Wednesday, July 08, 2015

New Zealand Unequal

A think-tank claim that New Zealand has 'no problem of rising inequality' based on a Treasury paper showing that income inequality has been stable for the last decade. And indeed it has, thanks to Working for Families propping up low incomes and the global financial crisis temporarily biting into higher ones (through, for example, lower stockmarket returns).

This selective reading omits is the fact that in the two decades from the mid-1980s on, the rich-poor divide widened faster in New Zealand than in any other developed country. Incomes for the richest New Zealanders have doubled, while those for the poorest have barely risen (and, after housing costs, have actually fallen over 30 years). The gap between rich and poor has in fact widened dramatically. In a system where income goes disproportionately to the already well-off, ordinary workers are missing out on the rewards of their efforts, to the tune of billions of dollars a year. Welfare benefits, cut by a quarter in 1991 and increased just 8 per cent in the last budget, are far too low to meet people's basic needs.

The result is a doubling of child poverty and the return of childhood diseases unknown in most developed countries with poverty-related skin diseases soaring while gated communities proliferate. Cold, damp homes can be death traps housing children whose parents can't afford to buy them warm clothing, feed them breakfast, or provide a quiet space for studying.

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