The top tenth of Kiwis hold well over half of New Zealand's wealth

A new survey shows the top 10 per cent of households own about half of all of New Zealand's wealth.
MAARTEN HOLL/FAIRFAX NZ

A new survey shows the top 10 per cent of households own about half of all of New Zealand's wealth.

The Government is dismissing claims the rich are taking an increasing share of New Zealand's wealth, saying there is "nothing out of the ordinary" with the existing gap.

On Tuesday Statistics NZ figures showed the wealthiest 10 per cent of Kiwis now hold close to 60 per cent of the wealth, with their share of the pie increasing.

In the year to June 30, 2015, the top 10 per cent of individuals held about 59 per cent of the wealth in New Zealand, compared to about 54 per cent in 2009/10.

Inequality writer Max Rashbrooke said people at the top end of the scale rebounded from the GFC quicker than others.
SUPPLIED

Inequality writer Max Rashbrooke said people at the top end of the scale rebounded from the GFC quicker than others.

The top 5 per cent of individuals held around 45 per cent of the wealth, while the top 1 per cent held about 22 per cent.

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For both groups the share of the nation's wealth has risen significantly since 2010.

But Finance Minister Bill English dismissed the significance of the figures.

"Wealth distribution among households in New Zealand is around average for OECD countries – about the same as Canada, but considerably more equal than the Netherlands and the United States so it's nothing out of the ordinary."

The figures show that in New Zealand, the wealthiest 1 per cent of households (rather than individuals) have 18 per cent of the wealth.

In Australia, the figure is 13 per cent.

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English said in a statement that "there is no evidence in the latest Statistics NZ release of any increase in wealth inequality over time".

The survey showed that while the share of wealth held by the top 1 per cent, 5 per cent and 10 per cent of New Zealand households dipped slightly between 2005 and 2010, by mid-2015 it had reached the highest level in at least a decade.

Earlier figures were not provided by Statistics New Zealand.

"The National-led Government is continuing to invest in significant programmes to support vulnerable New Zealanders," English said.

During the global financial crisis (GFC), the share of wealth held by the most affluent individuals fell, as financial products dropped in value as financial markets dropped.

Inequality writer Max Rashbrooke said after a period where the fortunes of the wealthy had been relatively flat, financial wealth and high end housing was now boosting incomes of a small proportion of households faster than others.

"The post-GFC fortunes of people at the upper end have rebounded more quickly than those of everyone else," Rashbrooke said.

"Between the mid-2000s and 2010 the wealth of the top 10 per cent didn't go down, but it didn't grow as quickly as everyone else."

The 2010 survey showed that many classes of asset, such as direct ownership of equities or business ownership, was almost exclusively held by the wealthiest 10 per cent, Rashbrooke said.

"What we already know from the 2010 data us that while housing to some extent provides wealth across the spectrum, it's really the only thing that does.

"Most other types of wealth are really heavily concentrated in the wealthiest 10 per cent."

The figures also show a stark gap in household wealth. The top 10 per cent of households hold around half of all wealth, while the top 20 per cent hold 70 per cent.

In contrast, the bottom 40 per cent of households controlled just 3 per cent of the wealth.

Statistics NZ said the wealth pattern for the top 10 per cent of households in New Zealand was "consistent with the OECD average" for countries for which the data is readily available.

The top 1 per cent of New Zealand households control around 18 per cent of the wealth.

This is well below the figure in the United States, where the wealthiest 1 per cent of households control close to 40 per cent of the wealth, but shows a far greater concentration of wealth than in Australia, where the figure is 13 per cent.

Green Party co-leader Metiria Turei said the survey pointed to "stark" wealth inequality.

"Wealth inequality is driving the housing crisis, and causing over 40,000 children's hospital visits every year because they live in cold, damp, and mouldy homes."

Labour's finance spokesman Grant Robertson said wealth inequality was growing under the National Government.

"Reducing inequality should be the number one priority of this Government. It is taking away opportunity and undermining the economic and social security of our country," Robertson said.

He claimed the "big driver" of the inequality was house prices.

"National's inability to solve the housing crisis is locking a generation out of home ownership. This makes it almost impossible for low income households to catch up."

* Comments on this story have now closed.

 - Stuff

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