Top 10% of NZ own 60% of all wealth

The current wealth divide is the worst it has been since 2003. Photo / iStock

Despite what we like to think - wealth is not evenly distributed in New Zealand, in fact it's the worst it's been in over a decade.

Statistics New Zealand's wealth share of individuals shows the top 10 per cent of people have almost 60 per cent of wealth.

The figures are for the year to June 2015.

Labour market and household statistics manager Diane Ramsay said it was the biggest divide between the rich and poor since 2003.

She said it was possibly worse, but when records began in 2001 slightly different questions were asked of slightly different demographics.

What was evident was the inequality of net worth distribution that continued to grow.

Divides across ethnic groups continue; European people have an individual median net worth of $114,000 compared to $33,000 for people of Asian descent, $23,000 for Maori, and $12,000 for Pacific people.

Our youth are amongst the poorest in society. People aged between 15-24 had the lowest individual median net worth of any age group, just $1000 and most young people have not yet accumulated assets but do have debt.

The most common debt is accumulated through loans for further education.

The numbers are similar per household, half the country's wealth belongs to the top 10 per cent of households.

In stark contrast the bottom 40 per cent of households hold just 3 per cent of total wealth.

The average household is worth $289,000.

Labour's Finance spokesperson Grant Robertson said inequality was getting worse under National with almost 60 per cent of the wealth in this country concentrated in the hands of the top 10 per cent.

"Reducing inequality should be the number one priority of this Government. It is taking away opportunity and undermining the economic and social security of our country.

"The ramifications of inequality have become clear in recent days in the Brexit vote and also in the way the US Presidential primaries have played out.

One of the consequences of inequality is that it creates a large group of disenfranchised people who feel forgotten and alienated. They then become easy targets for peddlers of fear and hate."

Robertson said New Zealand's inequality was worse than the UK, Australia and Canada. In New Zealand the net worth of the bottom 20 per cent was less than a quarter of the net worth of the top 20 per cent.

"And it's only going to get worse. The bottom 20 per cent owe more than they own, while the top 20 per cent own more than 20 times what they owe. This presents a risk to low-income households if interest rates rise."

Prime Minister John Key said the figures were "largely consistent with what we have seen over the last 20 or 30 years" - and largely driven by increasing house prices.

"It is not surprising it is getting a little bit more that way because, in reality, better-off New Zealanders will own assets, particularly houses, and those house prices have been rising. So that's what will be driving that."

Mr Key said New Zealand's tax system redistributed wealth, with those on lower incomes paying less tax than the benefits they received through Working For Families.

See Statistics NZ's full report here: