Sunday, July 15, 2012

Nothing new in New Zealand

New Zealand today has one of the worst rates of income inequality compared with other developed or wealthy countries. Two-income families are increasingly worse off than single-income families were a generation ago.

Inequality has increased here faster than in any other Organisation for Economic Co-operation and Development (OECD) country. Most of the increase has been the result of larger rises in overall incomes for the top 20 per cent of income earners; and incomes for the bottom 20 per cent have decreased over the two decades from the mid-1980s. To make things worse, wealth is even more unevenly distributed than income and the level of wealth inequality is twice that of income inequality.

The most recent statistics available show wealth inequalities have increased to the extent that the top 10% of the population accounts for 51.8% of the country's net worth, while the bottom 50% of people owns just 5.2%

Over 500,000 people live in households with "negative wealth" - that is, they have more debt than income - and half of New Zealand income earners cannot afford to save.

Those on middle incomes are also bearing the brunt of the rich getting richer and the poor getting poorer, among them 200,000 children living in poverty. Federation of Family Budgeting Services chief executive Raewyn Fox  said she had seen a large increase in the number of people who might be considered "well off" coming in for advice on how to handle their money. She said easy access to credit (another ploy of the rich) was a trap that too many people fell into, without giving thought to the future and something tipping the balance and leaving them in a financially dangerous position.

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