Local Bodies: Government Responsible for Invercargill Poverty

Written By: - Date published: 9:00 am, December 2nd, 2014 - 6 comments
Categories: child welfare, Economy, families, health, housing, john key, same old national, wages - Tags:

The second annual Child Poverty Monitor was released today.  Articles on the report by RNZ; Stuff; NZ Herald; 3 News; TVNZ. Below is a re-posting from the Local Bodies blog of bsprout’s post on poverty and inequalities in Invercargill.


Government Responsible for Invercargill Poverty

Invercargill provides a good snapshot of New Zealand society. We are a city of around 51,000 people and have a breadth of industries to support our local economy. Within our wider province we have an aluminium smelter, New Zealand’s largest dairy factory, a number of exporting manufacturers and the region earns about 12% of our national export income with only 3% of the population. We also have a highly successful tertiary institution in the Southern Institute of Technology (SIT) that pulls in overseas students and provides a wide range of courses to lift the qualifications and skills of our local workforce. Venture Southland is proactive in promoting the region and leading research and development to grow a more sustainable local economy.

We are also ethnically diverse with growing Maori and Pasifica populations and many immigrant workers. We have an unemployment rate that is similar to the national average of just above 5%.

I recently wrote a post about inequality and income distribution in Invercargill based on the previous decile ratings of our school communities. Those ratings were based on the 2006 census and I thought I would do a reassessment based on the new ratings that have been revised using the 2013 census.

One would expect that the income distribution in an highly productive community, with such low unemployment, would fit the familiar bell curve. Most households should be earning good incomes, a very small group struggling financially and a similarly small group that are very affluent. This isn’t the case.

Out of 28 school communities 11 have a 1-3 decile rating and despite strong economic growth in the region over the past three years we have a decile 1 school for the first time since 2006. Our very poorest have got poorer. 8 schools have a decile 4-7 rating but 3 of these are decile 4 and only 1 is decile 7. We now have 7 schools that are rated in the affluent decile 8-10 group (down one from 2006).

The median income from all sources for those of working age in Invercargill is only $27,400. Only 23.5% of us earn more than $50,000 and almost 37% earn less than $20,000. A living wage is currently estimated at 18.80 an hour to give an income that would allow workers to “live in dignity and to participate as active citizens in society”. This comes out at $39,000 annually for 40 hour weeks over a full year. Given our statistics probably around 60% of Invercargill people eligible to work do not earn a living wage.

I believe that Invercargill people and the Southland region are doing more than our share to support the national economy and to try and stand on our own feet. It is central Government that has failed us. Our hospital is underfunded and in crisis, we have had no social housing built since the 90s, our road funding has been cut, local state sector staff have been cut (DoC and the IRD) and the cost of electricity has caused energy deprivation for many. We no longer have any emergency housing for those in desperate need and there are plans to sell off most of our existing state housing (the money generated is unlikely to be injected back into our community).

As with the rest of New Zealand there are more early childhood centres and aged care facilities being built and the service industry is growing. Despite creating more employment the developers of many of these new businesses are subsidised by our taxes but most only pay the minimum wage to their workers to maximise returns.

John Key claimed on election night that he was going to work for all New Zealanders, he hasn’t up till now and he has given no indication of when that work will begin. Meanwhile inequality grows and the future for most Invercargill people (especially children) under this Government is looking bleak.

6 comments on “Local Bodies: Government Responsible for Invercargill Poverty”

  1. swordfish 1

    That sharp economic divide in Invercargill dovetails with the geography of the Party-Vote in the city.

    Over the last few years, I’ve been slowly but surely calculating the changing party-vote proportions in all suburbs of New Zealand cities (ranging in size from Gisborne up to Auckland). In terms of the provincial Cities, Invercargill absolutely stands out for its sharp geographical divide in party support.

    At one end of the spectrum, you have the city of Hastings where – apart from a couple of exceptions like the low-income Labour stronghold of Flaxmere – all suburbs record very similar support levels for the major parties and wider party blocs (in other words, if you were to produce a map of party support in Hastings, almost all suburbs would be light blue).

    At the other end, Invercargill is fundamentally split between North and South. In 2011, for instance, (the latest Election I’ve looked at), every single suburb in the northern half of Invercargill was as Blue as a new Tatoo, while I think (from memory) all except one of the southern suburbs was as Red.as a Railway Shed. (with the small number of booths in the city centre suitably being pretty much split down the middle between the Left and Right Blocs).

    Very much a City of Two Halves.

  2. Michael 2

    Southland produces a lot of New Zealand’s wealth but it is neither distributed nor invested here. Instead, most of that wealth flows quickly away from the province, either overseas or to Auckland (same difference really), leaving the people who toiled to produce it in poverty, along with their families. While central government are the primary villains here, local government and the “business community” share culpability, as the latter control many of the means of production, and the former make crucial resource allocation decisions. Finally, we are all responsible for the amount of poverty in our community because we either condone injustice or profit from it.

    • karol 2.1

      Yes, it sounds like part of the flow out of NZ, funneled through Auckland.

      With a government that only pays very superficial lip service to doing anything about poverty, it’s a hard struggle to keep agitating for a more just distribution of wealth and income.

  3. Ad 3

    Better funding of the public sector in social housing, hospitals, public sector staff, and roading, would only make a small positive difference to that great economic divide.

    Invercargill is the largest example of the quarry-enclave economy anywhere in New Zealand:
    – the great majority of those who work quarry natural resources with low value add (bulk bauxite for aluminum and bulk water for milk into bulk export goods)
    – only a tiny enclave of those who work are really prosperous

    This is the standard pattern New Zealand has been following for about 200 years.

    Impressive however that those initiatives that support innovation and productivity (Venture Southland, Southland Poly) are fully held up by publicly pooled funds in the form of Licensing Trust funds and Council rates. But:

    – Can Council step in more into social housing?

    – Can Venture Southland pressure the farming community to move towards artisanal higher margin exporting rather than further risking the vicious swings of dairy’s commodity cycles?

    – Which farms can or will amalgamate into local exporting companies?

    – Is Invercargill Airport doing enough to entice tourists into the deep south?

    – Can Bluff extend its great Oyster festival into something more? Compare Bluff to Te Anau, especially as the springboard to Stewart Island.

    I don’t envy Invercargill’s task.

  4. dave 4

    just wait to the smelter closes its on borrowed time

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