Aotearoa At A Crossroads (Again)
Stories of Neoliberalism, Inequality and the Hope of Change
Part One - A New Economic Vision – The 1980s Reforms
In 1984, Aotearoa New Zealand embraced a radical economic experiment. Under the Fourth Labour Government, sweeping neoliberal reforms known as "Rogernomics" were implemented tariffs removed, subsidies slashed, the NZ dollar floated and hundreds of state-owned enterprises sold or corporatised.
The reforms were designed to fight inflation, trim government spending and unleash private sector dynamism. The language was technocratic efficiency, competition, individual responsibility. But behind those words lay a profound social upheaval.
Unemployment skyrocketed. Entire sectors vanished. Community assets were privatised. Union power was gutted. Public services became user-pays. Māori, Pasifika, working-class Pākehā and new migrants bore the brunt.
Part Two - Lives Lived in the Wake of Reform
Ray – the Factory Worker (Ōtara) Ray, 46, had worked at the freezing works since he was 19. After subsidies were removed and the plant closed, he found himself redundant, adrift. He lined up at Work and Income alongside hundreds of others, treated like a number. He felt humiliated. He began drinking heavily. His eldest son, Hemi, joined a gang. His youngest dropped out of school. Violence crept into their home.
Ray never worked full-time again.
Belinda – the Entrepreneur (Remuera) Belinda launched her accounting firm in 1986, right when financial markets were deregulated. Bank loans were easy, taxes low, assets ripe for acquisition. She built wealth through property and contracting. For her, the reforms were rocket fuel. She often said, "Anyone can make it if they work hard enough."
She never saw the food queues in South Auckland.
Aroha – the Māori Teen (Rotorua) Aroha was 15 when her school cancelled its trade training programmes. Her dad had lost work in forestry. She worked nights at a fast-food chain, slept through class and left school in Year 11. At 18, she gave birth to Moana. She suffered from undiagnosed postnatal depression but could barely afford a GP. The flat she lived in was damp and mouldy. Moana wheezed through every winter.
The state judged her but never helped.
Amrit – the Nurse (Wellington) Amrit arrived from Fiji in 1989. Her qualifications were questioned and she was slotted into a part-time role in a hospital that had just been "restructured". Patients were turned away for inability to pay. Her colleagues were burnt out. Her dream of helping people faded. She left nursing in 1993.
Max – the Child (Dunedin) Max grew up in a family teetering between working and middle class. His father lost his manufacturing job. Rents rose. School donations became a burden. There were days with no hot water and weeks with no fruit in the fridge. Max developed anxiety early. At 12, he stopped going to the dentist. It was a luxury they couldn't afford.
Did They Ever Have a Choice?
Ray could have retrained, yes - but there were no funded programmes left. The union that might have helped him negotiate redundancy was gone. When the freezing works closed, his choices narrowed to welfare or under-the-table labour. The drink offered more certainty than the state.
Aroha might have stayed in school if the teachers hadn’t given up on her. She might’ve seen a future beyond retail if career pathways existed. But when you’re tired, broke, and invisible, the idea of “choice” becomes theoretical. She chose survival.
Hemi joined a gang not out of rebellion but because it was the one structure that offered brotherhood, pride, and predictability. There was no youth centre. No mentorship. No safe third space.
Amrit had qualifications and a deep commitment to care, but was sidelined by a health system designed to run on less. Her choice was to burn out or bow out. She left with a broken heart.
Max never got to choose. Children don’t. But the stress, the poor housing, the anxiety—that shaped his brain before he even understood what society was.
So yes, there were “choices”, but not real ones. Not when every option is constrained by neglect.
The cruelty of neoliberalism was in telling people they were free, then abandoning them when they couldn't fly.
Part Three The Statistics Behind the Stories
Gini Coefficient Rose from 0.27 in the early 1980s to over 0.34 by 2004 and has remained one of the highest in the OECD since.
Child Poverty As of 2023, 1 in 6 children live in households experiencing material hardship. Treasury estimates child poverty costs the nation $17.7 billion a year.
Unemployment (1980s peak) Reached over 11% in the early 1990s. Māori unemployment peaked at nearly 26%.
Housing Over 41,000 people now experience severe housing deprivation (Stats NZ).
Gang Membership Increased from under 2,000 in the 1980s to over 8,000 patched members today (NZ Police, 2023).
Mental Health Youth suicide rates remain among the highest in the developed world.
Part Four Fractured Cohesion
Social cohesion has weakened.
Neighbourhoods became transactional. Class divisions hardened. Ethnic inequality deepened. Public services turned into private products. The unemployed were vilified, not supported. People like Ray were cast as failures in a system designed to abandon them.
