Youth political participation — a call to action

I just don’t understand young voters, and having been one for all my voting life, that’s a bit sad. The thing is, by and large young people don’t pay attention to politics, and it’s a big problem. What follows is a call to action to make participation a priority.

Young people not voting has serious consequences for our society. Two of the big challenges we face are the cost of housing and the rising cost of superannuation. Yet, our politicians aren’t offering solutions to these problems. Or when they have, aren’t successful at the polls. Why is that? For the answer, look to the voters.

The problem

Recently I came across some remarkable statistics. Electoral Commission figures break down estimates of voter enrolment by age group. The results, while not particularly shocking, make for sobering reading.

At the 2013 census, voters between the ages of 18 and 29 made up roughly 21% of the eligible voting population. In February 2016 77% of this age group enrolled to vote. For the remainder of the electorate aged 30 and over, the enrolment rate was a whopping 96%. Our youngest electors aren’t paying attention to politics. But the difference in enrolment rates only tells half the story. Watch what happens when you look at voter turnout statistics.

Data from the 2014 election show that 63% of enrolled voters aged 18 to 29 cast a ballot. Average voter turnout for all other ages was 79%. Far fewer 18 to 29 year old citizens enrolled, and of that group, fewer still voted on election day. The voice thousands of our youngest electors isn’t heard at the ballot box. This has a real impact on politicians and their policies.

The political parties

“Campaigns generally tend to ignore citizens who are not registered to vote, or who have voted infrequently… because those people in essence waste the scarce resources of a campaign… it’s hard to register people who have been disengaged from the political process, it’s hard to get people who have only a sporadic interest in politics to care.” — Daniel Kreiss

In a January 2016 podcast, Daniel Kreiss described the behaviour of American political campaigns. Political parties tend to reinforce the status-quo when it comes to voter participation. They focus resources on those most likely to turn out to the polls.

If 18 to 29 year old New Zealanders are less likely to enrol and vote, politicians are likely to ignore them. Political parties target their policies at those most likely to influence the election result. So what effect is this having on superannuation and housing affordability in New Zealand?

Superannuation

“The discussion will not be easy, as there are some major questions of intergenerational fairness to be resolved. But New Zealand Superannuation cannot be treated as a holy cow. If we choose not to touch it, we are choosing to touch healthcare, education and other areas of government spending that are possibly more important for our long term wellbeing and prosperity. There is no free lunch.” — Jean-Pierre de Raad

A 2012 article published by the New Zealand Institute of Economic Research predicted superannuation costs would more than double from $9 to $20 billion a year by 2031 (in 2012 dollars). They estimated Government spending in healthcare would grow by $12 billion at the same time. If we do nothing, the money will have to come from somewhere.

What if the economy grows enough to pay the increase in cost you may well ask? In 2013, the University of Auckland Business School published a briefing paper on superannuation. It cited Treasury figures showing that by 2030 superannuation spending was projected to rise from 4.3% to 6.7% of Gross Domestic Product. The conclusion? That increasing the nation’s productivity and economic output is key to keeping superannuation affordable. That is certainly part of the solution, but is unlikely to be a silver bullet. It would be prudent to consider other measures.

Any change to superannuation policy requires enough lead time for citizens to plan under new rules. Arguably decades. This makes the need to find solutions urgent. And it becomes more difficult as the proportion of the population approaching retirement age increases.

A difficult choice exists between maintaining the status quo at great expense, or taking steps to lessen future costs. Proposed solutions have not been politically viable. Why? Consider the incentives. The statistics show that the older you are, the more likely you are to influence the election at the ballot box. On this issue, the closer you are to 65, the more likely it is that you will see policy change on this issue as a threat to your interests. And the higher the probability that you will vote.

The voters with the greatest interest in superannuation that is affordable are those aged 18 to 29. They will pay for expensive superannuation for an ageing population all their working lives. Where are these voices in the debate over entitlements? According to voter turnout statistics, a large proportion of this demographic aren’t paying attention. Engaging 18 to 29 year old voters in higher numbers might not change the policy outcome. But it would promote more debate resulting in better solutions.

Housing

“I’m one of a politically powerful block of Aucklanders coasting along on the wealth effect of rapidly rising property prices. Low inflation and low interest rates are maintaining my household cash flow while on paper I’m getting richer every week.” — Liam Dann

In an NZ Herald opinion piece, Liam Dann nailed it when describing the situation he and many other Aucklanders find themselves in. New Zealand society is obsessed with the value of real estate. It is our primary source of investment and retirement savings. And the political climate on this issue is one of stalemate. Many accept that rapidly inflating property values present a risk to the New Zealand economy. But to address this problem in a meaningful way would be to invite the scorn of middle-class New Zealand.

At the 2014 election the Labour party proposed policies aimed at addressing the risk of rampant house price inflation. A capital gains tax and ‘KiwiBuild’ to name two. They lost spectacularly.

The current government has chosen to focus on increased private housing supply to address the problem. By removing red tape, and partnering with local authorities they hope to speed up development in our largest city. The Reserve Bank has responsibility for protecting the stability of New Zealand’s financial system. It has enacted loan to value ratios and other measures to restrict bank lending. While tempering price increases at times, these efforts have not had a sustained effect.

What’s going on here? Again, we turn to the voters. According to Statistics New Zealand there are 1.5 million people living in Auckland today. The median age of the Auckland population is 35. Unsurprisingly, the average home ownership rate among those aged 18 to 29 in New Zealand is 11%. For those aged 30 and older the home ownership rate is 68%. The politicians are responding to the obvious concern that homeowners have with increasing property values. The owners of property vote. The young, by and large, do not.

There is little disagreement that house price inflation at current rates may damage the New Zealand economy. But the inertia of the status quo is undeniable. In fact there is a sizeable chunk of the (voting) population who are quite happy to wait for something meaningful to be done. In the meantime, they grow wealthier by the month. Who has the incentive to push for resolution? The youth. Without their voice in the debate and their influence at the polls, the solutions will come too late, or not at all.

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