Letter From Elsewhere: A Proper Envy

A Proper Envy

On 2 August the Dominion ran a front page item about top executive salaries. I had to read it twice before I could take in what it was saying. ANZ Bank research shows that executive pay has little or nothing to do with performance. The companies with the biggest assets pay the most. Yet over the last ten years, the people who earn all that dosh running our 40 biggest listed companies have managed to wipe $15 billion off shareholder wealth.

The logical conclusion? Apart from sacking the lot and handing the company over to the workers to run (at least they might have a better idea of what’s happening down among the consumers), you would think the answer was obvious: cut those generous salaries down to a more realistic level, and make any top-ups dependent on results. Three strikes and you’re out, perhaps?

But no. Dr Murray Horn, head of ANZ (NZ), says the problem is that boards are paying too little. It seems that to compete against other countries for managers who are “confident they could create shareholder wealth”, you have to pay per year roughly what we sold Telecom for. Why aren’t companies willing to do that? Because of “envy-based prejudices”.

Ah, the politics of envy. The Right love to flash this phrase about. They mean that the poor and near-poor have no right to envy today’s rich, because the rich got that way through exceptional skill backed up with unceasing toil. Whereas the poor got that way because they were, and are, either stupid or lazy or both. If they are entitled to a living at all (and over the last ten years, many of those extremely well paid executives who lost all that money have repeatedly told us that they are not), then it must clearly be as meagre a living as possible.

But some on the Left attack the politics of envy too. They much prefer the dour, proud poverty of the Old Days, the cardboard-box-in’t-middle-of-road days, to the Chinese-sweatshirted McPoverty of the new millenium.

A few days before Dr Horn decried the sin of envy, a very different piece of research made headlines. Down at the other end of town, Still Missing Out (by Graham Howell, David Simmers and Kevin Hackwell - fax 04-384-7688 or write to PO Box 6133, Wellington for a copy) revealed that the Department formerly known as WINZ was not paying the special benefits for which nearly two out of every three beneficiary households receiving the accommodation supplement qualified.

People who don’t get enough money from their benefit plus the accommodation supplement to meet their essential expenses are entitled to be paid an additional special benefit. Currently, fewer than 12,000 of these benefits are being paid. As the report points out, it is usually high accommodation costs which bump people over the threshold for the special benefit. And the Department necessarily knows exactly what these costs are for every household receiving the accommodation supplement. Yet around 175,000 households are not getting that bit extra which would stop them having to choose between the doctor and lunch.

I know one of them well. She is on the sickness benefit, which is the same as the unemployment benefit - $149 a week. But her rent is $162 a week. With the accommodation supplement, her total income is $239 a week. That leaves her $77 a week for everything else, including medical costs. But she is too ill to go through the gruelling process of trying to prove her right to a special benefit. And no one at the Department is responsible for doing the sums to show that she should have one.

Looking up an essay in the Report of the Royal Commission on Social Policy, I came across a table of benefit rates. In 1987, the single adult unemployment benefit was $123 a week. Thirteen years later, it is just $26 more. And back then, people were not trapped by the vicious rules which take away a dollar of the accommodation supplement for every extra dollar earnt.

The fact that the benefit system has been redesigned to make as many people as possible beg the Department for enough top-up money to cover essentials is bad enough. But that so many are not getting even what the Department’s own rules entitle them to beggars belief, as it has already beggared their lives. In such a case, any envy of those who not only claim so much for themselves, on so little evidence of merit, but who also assiduously insist that the poor should lose even more of the little they have , is entirely proper.

ENDS

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