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Gap between rich and poor highest ever, report shows

Published: 8:48PM Thursday August 23, 2012 Source: ONE News

  •  (Source: ONE News)
    Source: ONE News

The gap between rich and poor in New Zealand is at its highest level ever, according to a new report from the Ministry of Social Development.

The Household Incomes in New Zealand report shows the gap widened substantially in 2011, as average incomes fell for the first time since the 1990s.

The report, which measured the wellbeing of Kiwis by their total after-tax income, showed the pay packets of low and middle class earners either decreased sharply or remained the same last year, while the incomes of the richest went up.

The report, prepared by Bryan Perry, shows median household incomes fell 3% in real terms between June 2010 and July 2011.

This was in contrast to how incomes steadily rose from the mid 1990s, averaging 3% per year, the report said.

The report also showed that 21% of New Zealand children were living in poverty, up from 15% in 2007.

Green Party co-leader Russel Norman criticised the Government over the report.

"This report proves what the average 'mum and dad' and their family has felt for a while, they are financially worse off under this (National) Government.

"Middle New Zealand is being ground down by Government policy, with their incomes falling by 3%, while tax cuts for the well-off have seen those at the top do better."

Norman said Prime Minister John Key claimed the gap between the rich and poor was narrowing, but this report proves him wrong.

"John Key paraded the previous version of this report in Parliament saying it was is the most comprehensive study on inequality. He now needs to heed its findings.

"New policies like extending the child payment to families on a benefit, raising the minimum wage to a living wage and taxing capital gains would help families and make us a more equal society," Norman said.

Service and Food Workers Union National Secretary John Ryall said today that "inequality and poverty are growing at a truly alarming rate".

"Members of our union, many of whom are employed in the very lowest paid jobs in New Zealand, increasingly tell us they can no longer afford the basic necessities and struggle to provide school uniforms for their children or afford decent food," said Ryall.

Paula Bennett said the real problem was the international economic downturn, Fairfax reported.

The Household Incomes Report provides information on trends in the material wellbeing of New Zealanders as indicated by their after-tax household incomes from all sources, 1982 to 2011.

It is based in the main on data from Statistics New Zealand's Household Economic Survey.