The 1pc go from wealthy to even wealthier
Treasury releases new estimates of the country’s unequal wealth distribution
Aquarter of New Zealand’s household wealth is concentrated in the hands of the richest 1 per cent, according to two new, experimental estimates produced by the Treasury at the Government’s behest.
The new estimates suggest that the top percentile of the population holds significantly more wealth than official statistics show, meaning that wealth disparity between the richest New Zealanders and the rest of the population is likely to be much greater than previously thought.
Treasury’s new estimates of the country’s unequal wealth distribution were produced last August at the request of Associate Minister of Finance David Parker. Just weeks later, Labour ministers ruled out the introduction of an asset tax on the country’s wealthiest people.
However, the Treasury report suggests Labour remains interested in wealth distribution for the development of tax policy.
The report notes: “Officials will report back on next steps as part of development of the next tax policy work programme.” A spokesman for Parker said: “We need a better understanding of wealth distribution to figure out if the tax system is fair.” He added: “The Prime Minister and other ministers made it clear during the election campaign that a wealth tax is off the table.”
The novel methods deployed by the Treasury indicate that a quarter of the net worth of the country’s richest households has been missed by the conventional Stats NZ tally. According to the Treasury, 25-26 per cent of household wealth is in the hands of the top percentile, while conventional statistics put it at 20 per cent.
And Treasury’s work shows 63-70 per cent of the country’s wealth is held by the richest 10 per cent. By contrast, Stats NZ finds 59 per cent of assets are owned by the top decile.
Conventional picture flawed
The picture of New Zealand’s wealth distribution conventionally relies on data from a survey conducted triennially as part of Stats NZ’S Household Economic Survey (HES), last published in 2018. However, it is widely believed that the survey underestimates the net worth of the country’s wealthiest households.
Very wealthy households constitute only a tiny sample in the HES and are likely to under-report their wealth.
New Zealand is in the minority of OECD countries that do not actively oversample wealthy households to try to correct for this. Stats NZ said it does not have the funds to oversample the wealthy.
Wealth and expenditure stats manager Emily Shrosbree said other methods for better understanding wealthy households are under consideration.
“The information needed to better measure the top end of the wealth distribution, i.e. the very wealthy, has been clearly identified via our stakeholder engagement, and we are working closely with Treasury on this.”
Treasury’s novel methods
Both calculation methods deployed by the Treasury continue to use HES information, but augmented with data from unconventional sources.
The first method incorporates wealth figures drawn from the NBR Rich List. This system found 26 per cent of wealth is held by the top percentile and 63 per cent by the top decile.
The use of media rich-list data has become increasingly common internationally as a way of correcting for very small survey samples of the world’s wealthiest people.
In January, the Resolution Foundation think tank in the UK released wealth distribution research that included data from the Sunday Times Rich List. The study found that 23 per cent of UK wealth is held by the country’s richest 1 per cent, significantly more than the 18 per cent of assets reported in official statistics.
The second Treasury method incorporates data from Inland Revenue and infers asset distribution from taxable income. This found 25 per cent of household net worth is held by the country’s top percentile, and 70 per cent by the top decile.
Treasury noted its unconventional methods should be “approached with caution” for various reasons, including that the data sources were not designed for understanding wealth distribution. The estimates, the report said, should be considered “directional rather than precise”.
The America’s Cup match remains level. After Team New Zealand and Luna Rossa traded wins on the opening day of the match, the two did so again on day two yesterday to see the scores sit at 2-after after four of a possible 13 races.
In a day of light and inconsistent conditions, the performances followed suit, particularly Luna Rossa who sailed a near-flawless race in the opening contest on the day, before an error on the second leg of race two saw Team New Zealand cruise to victory by a large margin.
This were relatively interesting down the first leg of the second race as the sides remained close and the hope remained for a possible pass or two down wind. But it because an exercise rather than a high-pressure race when a bad Luna Rossa jibe saw them drop right off the pace as they had an issue with their foils.
While Luna Rossa dropped off the pace, Team New Zealand sailed a strong race, showing their pace and making clean manoeuvres up and down the course, eventually winning by 63 seconds.
