Economic Growth Leaves Too Many Behind – Closing The Gap

By   /   July 3, 2017  /   4 Comments

It’s time lower paid workers and beneficiaries got a fair share of what the Government and OECD insist is a strong New Zealand economy, Peter Malcolm, spokesperson for the income equality project Closing the Gap, said today.

“The Reserve Bank last week echoed a largely positive report from the OECD, stating that New Zealand’s growth has been above average,” Mr. Malcolm said. “Yet reports continue to emerge that paint a very different picture — one of entrenched inequality and shocking levels of child poverty.”

Superu, the Government’s own social policy research unit, reported this week that nearly 20 percent of New Zealanders are facing serious disadvantages in life, particularly around income, housing and employment, with single parents the hardest hit.

This follows damning reports on the state of child wellbeing in New Zealand (from UNICEF) and an inequality gap that successive governments have failed to dent (NZIER).

“It’s clear lower paid workers and beneficiaries, particularly single parents and children, are not sharing in New Zealand’s economic growth,” Mr. Malcolm said. “But this is a problem the government could address quickly and easily by raising the minimum wage and boosting benefits.”

Instead, Mr. Malcolm said, National is continuing to talk about tax cuts, which will do little to close the inequality gap or reduce deprivation and disadvantage. “From the better-off people that I talk to, many would prefer to see any spare Government money used to reduce inequality, depravation and disadvantage, especially for children, rather than tax cuts” he continued.

Mr Malcolm also said the implicit suggestion in the recent NZIER report that New Zealanders were wrong to be increasingly worried about inequality just because it hasn’t been getting notably worse was not accurate.

“We’re worried about inequality precisely because successive governments have done nothing to close the gap,” he said. “Why, if the economy is as robust as the government says it is, have our levels of inequality not been reduced? Why, if the economy is as robust as the government says it is, are so many children and families homeless or in poverty?”

Links / References:
Reserve Bank Statement of Intent (28 June 2017)

OECD Report (15 June 2017)

NZIER on Inequality (23 June 2017)

Superu Report (26 June 2017)

UNICEF (Innocenti) Report on Child Wellbeing in NZ (15 June 2017)

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  1. Stephen Howard says:

    Sharing in growth is not a solution because at the moment growth itself is a major problem. The Spirit Level authors have shown that there is a large decrease to scale in welfare after GDP per capita exceeds about $us10000. NZ has a multiple of this GDP. So yes further growth and tax cuts are likely to increase inequality but there needs to be a major rethink about growth itself.

    Is that an argument for socialism and redistribution? Well of course it is.

  2. CLEANGREEN says:

    “It’s time lower paid workers and beneficiaries got a fair share of what the Government and OECD insist is a strong New Zealand economy,”

    This will require sacking this evil Government.

    • Jack P says:

      I remember when Key promised tax cuts, he increased gst putting most of the load on to hard working kiwis and the poor. English will punish us for his tax cuts. I can’t imagine New Zealand surviving another 3 years of National.

      • Cut taxes…

        Raised GST, prescription charges, Family Court fees, and taxed newspaper delivery kids.

        Be very wary of National promising tax cuts. Nothing in life is free, and one way or another we will end up paying for those tax cuts .