Income up, but so were housing costs
New Zealand household disposable income was up before Covid-19 hit, but so were housing costs, according to Stats NZ data released yesterday.
Average annual household disposable income, after tax, rose 3.9 per cent to $86,626 for the year ended June 2020 compared with a year earlier. Gross average annual household income rose 3.6 per cent to $107,731. At the same time, the average annual housing cost increased 3.8 per cent to $17,980.
The 12-month period was in fact reduced to nine months because of the Covid-19 level 4 lockdown on March 25, which prevented Stats NZ from interviewing people face to face. With data only collected until the end of March, it was a smaller sample than the previous year’s Household Economic Survey (HES).
‘‘We have investigated the quality of the data that has been collected in the nine months, and are satisfied that it is fit for purpose,’’ said Stats NZ income and poverty statistics manager Chris Pooch.
Professor Philippa HowdenChapman, professor of public health at Otago University, said the rise in household incomes was good news.
‘‘If you’re looking at equivalised, that is they take account of how many people are in the household, after tax and housing costs they’re up 5 per cent, even taking into account increasing housing cost.
‘‘So that’s good news, – the worse news is if you look at Ma¯ ori separately, Ma¯ ori households have 15 per cent less income than non-Ma¯ori income households have, so we’re still seeing inequality there.’’
Average inequality, as measured by the Gini coefficient, was down slightly to 32.0 from 32.7 a year earlier, thanks partly to government measures, she said.
‘‘It’s starting to turn down a bit, by less than 1 per cent, but that’s significant because it was rising for quite a while.’’
For the first time the HES showed annual average disposable income for disabled people – $40,451, compared with $48,076 for the total population.
While overall household incomes were up, income for the poorest 10th of households was up just 1.8 per cent compared with the rest of households.
For the period, the highest of the five income groups received a greater share of income than the bottom three groups, or quintiles, combined, Stats NZ said.
Households spent $21 of every $100 of their household income on housing costs on average, a similar proportion to the 2019 survey.
Spending on mortgage interest payments fell 6.7 per cent to $242.40 a week over the period, easing some of the costs for homeowners.