WHAT THE STATS SAY

There are a number measure inequality.

The Ministry of Social Development’s 2013 Household Incomes Report showed a reduction in income inequality since the 2011 report, which showed the highest level of income inequality ever.

But according to the OECD’s 2013 report, New Zealand is the 19th most unequal of 24 countries. And inequality here increased faster than in any other OECD country bar Sweden, largely due to larger rises in overall incomes for the top 20 per cent of earners.

The authors of The Spirit Level, the book published in 2009 and quoted by Greens candidate Mark Servian, puts us at 6th most unequal of 23 countries, based on UN data.

But whatever statistic you use, income inequality has not reduced by any significant amount since the mid2000s, and it may get worse yet, says Paul Barber, policy adviser for the New Zealand Council of Christian Social Services.

‘‘There seems to be little prospect of a significant reduction in the near fu-

of ways

to ture because of the impacts of tax cuts, GST changes and [lack of] wage movement.

‘‘The past generation, from the mid1980s, has grown up in a much more unequal country than previous generations.’’

According to the OECD’s Divided We Stand document, published in 2011, income inequality among working-age people in New Zealand has increased rapidly over the past 25 years, but especially during the 1990s, with the gap remaining broadly flat since.

In 2008, the average income of the top 10 per cent was $113,000, nearly nine times higher than that of the bottom 10 per cent, who had an average income of $13,000. This is up from a ratio of 6 to 1 in the mid-1990s.

‘‘Income taxes and transfers played a smaller role for redistributing income in New Zealand than in most other OECD countries, reducing inequality by less than a fifth — in a typical OECD country, it is a quarter,’’ the document said. In other words, other countries tax the rich more. The OECD’s key findings were: Over the past 25 years, real house- hold incomes grew by 2.5 per cent per year for the richest 10 per cent of New Zealanders, but by 1.1 per cent for the poorest 10 per cent. Most of the income growth took place after the mid-1990s.

The total income share of top 1 per cent of earners rose from 6 per cent in 1980 to 9 per cent in 2005, and that of the top 0.1 per cent of earners more than doubled from 1.2 per cent to 2.7 per cent. At the same time, top marginal tax rates declined from 60 per cent in 1980 to 33 per cent in 2010.

Trends in employment and wages shaped the income distribution. The shares of wages and salaries in total household income saw a marked decrease between the mid-1980s and mid2000s, especially for low-income households — by more than 11 per cent. This is likely due to a large rise in the proportion of jobless households.

Market-driven inequality increased sharply between the mid-1980s and mid-1990s, while the tax and benefit system did little to counter the increase. The impact of taxes and benefits on reducing inequality declined over time.