John Weekes

John Weekes is a reporter for the Herald on Sunday.

Middle NZ 'subsidises' the rest

Doco says our inequality is getting worse

Bryan Bruce.
Bryan Bruce.

Crusading doco-maker Bryan Bruce returns to TV screens this week to claim that New Zealand's middle class is subsidising the rich and the poor through a terrible tax burden.

In Mind The Gap, Bruce claims inequality is rising in New Zealand, and at a rate surpassing many developed countries.

His previous documentary Inside Child Poverty - screened four days before the 2011 general election - triggered heated discussions and campaign mud-slinging.

In Mind The Gap, screening on Thursday, Bruce visits a family in Christchurch living outdoors in tents, as well as members of the country's "working poor".

Bruce told the Herald on Sunday that there were too many barriers to people born poor and he wondered what baby boomers had left to the next generation.

"I'm a poor immigrant kid from Scotland," he said.

"We came here with nothing. This country gave me free milk and a free education and I'm eternally grateful for that. It's why I haven't left.

"My son had to pay for his education.

"He's a computer programmer, he's got major clients, and he lives in Australia."

Bruce said the middle class was squeezed from two directions and had become the "struggling class". Mind the Gap suggests that rich people benefit from tax evasion of up to $5 billion a year, and middle income earners subsidise low wages.

"We're subsidising people who work all week, just make their rent and have $10 left over," he said.

The Ministry of Social Development's latest Household Incomes Report said there was no evidence of any general rise or fall in income inequality since 2007.

"Redistribution through the tax and transfer system reduces income inequality very significantly compared with what it otherwise would be," it said.

Social Development Minister Paula Bennett said this week she was unlikely to take much notice of Bruce's documentary.

"I'll be in Parliament at that time so won't be watching, and I prefer to base policy on evidence rather than react to other people's ideologically-driven agendas."

Labour social development spokeswoman Jacinda Ardern said she welcomed debate on inequality.

"One of the things we've always prided ourselves on is the equality that exists in New Zealand and we're fast losing that." Ardern said.

"From the measures that we do have the suggestion certainly is New Zealand is more unequal now than it has been in a very long time."

Economists have markedly differing views on levels of inequality, and remedies.

"There is really one fundamental policy that's going to work, and that's education," economist Shamubeel Eaqub said.

"All the other stuff is tinkering around the edges and trying to get cute with inequality."

Lincoln University's Professor Paul Dalziel said inequality rose in the 80s and 90s but had largely stabilised, although the poorest 10 per cent had never benefited from neoliberalism.

Dalziel said many people in their late 30s were still earning only the minimum wage.

"There is definitely an issue in New Zealand about the way people with quite a bit of labour market experience are still working for essentially the minimum wage."

Bruce said he wanted a mature debate about New Zealand's future and core values.

"Hopefully if you talk about, if you're arguing on the couch about it, I'm happy."


Inside New Zealand: Mind the Gap: A Special Report on Inequality. TV3 at 7.30pm this Thursday.

- Herald on Sunday

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