“That was a really good race for us,” Team New Zealand flight controller Blair Tuke said after the win. The boat’s going really well and we managed to extend nicely.”
AUT sailing professor Mark
Orams said the win would be a big relief to Team New Zealand and their supporters.
“This is a thrashing . . . 800 metres in front,” said Orams. “It looked as though they (Team NZ) were getting the boat into the groove.
“We also learned that Te Rehutai is fast, in these light winds, this is something we did not know before today. The numbers coming off her suggest a speed advantage over LR in these under 10 knots of wind speed conditions.
“That’s a surprise because almost everyone picked LR to be the faster boat in the very light winds.
“However even if you are faster these narrow race tracks mean that it is extremely difficult to get past the boat in front.
“If we track back over the races from the Prada Cup semifinals, finals and now these first four races of the AC, in 16 out of 17 races, the boat leading off the start wins.”
It was a different story earlier in the afternoon, when Luna Rossa claimed a 37-second win for a short-live lead in the series.
Despite some onboard issues before racing that appeared to threaten Luna Rossa’s day, they sailed a near faultless race to further show they are well and truly capable of winning this competition.
The teams both got out of the starting gate well, but Luna Rossa got the better of the first manoeuvre, and executing well and sailed in the face of Team New Zealand to build a handy lead on the first leg. The defender needed to find something, and opted to split the course around the first gate.
Initially, it looked as though it had been a good move, as Team New Zealand ate into the Luna Rossa lead on the second leg.
However, an excellent third leg from the Italians saw them more than double their lead through the halfway point in the race, which they extended further late in the race for a clear win.
In countries with historic ties to Britain, allegations by Prince Harry and Meghan that an unnamed member of the royal family had “concerns” over the colour of their unborn baby’s skin have raised a thorny question: Do those nations really want to be so closely connected to Britain and its royal family any more?
It was expected the interview would expose more rifts in the royal family. Now it seems to be risking divisions within the “family” of the Commonwealth – an association of 54 countries, most of them former British colonies, held together by historic ties.
For decades, Queen Elizabeth II has been the driving force behind the Commonwealth.
After the TV interview, shown in the US on the eve of Commonwealth Day, former Australian Prime Minister Malcolm Turnbull cited it as another reason for the country to sever its constitutional ties to the British monarchy.
“After the end of the Queen’s reign, that is the time for us to say: okay, we’ve passed that watershed,” Turnbull told Australian Broadcasting Corporation. “Do we really want to have whoever happens to be the head of state, the king or queen of the UK, automatically our head of state?”
The value of the Commonwealth has been debated before, with critics questioning if countries and people once colonised – and even oppressed – should remain in such an association with a former coloniser. Its stated aim is to improve international relations, but Britain’s relationship with the members has been clouded by diplomatic missteps and the legacy of empire.
In a speech to mark Commonwealth Day on Monday, the Queen spoke of “the spirit of unity.”
Charismatic royals like Harry and Meghan have been deployed in the past to Commonwealth-related events with young people, businesses and volunteer groups.
It’s Britain and the royal family. What did you expect? They oppressed us for years. African Twitter user
But their interview this week “opens our eyes further” on the merits of the Commonwealth, wrote Nicholas Sengoba, a newspaper columnist in the former colony of Uganda.
He cited “unresolved issues” in his country relating to the abuses of colonialism and questioned whether the heads of Commonwealth countries should still be “proud to eat dinner” with members of the British royal family, considering the accusations.
Meghan, who is biracial, had said in the interview an unidentified member of the royal family had raised “concerns” about the colour of her baby when she was pregnant with her son, Archie, and that the palace failed to help her when she had suicidal thoughts.
Buckingham Palace said on Tuesday the allegations of racism by Harry and Meghan were “concerning” and would be addressed privately by the royal family.
Reaction to the interview was especially fierce in Africa. It was encapsulated by one Twitter user in South Africa who wrote: “It’s Britain and the royal family. What did you expect? They oppressed us for years.”
Meghan and Harry travelled to South Africa in 2019, where their impending split with the royal family became clearer and they even spoke of possibly living there.
