Inequality analysis gives wrong impression

Recent analysis of trends in inequality over the last 20 years by a tax consultant gives a misleading impression of the reality of inequality and poverty in New Zealand, the Green Party says.

Peter Sherwin, Partner, Privately Held Business at Grant Thornton New Zealand, has looked at Ministry of Social Development data and says there is no evidence of a growing divide in New Zealand over the last 20 years.

“What Mr Sherwin didn't point out was that in the six years to 1992 – when his analysis began – child poverty more than doubled and income inequality in New Zealand grew faster than in any other developed nation," Green Party Co-leader Metiria Turei said.

“Over the last 20 years, the rate of child poverty in New Zealand has remained at shockingly high levels, where over a quarter of all New Zealand children live below the breadline. Successive governments have maintained and tolerated shocking levels of poverty and deprivation among our children. That lack of progress for our children is nothing to be proud of, it’s a failure.

“National has no plan at all to address the rates of poverty and material deprivation among our children. Three more years of this kind of denial will make life worse for many of our children.

“But the Green Party has a $1 billion plan, based on the recommendations of all the experts, that will reduce poverty and ensure our economy works for the benefit of everyone.

“Mr Sherwin's analysis of income inequality only tells part of the story of the growing divide between the haves and the have nots in New Zealand. The wealth of those on the rich list for example, doubled in the past 10 years. Much of that new wealth was based on un-counted, tax free capital gains.

“Mr Sherwin's analysis also uses the number of children living in benefit dependent homes as a proxy for child poverty. He has found that the number of those children is going down, but not at a fast enough rate.

“But it's no longer true that only the children of beneficiaries are poor.  The Ministry of Social Development data shows that the percentage of children in poverty whose parents work is increasing, under National.

“We now have about 40 per cent of all children in poverty living in homes where at least one adult works full time.

“With National fixated on keeping wages as low as possible it is inevitable that more children whose parents work will also be living in poverty. That's what we are seeing under National.

“Inequality is one of the most concerning issues facing New Zealanders this election. Both the data and real world experiences of Kiwis proves that the poor are getting poorer and the rich are getting richer.

“Our plan to provide an additional $60 per week for families currently missing out through our Children’s Credit, an increase in the minimum wage of $18 an hour by 2017, and putting health and welfare support into schools, so kids are healthy and ready to learn will provide the kind of transformation that New Zealand needs.

“Every child in New Zealand deserves to have what they need to thrive, any less is a failure," Mrs Turei said.