Rich steadily getting richer, survey suggests

By Simon Collins

More than half of New Zealand's total net worth is now owned by the richest 10 per cent of the population.

A new survey by Statistics NZ shows that the distribution of wealth has become even more unequal in 2003-04 than in the previous survey in 2001, when the richest 10 per cent owned only 48 per cent of the country's total wealth. They now own 52 per cent.

The richest half of the country owned 93 per cent of the wealth in 2001, and now owns 95 per cent. So the share of the poorest half has dropped from 7 per cent to 5 per cent.

But the two surveys cannot be compared directly. The 2001 survey, a one-off exercise for the Retirement Commission, was based on "economic units" where a couple counted as one unit, whereas the latest survey is the first part of a long-term sampling to be repeated up to 2010 and is based on individuals.

The new survey includes details which the previous one did not, revealing that the richest 1 per cent of individuals own 16 per cent of the country's wealth, and the richest 5 per cent own 38 per cent of the total.

The median net worth rises with age. The 15 to 24 age group was worth $2400, the 25 to 34 group $31,000, the 35 to 44 group $82,400, the 45 to 54 group $142,900 and the 55 to 64 group had $170,000.

The median drops back in the 65-plus retirement age bracket to $149,500. Overall the median individual is worth just $69,800.

More than half of all the 6.5 per cent of people with negative net worth are aged 15 to 24. This is probably because of student loans.

As in 2001, the latest survey shows that Europeans have by far the highest median net worth ($86,900), followed by Asians ($21,000), others ($19,000), Maori ($18,000) and Pacific people ($6700).

The manager of Statistics NZ's standard of living unit, Andrea Blackburn, told a social policy conference in Wellington yesterday that about 40 per cent of New Zealanders' net wealth was held in residential property. Data on other assets were not yet available.

She said New Zealand's skewed distribution of wealth was similar to Canada's, but still not as unequal as in the United States.

"It's typical of developed countries," she said.

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on production bpcf01 at 22 Dec 2014 05:05:14 Processing Time: 470ms