Ambulances, prisons and Jeff bloody Bezos! Enough already with the bottom of the cliff.

When we talk about "bottom of the cliff" social policy we’re vividly illustrating the reactive approach that many central and local governments take towards social issues.

This strategy involves addressing problems only after they have manifested, instead of proactively preventing the cause and while this might seem efficient in the short term, it ultimately proves both socially and economically unsustainable.
It’s like feeling smug in not paying to service your car, then just not getting it when your engine seizes.

The Failings of Bottom-of-the-Cliff Social Policy

A prime example of this reactive social policy lies in healthcare.
Rather than investing in preventive frontline care and public health initiatives, many healthcare systems including that in our Aotearoa focus primarily on reactive medicine, expensive treatments, and emergency care.
This method not only leads to higher costs but also fails to effectively manage public health. Preventive measures such as vaccination, regular health screenings, and public health education can significantly reduce the burden of diseases and lower healthcare costs.

In social services, the pattern is similar. Governments often allocate substantial funds to benefits, emergency housing, and other assistance for those already in poverty.
And while these services are crucial for immediate relief, they do little to address the root causes of poverty, such as lack of equitable access to education, affordable housing, and stable job opportunities.
By investing in early childhood education, job training programs, and affordable housing, governments could help individuals achieve long-term self-sufficiency, reducing the need for ongoing assistance.

Our criminal justice system exemplifies this bottom-of-the-cliff thinking.
Aotearoa’s Department of Corrections currently spends $151,000 per year for each prisoner we lock up.
In March 2023 our prisons held roughly 7,700 inmates. That means that year we spent $1.16 Billion locking people up.
I hope you’ll agree that is just crazy when evidence worldwide suggests that focusing overly on punishment, rather than prevention, neglects the underlying causes of crime.
Were we to invest in appropriate educational and employment opportunities, along with mental health services, the cost would be balanced in the long run through reduced crime rates and the associated costs of incarceration.
In addition, rehabilitation-focused programs attached to education and employment have been shown to be more effective in reducing recidivism and promote public safety.

The Flaws of Short-Termist Capitalism

So, what’s the problem?
Our reactive, crisis-oriented approach is symptomatic of a broader issue: short-termism and neoliberalist capitalism.
Our current economic model has, since 1984 (in Aotearoa), prioritised lower taxation on high earners and small government over long-term stability and equity, often leading to significant reductions in spending on social costs.
Our focus has been an individualism blinded by privilege that argues anyone can succeed if only they work hard enough.
Unfortunately for the majority this simply not the reality and now in 2024 our wealth divide is larger than it has ever been.
The wealth of the top 10% increased many times during the pandemic while by contrast, the salaries of the lower and middle classes are dropping in real terms as housing and the cost-of-living and rocket.
As an example, Jeff Bezos, founder, and largest shareholder in Amazon with a mere 9% of the company’s shares, has a personal wealth estimated to be in excess of NZD$400 billion. All for one guy!
To put that into perspective, the UK spends approximately NZD$105 billion on its entire defence budget.
Little old Jeff could pay for the entire Canadian government’s healthcare system or, bringing it closer to home, Mr Bezos’s bank balance equates roughly with Aotearoa’s New Zealand entire governmental budget for 2024. And he doesn’t even pay any tax! Anywhere!

More worryingly, we increasingly see governments and corporates neglecting employee and societal well-being, community development and environmental sustainability. The latter greatly increasing climate change and impacting the future of our existence on this planet.

Absent intervention, this myopic focus on short-term individual gain will continue to lead to greater and greater workforce exploitation, environmental degradation, and social disintegration.
Sadly, it’s a truism that the less we deal with societies issues at their core now, the more those issues stack up for future generations.
We are future robbing Paul blind, to pay Peter the landlord/shareholder lovely big tax-breaks now.

Progressive Actions for Rectification

To move beyond the failings of bottom-of-the-cliff social policy and short-term neoliberalist capitalism, we must adopt a more progressive, long-term approach. This involves investing in preventive measures and addressing the root causes of social issues. Key actions include:

Investing in Education: Quality early childhood education for all has a high return on investment. Studies demonstrate that every dollar invested in early education yields returns of up to $12 in reduced costs for remedial education, criminal justice, and welfare support, as well as increased earnings and tax revenue.

Affordable Housing: Affordable housing can prevent homelessness and reduce the costs associated with emergency shelter, healthcare, police, and corrections. Supportive housing for chronically homeless individuals has been shown to save thousands of dollars per person annually in reduced emergency services.

Mental Health Services: Early intervention and access to mental health services can reduce societal costs associated with untreated mental illness, such as unemployment, homelessness, and criminal justice involvement.
The World Health Organisation estimates that every dollar invested in mental health treatment yields a return of $4 in improved health and productivity.

Sustainable Business Practices: Encouraging companies to adopt sustainable practices that prioritise long-term stability over short-term profits can lead to more resilient economies. This includes fair wages, environmental stewardship, and community engagement.

Sensible Taxation Policies: Implementing progressive taxation policies ensures that those who benefit the most from economic systems contribute their fair share to societal well-being. This can provide the necessary funding for public services and infrastructure.
For example, in Aotearoa. 

• The top rate of income tax in 2024 (those earning more than $180,000) is 39%.
• In 1970 it was 65%.

• The rate of Corporate Income Tax paid on profits in 2005 was 33%.
• Today it’s 28%.

This means that since the 1970s, billions of dollars in lost taxes have effectively been transferred from the successful operation of our social fabric to the pockets of our top earners.

Conclusion

Bottom-of-the-cliff social policy and short-term neoliberalist capitalism are not sustainable in the long run. They have led to higher costs, are exacerbating social issues, and undermine economic stability.
We must shift towards a more progressive social system designed on preventive and long-term thinking.
In doing so we can build a more equitable and resilient society. Investing in education, affordable housing, mental health services, and sustainable business practices.
These measures alongside implementing fairer system of taxation will ensure a better future for all.
It is not too late to prioritise people and societal betterment over the all-mighty dollar.
But watch out. Cos left much longer, there will be significantly more of us at the foot of that cliff.