A 2022 Victoria University survey reported sharp declines in intergroup trust, particularly between income and ethnic groups. In schools, hospitals and courts, Māori face poorer outcomes at every turn. The ideology of "individual responsibility" atomised communities that once relied on one another.
Part Five - Māori Renaissance Amid Systemic Neglect
While Māori bore the brunt of the reforms, they also resisted. From the 1980s onwards, the rise of kōhanga reo, kura kaupapa and a resurgence of tikanga Māori marked the beginnings of a cultural renaissance. Te reo Māori re-entered public life. Tā moko, rongoā and whare wānanga reclaimed spaces long denied.
But the renaissance occurred despite the system, not because of it.
Part Six - Aotearoa Reimagined – If We Chose Another Path
What if we had followed Finland?
Ray would have had access to job retraining and income top-ups through Active Labour Market Policies (Denmark model). Instead of the bottle, he found purpose again. He never hit his son. His sons became apprentices, not prospects for prison.
What if we followed Brazil?
Aroha would have received conditional cash transfers that required her daughter to attend early education and check-ups. Moana would breathe in a dry, warm house. She'd stay in school. She wouldn't feel ashamed.
What if we had Housing First?
Max's family wouldn’t have bounced from house to house. He’d be warm, fed and safe. His dentist visits wouldn’t depend on luck. He might study law, not Google "panic attack symptoms" at 16.
What if Amrit had a well-funded health system?
She’d stay in the job she loved. Her patients wouldn’t ration insulin. She’d go home proud, not broken. Her kids would grow up thinking Aotearoa values care.
What if Belinda still succeeded, but so did everyone else?
She'd still have her firm. But she'd also know her cleaner's child made it to uni. That her tax funded breakfast at a decile one school. That the economy grew not in spite of equality but because of it.
Part Seven - The Economic Case for Compassion
Finland's Housing First saves up to NZD $25,000 per person annually in emergency and health costs.
Brazil's Bolsa Família lifted 25 million people out of poverty for just 0.5% of GDP.
Denmark maintains one of the world’s lowest youth unemployment rates through early intervention and skills training.
New Zealand spends more dealing with symptoms (justice, healthcare, corrections) than we would preventing them.
Conclusion The Neoliberal Experiment Has Failed
It was meant to make us efficient. It made us unequal. It was meant to make us self-reliant. It made us fractured. It promised prosperity. It delivered prosperity for a few.
We can no longer afford to moralise poverty while subsidising wealth. We cannot punish deprivation while calling it "freedom".
We must choose a new model. One rooted in manaakitanga, kotahitanga and fairness.
The next generation deserves an Aotearoa built for everyone. Society needs it. The economy needs it. What’s stopping it?
Postscript - Why Successive Governments Have Refused to Change Course
The question looms: if the evidence of harm is so clear, why have successive New Zealand governments of all political stripes, largely upheld the neoliberal framework?
The answer lies in a potent mix of political inertia, economic orthodoxy, fear of backlash, and structural power.
Entrenched Ideology
Neoliberalism didn’t just restructure policy, it redefined what was politically “common sense.” Balanced budgets, low taxes, and market-led growth became bipartisan gospel. Politicians feared deviating lest they be branded reckless. Even parties elected on platforms of change quickly found themselves hemmed in by Treasury advice, business lobbyists, and global credit agencies.
Middle-Class Buy-In
Enough New Zealanders, particularly home-owning, asset-rich urbanites, benefited from rising house prices, deregulated financial markets and low taxation. Governments have long been wary of alienating this voting bloc, which fears redistribution more than it fears inequality.
Privatisation of Blame
Neoliberalism successfully shifted blame from system to individual. Poverty became a moral failing, not a structural outcome. Crime, addiction, truancy - these were framed as personal choices, not societal symptoms. This narrative allowed governments to justify punitive policies while ignoring root causes.
Lack of Courage and Vision
True reform requires bravery - to tax wealth, to confront monopolies, to rethink ownership of public assets. But short political cycles reward caution, not courage. Governments opt for tinkering over transformation, terrified of spooking the markets or the media.
Corporate Influence and Global Trends
Large-scale private interests have shaped policy behind the scenes, especially in housing, health, transport, and infrastructure. As part of a global neoliberal order, New Zealand has often mirrored policies set abroad rather than lead with its own.
In Summary
It is not that governments didn’t know. It’s that they were either unwilling, unable, or too compromised to act.
But the cost is now impossible to ignore. Fractured communities. A generation raised on food insecurity and damp rentals. Public trust eroded. Billions spent on symptoms, not solutions.
The real question is no longer whether neoliberalism failed - it is whether we, collectively, are ready to stop pretending otherwise.