Rich-poor gap not growing: report

HAMISH RUTHERFORD
Last updated 14:47 08/07/2014

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A new report claims child poverty rates have dropped significantly over the past two years, although that was largely the reversal of an earlier increase.

Dr Brian Perry's annual household income report was released today by the Social Development Ministry, and does not paint a simple picture of inequality in New Zealand.

The 245-page report has been widely used by the Government to dismiss opposition claims that there is a growing gulf between the rich and poor in New Zealand.

The report found that child poverty rates, using a formula which compares income to accommodation costs, dropped 3 per cent in the 2011 to 2013 period. However, this was roughly the amount child poverty increased in the 2009-2011 period.

"Today's release shows we are making progress," Social Development Minister Paula Bennett said in a statement.

Although the report found that there was no "discernable" increase in income inequality in New Zealand since the 1990s, it concluded that the income in many households is only now recovering from declines during the global financial crisis.

Perry's report found that household income across New Zealand rose 4 per cent (above inflation) between 2011 and 2013, with the gains "fairly evenly" spread across income groups.

However, the report says lower income families were hit harder by the global financial crisis in 2009 to 2011.

"As a result... [from 2009 to 2013] the net change in average incomes for each of the lower five deciles was close to zero, whereas there was around a 5 per cent gain for the top five deciles."

Broadly the report maintains that over a longer period it has not found evidence of a growing gap between the rich and the poor.

Using the Gini co-efficient, which measures the statistical distribution of income across an economy, the report found that the top decile in New Zealand received 8.0 times that of the bottom decile, the average for the OECD, but more equal than Australia or Canada.

According to the report, the top 1 per cent of New Zealand received 8 per cent of all taxable income in 2010 and 2011, down from 9 per cent in the 1990s.

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