On Newshub Nation Emma Jolliff interviews Professor Marilyn Waring:

Emma Jolliff: Leading economist and former National MP Professor Marilyn Waring first raised her concerns about inequality and economic measurement 30 years ago. Now, she’s detailed her criticisms of Treasury’s new framework to measure inter-generational wellbeing in her new book, Still Counting. Professor Waring was New Zealand’s youngest MP in the 70’s and the only female in Robert Muldoon’s late 70’s caucus. She famously threatened to cross the floor on the nuclear issue when National had just a one-seat majority, triggering the snap election that ended Muldoon’s reign as Prime Minister. Professor Waring joins me now in the studio. Thank you very much for joining us.

Marilyn Waring: Morena.

So, 30 years ago, you published Counting for Nothing about the undervaluing of unpaid work. What did you want to achieve with that book?

In particular, I wanted central government decision makers to understand that the single largest sector of the nation’s economy, in every country, was left out of GDP figures, and when you use those figures as the central framework for public policy making and for redistribution of your resources, it’s kind of mad.

How do you describe that sector exactly? The one that’s left out?

Ok, well, it’s the unpaid sector. So pretty much everybody in New Zealand contributes at some time. So, unpaid voluntary and community work, subsistence food production – you know, on the farm or the back garden, if you happen to have one. In particular, though, housework and growing care work. But in my ideas, of course, it also includes lactation and pregnancy, which don’t count anywhere at all.

Don’t factor.

Yes.

So it’s been suggested that we’ve never valued unpaid domestic work less than we do now, in fact, and success is still measured through professional achievements. Would you agree that’s still the case?

It’s measured through market transactions. So a really other important factor is that those market transactions are supposed to count all underground economic transactions. So that would be the illegal drugs market, internationally, of course, it’s trafficking people, illegal trafficking armaments. But a truly significant part of GDP is the underground economy, and it is counted.

But, yet, what’s not underground, and is a positive contributor, is not?

Yes and New Zealand started to go in this direction some time ago. In the very first coalition agreement Winston Peters signed, there was a commitment to conduct nationwide time-use surveys. We did that twice. They were the most sophisticated in the world when we did that. But nobody in the bureaucracy or parliament really knew how to use them.

And that’s why they didn’t continue to be used?

They didn’t continue to be used because National became the government, and it doesn’t suit National’s population support to figure in unpaid work, because that would mean redistributing budgetary resources, and they tend to like to feather the nests of those who support them.

Let’s come back to time-use surveys in a minute, but first up, the government says it’s putting wellbeing at the centre of this year’s budget. But in your new book, Still Counting, you’re critical of their approach still. What are your concerns?

Well, I want to distinguish between Treasury and the government, because Treasury came up with the framework, which is not good. First of all, it’s another kind of neo-colonial tool. They take what was developed in Europe, in Paris, and try to impose it on New Zealand. We actually are really different. You know, we don’t have rivers that flow through contiguous nation state boundaries. We have tangata whenua here. We have Treaty of Waitangi here. We have very different sustainable questions in terms of the environment. Why, in 2019, do we have to take some European model and suck it up here? It doesn’t make any sense.

Is Treasury the right place to manage wellbeing?

Treasury isn’t, and they are Johnny-come-latelys. For example, the Ministry for the Environment has been very sophisticated in its development of indicators for over 30 years, and they use those indicators and their authentic characteristics, so, for example, levels of pollution, hectares of standing forest, wildlife degeneration, to put market asset figures on this is ridiculous! It’s like, what do I bid for a giant weta?

That living standards framework does put a monetary value also on intangibles like loneliness or contact with the neighbour, you originally argued for a monetary value to be put on unpaid work and the environment. What changed?

Yeah, I did. I argued that because I’d come straight out of parliament and if you wanted to get visibility for the unpaid work sector or for the environment, the best way to argue was to take on the economy at its own terms so to attribute market values. The further I got away from the immediacy of needing visibility in parliament, the more I realised what a pathological approach that was. I would not want, for example, unpaid caring work to be in the same database as military weapons, which are, by the way, treated like orchards. It’s a terribly pathological system.

So Time-use surveys are your answer, is that right?

Time-use surveys are the key component. Whatever we develop now- Look, what we’ve established is that GDP is not reliable, especially for international comparators. Whatever’s coming in in its place, we’re going to be laden with that for the next 50 years. So we’ve got to have a base data characteristic that just will not change over the next 50 years, and time does that. And we’re going to have all kinds of catastrophes and challenges and they’re going to change people’s working lives. We may be moving towards things like universal basic income or more towards it. We’ve already got one of those — it’s called national superannuation, and 750,000 people are on it and time is what will demonstrate all of these shifts.

Talking about measurement — capital gains tax, do you think that the government should implement one to improve fairness in the tax system?

Yes, I do.

Why do you say that?

Because I think we want to see redistribution. I don’t like having fields of assets where profit is not taxed, when it is taxed in loads of other situations. I do think it’s time we just grew up and matured and got over this hurdle. Every single argument was heard in every single European country that introduced it. They’re tedious now, and I’m interested in a far more equitable revenue asset base. That should mean being able to make changes in company and personal tax as well.

And you think that will make a real difference?

I do think it will make a real difference, yes. In fact, I was part of a government in 1982 that introduced a capital gains tax.

We’re seeing some of the watering-down of the language, though, that the Prime Minister is saying that she’s listening to small businesses, she’s listening to farmers. Do you think it might end up that it’s just going to be on investment properties?

It may well, but in New Zealand it’s very, very difficult to introduce taxes if they’re not universal. We’re at a very small population base. You spend so much logistic and technical money trying to sort out who to tax and who not to tax, that in the end the return is quite small.

So on that issue of tax and many others — the Prime Minister has stressed that she needs to achieve consensus. Does MMP make it more difficult to make those big, transformational changes?

I think that it makes debate better. It’s always very difficult to say that because when you ask me a question like that I just go — Israel, Germany because who else do you compare it with? Those are the other MMP situations, and Germany definitely didn’t have too much trouble.

Do you think she’s going to be able to navigate that coalition path on the capital gains tax?

I hope that population feedback enables the coalition to proceed in that direction.

All right, that’s lovely. Professor Marilyn Waring, thank you very much for joining us.

Thank you, Emma.

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