Wednesday, July 20, 2016

Child Poverty in New Zealand

Ethnic inequalities in poverty among young people in New Zealand has remained the same for over two decades. A study of 8500 secondary students done in 2012 has found that nearly half of Pacific students are living in poverty. Researchers using the data have found that overall one in five young people were found to be suffering hardship and two thirds of that group had housing issues such as living in garages or using living rooms as bedrooms.

The University of Auckland study surveyed randomly selected individual teenagers in schools around New Zealand. They grouped students by household poverty based on nine indicators of deprivation, including having no parent in paid employment, no car and no computer. The students needed to report two or more indicators before they were classified as experiencing poverty, Fifteen per cent of children showed the effects of unaffordable housing and moderate levels of being unable to afford basic necessities, and a further five percent affected by very high levels of material hardship. Maori and Pacific students are disproportionately represented in these figures. The study is evidence that economic poverty matters for children right throughout their formative years and into their higher education, and it affects large numbers of teenagers.


Mike O'Brien, a spokesperson for Child Poverty Action Group, said, "To be quite blunt about it, I don't think there's any really serious commitment on government part to actually reducing poverty rates for households with children. They're relying entirely on paid work as the solution but given that 37 percent of children that in poverty are in households whose income comes from work, work in itself is not a solution," he said.

According to this article, from the late 1980s, the gap between the rich and the rest increased faster here than anywhere else in the OECD. The top 1 per cent in New Zealand have more than doubled their income in that time, from $158,000 per annum to $337,000 (inflation adjusted). In contrast, average disposable income for the bottom 10 per cent is $11,000, and for the bottom 40 per cent of income earners inequality is made worse as they struggle to pay for necessities with rising housing costs accounting for up to 42 per cent of their income.

Wealth inequality is double income inequality, with the top 10 per cent owning over 60 per cent of household wealth, and the bottom 40 per cent owning 3per cent of the wealth.

New Zealand, it seems, is a tax haven not for just foreign super rich, but also our own. The Inland Revenue identified 197 high-wealth individuals (defined as owning or controlling more than $50 million of assets) and found half declared personal incomes of less than $70,000 in the 2012 tax year.

Inequality is also exacerbated by the growing income divide between management and workers, which has widened since 1985 by 22 per cent compared to the OECD average of 15 per cent. Chief executives now get 22.5 times the pay of average workers. These obscene salaries and bonuses were highlighted by the recent announcement that the chief executive of VW will receive a bonus of $19 million despite the scandal of their car exhaust emissions cheating which wiped billions of profit from the company.


A Victoria University study shows welfare fraud ($30 million annually) targeted more than tax fraud ($1 billion-plus per year). The average welfare fraud was $76,000 with offenders having a 67 per cent chance of imprisonment and a 100 per cent repayment requirement, compared to average tax fraud of $229,000 and offenders having an 18 per cent chance of imprisonment and only having to repay 5 per cent.

The World Socialist Party (New Zealand):
 wsp.nz@worldsocialism.org

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