Monitor Economics Q&A: Sue Moroney, CEO of Community Law Centers

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Every week Thing asks business and community leaders in New Zealand how they think the economy is doing and what they think are the biggest challenges.

Former Labor MP Sue Moroney has been the chief executive of Aotearoa Community Law Centers since 2018.

Moroney is concerned about the level of unequal distribution of resources in a wealthy country like Aotearoa in New Zealand.

“We live in a country with a temperate climate which is perfect for food production, but we have a huge growth in the need for food parcels. Something is wrong with this picture,” she said.

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How do you think the New Zealand economy is doing right now?

The economy is lumpy in Aotearoa/New Zealand. Although it compares well internationally because we did better than expected during the first waves of Covid-19, and some important sectors like primary production performed well, prosperity is uneven and clouds dark piles up.

We have little control over the formation of these clouds, and it is the most vulnerable who will suffer the most when the storm hits. These are the same people that community law centers serve, who struggle every day.

The economy is only as strong as the health and participation of the people it serves, says Sue Moroney, executive director of Community Law Centers.

CHRISTEL YARDLEY/STUFF

The economy is only as strong as the health and participation of the people it serves, says Sue Moroney, executive director of Community Law Centers.

What are you most concerned about right now?

Inequality of income and resources. We live in a country with a temperate climate which is perfect for food production, but we have a huge growth in the need for food parcels. Something is wrong with this picture.

It is a symptom of the unequal distribution of resources in a rich country. This inequality has been going on for decades, but it concerns me right now because it has affected our response to the pandemic and will affect our ability to weather the growing storm of high inflation, unaffordable housing, mental health issues, international events like the Russian invasion and increase in severe weather caused by pollution.

What has the past year taught us about the New Zealand economy?

She taught us that the strength of the economy depends on the health and participation of the people it serves. Our government’s focus on people’s well-being has also proven to be the best way to support the economy, which has continued to grow throughout the pandemic. It was difficult, but it was better than the “economy first” approach taken by many other countries.

I’m always worried when I hear the term “economy” referred to as something higher than and separate from people’s needs. It was built by us to meet our needs, not the other way around.

It was great to see the majority of companies understand this. When the rowdy minority lobbied to reduce restrictions such as border closures, things took a pear shape. Opening the trans-Tasman travel bubble too early shut down our biggest city and economy for months.

Residents of Auckland and Waikato have suffered greatly, but Queenstown has also suffered the economic consequences of losing its largest domestic market and losing access to Australian tourists.

Our economy does better when we play the long-term game, rather than respond to short-term thinking. Regions with diversified economies fared better.

Are you optimistic or pessimistic about the economy this year? Why?

We have a difficult year ahead of us. Inflation has taken off, largely due to factors beyond our control, such as war and supply chain issues. The exception is housing and rent inflation, which could be controlled by more public housing, better regulation and a capital gains tax.

The impact of high inflation will be significant here, especially for those already living in poverty, including those on low wages.

The most effective solution to runaway inflation will be to raise interest rates, but this measure also does damage. This will affect anyone who has borrowed heavily in recent years to buy a home or invest in their business.

So there are no acceptable options. Either everyone is suffering from high inflation hitting low to middle income people the hardest, or interest rates are rising hitting middle income people the hardest while high income people benefit from the investment returns. Meanwhile, the oil companies will continue to make obscene profits amid huge price hikes. Pro-rich tax cuts would aggravate this situation. Part of the solution must be to improve low wages and benefits.

What is the biggest challenge facing New Zealand?

Fight against inequalities. Covid-19 has shown us that we all suffer when people have been disenfranchised from society.

The inability to reach significant parts of our population with a public health response to the pandemic has endangered our collective health and kept us confined longer than necessary. The “team of 5 million” response has been successful, but it can only work where there is strong social cohesion. Inequalities undermine social cohesion.

We should all be ashamed that Maori count so heavily in all of our worst statistics. As tangata whenua, Maori should share equally in the wealth of resources available in Aotearoa New Zealand, but the reverse is true.

The Monitor is Stuff’s unique set of information to help the business community better understand the economic landscape and maximize their success. Next to the quarterly snapshot is a economic index showing the speed of growth in different parts of the economy.


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