Mohammed Groenewald, who showed them around at a mosque in Cape Town, was still digesting the interview, which was only shown in South Africa on Monday. But he said that, more than anything, it sparked memories of “British colonial racism.”
“It comes out very clearly,” he said.
In Kenya, a former colony where a young Princess Elizabeth was visiting in 1952 when she learned about the death of her father and thus that she would become queen, news of the interview also has begun appearing in the country’s newspapers.
“We feel very angry seeing our fellow African sister being harassed because she is black,” said Nairobi resident Sylvia Wangari, referring to Meghan. She added that Kenyans in 1952 did not show Elizabeth “any racism, and she stayed here without us showing her any discrimination.”
Canadian Prime Minister Justin Trudeau declined to comment on the interview. He said many institutions in Canada were built around colonialism and systematic racism, including Parliament, and the answer was to listen to Canadians who face discrimination so institutions can be fixed.
“The answer is not to suddenly toss out all the institutions and start over,” Trudeau said.
“I wish all the members of the royal family all the best, but my focus is getting through this pandemic.
“If people want to later talk about constitutional change and shifting our system of government that’s fine, and they can have those conversations, but right now I’m not having those conversations.”
Jagmeet Singh, leader of the opposition New Democratic Party, said the monarchy “is in no way beneficial to Canadians in terms of their everyday life”. “And with the systematic racism that we’ve seen, it seems to be in that institution as well.”
The interview was not shown on TV in India, the Commonwealth’s most populous member country, with 1.3 billion people, but it still was covered by the media and drew negative reactions from the public toward the royals.
“Behind that whole elegant facade are thoughts that are not so elegant,” fashion writer Meenakshi Singh said.
Lawyer Sunaina Phul said the Commonwealth “is relevant to the royal family, of course, because it shows that they ruled so many places. I don’t know why we are still a part of it.”
AP
Since the disaster, contaminated cooling water has leaked from the damaged reactor containment vessels into the basements of reactor buildings, where it mixes with groundwater.
Millions of dollars of international student revenue has been stripped from language providers in the Bay — causing job losses and pushing some centres to the brink.
Student numbers continue to fall with calls for the Government to lift border restrictions before the end of this year and extend funding, set to run out in June, that is keeping some schools afloat.
But Education Minister Chris Hipkins said there were many variables that would impact the future opening of the New Zealand border.
It was not possible to predict precisely when additional international students would be approved for entry, he said.
He said $8.08 million had been paid out to private training establishments through the Covid-19 Response and Recovery Fund.
Aspire2 International Tauranga Campus manager Poonam Khirsariya said it had to downsize and would see further staff reductions to match falling international student numbers.
“We are very conscious of the huge impact this is having on our personnel and we are grateful to them for their understanding — we also want to acknowledge the ongoing support we have had from our landlord.
“The sacrifice staff have made and this support has made survival possible.”
It had 200 students and had recently been approved to deliver IT programmes free to eligible New Zealanders.
“This opens up an opportunity for New Zealanders to study our New Zealand Diploma in Information Technology Technical Support Level 5 and New Zealand Diploma in Systems Administration Level 6 to domestic students.”
Mount Maunganui Language Centre director Geoff Butler said it had about 30 per cent of the students it would normally have and had to say goodbye to several staff in 2020.
“That was tough.”
The centre’s revenue dropped by about 75 per cent last year.
But demand from students was still strong and while he applauded New Zealand’s handling of the pandemic, he hoped the Government would allow international students to travel safely here, soon.
Olive Fitzjohn from the Tauranga Korean Times, which places students in schools, said it had about 250 students from 140-150 families last year compared with 185 students (95 families) living in Tauranga at the moment.
Another 30 families had paid a deposit to schools in Tauranga and were waiting for the border to open.
“We really hope the Government will consider opening the border before the end of the year or at least we would like to hear a planned schedule about when international students will be able to enter New unlikely.”
The Korean Times estimated Tauranga schools would have lost about $300,000 in tuition fees as a result alongside $1m to $1.5m from the local economy, last year.
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