Child and Youth Mortality Review Committee found that poverty remains a leading contributor to death in children and young people. Vulnerable children living in poverty were three times more likely to die, with possible contributing factors including living in overcrowded houses. Child Poverty Action Group reports that there are about 40,000 hospital admissions of children in New Zealand every year with preventable illnesses that have links to poverty and unhealthy housing - that’s nearly 2900 times the number of hospital admissions today in our country from Covid-19.

According to the United States nonprofit Bergen Project, a 2017 study found that 23% of our senior population were malnourished. 2018 research from the University of Auckland highlighted the adverse impact of readily available fast food on our impoverished communities and how obesity can lead to death.

Increased unemployment leads to spikes in mental health problems and most sadly suicides including in impoverished communities. In the year to June 2019, 685 New Zealanders killed themselves - that’s around 62 times the number of deaths to date in our country from Covid-19.

While lockdown measures may have saved the lives of thousands of us from Covid-19 now, bad outcomes may still occur. For regardless of whether or not we contract the virus, many of us risk dying from poverty incurred deaths that into the future might most appropriately be described as Covid-19-related.

Saving these lives requires ambitious policies in relation to poverty right now.

Without doubt, Covid-19 will alter our country and way of life for the foreseeable future. A recession is coming, with the potential to see more New Zealanders fall into poverty unless we unite to enable our government to do more to curb that outcome.

  • Making employment more profitable for low-income workers by increasing the minimum wage could matter more than it ever has before.

  • Easing occupational licensing requirements to smooth the path to more people taking up higher-paying lines of work might really help.

  • Channelling funding to improve health services for vulnerable children and families might make a profound difference.

  • Reconsidering a capital gains tax might be especially important.

  • Expanding infrastructure and increasing public works programmes could be key.

  • Having investors and those great New Zealand businesses who have done well in recent years back struggling small and medium businesses could keep people in jobs, and families above water.

  • Harnessing some of the great ideas being proposed by successful business leaders around overseas ownership and construction, improving data infrastructure and focussing on renewable energy might warrant immediate consideration.

Ambitious policies based on such initiatives have the potential to help rebuild our workforce and fuel our economic recovery. They could help prevent working families from sliding into poverty, not to mention reduce the growth of inequality and build resilience against any future public health crises.

Of course, such policies will be expensive and will mean some of us might need to part with our own resources. But in the overall scheme of the extensive Covid-19 financial support provided by the government in the past few weeks, these costs may no longer seem so huge.

Just as Covid-19 starkly exposes the slippery and quick slope to poverty in New Zealand, the disease showcases the clear opportunity to reshape our economy and society to flatten that curve too. We don’t just need our families and children and elderly to survive this pandemic. We need everyone to emerge more resilient and better protected from the poverty consequences of economic shocks. We need to harness the uncertainty we all feel now and seek to prevent so many of us continuing to feel it once our economy stabilises.

As we look forward to coming out of lockdown, let’s unite and be open to making some sacrifices for all these outcomes too.



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