Rioting in New Zealand

The recent riots in the United Kingdom are a warning to the western world. Even in far-off New Zealand there are lessons to be learnt if we’re to avoid similar social upheaval. Because, yes, rioting could happen on the streets of Auckland and Christchurch for precisely the same reasons it’s happened in London and Birmingham.

The story so far

Twentieth century European democracies found an uneasy balance between commercial imperatives and social cohesion. In such a balance there are still haves and have nots, but welfare programmes blunt the edge of poverty sufficiently for rich and poor to coexist within the same social system. Late twentieth century neoliberalism tilted this balance towards commerce, progressively increasing the gap between rich and poor and making a shrinking middle class fearful.

These dynamics began in Britain with Thatcherism and in New Zealand with Rogernomics, and policy in the two countries has continued roughly in parallel. At the moment New Zealand is one unhappy step behind the United Kingdom; a good opportunity to pause and consider whether taking that next step will really put our best foot forward.

Rioting in London

Let’s consider the small picture of the recent riots in London.

• With the country heavily weighed down by debt, the government identified spending cuts as an essential part of the return to fiscal health*. The poorer you are, the more painful the impact of reductions in public spending. The cuts in services and entitlements reduced those at the very bottom of the economic ladder to a state of hopelessness.
• Festering discontent among the most disadvantaged fueled fears in the rest of the population. Social policy is recognised as a causal factor only to the degree households are impacted by the spending cuts; many ascribe blame to the discontented themselves and, because they make up a significant percentage of the poor, to people of colour.
• Increased antagonism between the hopeless poor and the unhappy middle class makes natural targets of retailers and small businesses. Harassment, looting, vandalism and the consequent confrontations with police are the result.
• Those who can afford to do so move away from riot affected areas, taking wealth with them and leaving businesses less viable. The ultimate result is an even clearer geographical demarcation between the well-protected rich and the ghettos of the poor, with a much-reduced middle class trying to stay afloat between the two.

And the larger picture? The speed and severity of public spending cuts in Britain has been driven by debt incurred in bailing out financial institutions after the crisis in 2008. Given the complicity of regulatory agencies in creating the environment that enabled the crisis, the soft line generally taken with the perpetrators is unsurprising, if unpalatable. The decision to offset this expenditure through cuts to social services is effectively taking from the poor to give to the rich.

Lessons for Aotearoa

How does any of this apply to New Zealand?

New Zealand came through the financial crisis of 2008 rather better than the northern hemisphere. The economy stagnated, the housing market softened and many people lost investments, but there was limited government intervention as a result of the crisis. Debt as a percentage of GDP has fallen by nearly ten percent since then. Nonetheless the ruling National coalition has announced that, if re-elected in November, it will make significant adjustments to the country’s welfare system.

There are already deep divides in New Zealand culture. With the privilege of employment and mortgages, some decry all beneficiaries as dole bludgers who could easily find work were they only interested in doing so. On the other side of the divide are the underemployed who see few opportunities to better themselves and are prepared to believe that immigration and capitalist exploitation are responsible for their lack of prospects. This is already an unhealthy environment, and one which will only be made worse by cuts to benefits or public services.

We’ve had riots in New Zealand in the past. They’ve happened in times of economic hardship, inflamed by a sense of grievance with government policies of the day – a similar context to that which could exist again in early 2012. Thankfully we have the salutary lesson afforded by the recent United Kingdom riots to help us avoid similar unrest in the antipodes. It remains to be seen whether the next New Zealand government will understand the relevance of that lesson and appreciate how fertile the ground already is in our larger cities for the same response to ill-considered social policy.