Widening income gap due to Government benefit policy

Part of the reason that the gap between rich and poor keeps growing wider is that welfare benefits have been kept low or cut by successive National and Labour governments. Benefits payment levels were effectively frozen by the Fourth Labour Government, the Bolger National Government then cut benefits significantly - which Labour refuses to restore - but most significantly, all governments since the 1970s have insisted on tying benefit levels to inflation rates rather than to increases in wages. Research at the University of Auckland by Gerry Cotterell shows that the dole for a single adult 'has dropped from a recent peak of 45 per cent of the net average wage in 1986 to 28 per cent today'. The Herald reports that 'Welfare beneficiaries without children are now worse off in relation to the average worker than at any time in the past 26 years, and probably in the last 60 years'.