The Ministry of Social Development has just released a major report detailing inequality and hardship in New Zealand, and it shows that things have got worse. Some key points are:
- Inequality has worsened between 1982 and 2004
- There has been a significant improvement in the incomes of the top of half of society
- The percentage of children living in poverty has doubled from 12% to 23%
- The value of benefits in relation to average income continues to decline
- NZ has the fastest growing inequality in the OECD
[Read more below]
The MSD's descriptive - rather than explanatory - report uses information from the Statistics NZ Household Economic Survey to examine incomes over the period 1982 to 2004. This is the first time that the data has been used like this, and the report is the first in a new series that conforms to international best practice and comparability. Therefore NZ's inequality can be directly compared to other OECD nations. Pages 45 and 46 provide charts that show that 1) the level of inequality has increased faster in NZ than the 19 other comparable OECD nations, and 2) NZ isn't quite the most unequal nation yet, but those that we are emulating (ie heading towards) are countries such as Mexico, which is the worst, followed by Turkey, Poland, US, Portugal etc.
The most interesting part of the report appears to be Section D on 'Household incomes and income inequality, 1982-2004'. In this, Figure D.3 shows how the higher 60% of income earners have had rising incomes compared to lower income earners who have little or no increase over the period. Figure D.4 more clearly shows this equality by looking at a limited number of income deciles and comparing their 1984-indexed income levels. D8 and D9 are interesting, because they show the density and ratio distribution of household income over the period. D.10 illustrates the rise in inequality via the Gini coefficient. Figure B.3 is also a useful one, because it charts the income deciles for 2004.
There has been very little media reportage of this important report. Radio NZ National gave the basic details, and both the Maori Party and the Child Poverty Action Group put out a media release highlighting the increased inequality. CPAG says the ongoing child poverty is a consequence of Labour's 'less generous, and more conditional, government support for families'. The Maori Party says that the report means that Labour should stop 'singing its own praises about their Working for Families package' and lowered unemployment.
The next in the MSD series is out in mid-2008 and should contain data up until 2007.