Rich-poor gap gets wider in 80s and 90s

By Andrew Laxon

The gap between rich and poor in New Zealand has grown during the past two decades and the average New Zealander is no better off.

Men earn less in real terms than they did in 1982, while women earn more, said a Statistics New Zealand incomes report issued yesterday.

And by 1996 the average household had just about won back its 1982 level of spending power.

The report showed that from 1982 to 1996 the average male wage - adjusted for inflation - dropped slightly from $31,900 to $30,500, but women's average pay rose from $15,700 to $16,800.

Average disposable household incomes dipped from $36,100 to $35,500, although families were slightly better off when numbers of children were taken into account.

In Auckland, meanwhile, a demographic portrait released by the regional council showed annual household income of just over $42,000, which it said was about $8000 above the national average, and second to Wellingtonians' $45,000.

The Statistics New Zealand report said the most striking result of the figures was that income inequality had increased substantially.

During the 14-year period, high-income earners made more money, middle-income earners made less and those at the bottom stayed on about the same.

The biggest change in inequality occurred between 1986 and 1991, at a time of rising unemployment and big cuts in the top tax rate under the former Labour government. But the report, based on census figures, said income distribution between 1991 and 1996 was little changed.

It said in 1982 the top 10 per cent of households gained just over 20 per cent of after-tax income. In 1996 they gained more than 25 per cent.

The proportion of households receiving more from the state in benefits and superannuation than they paid in taxes rose from 30 per cent in 1982 and 1986 to 40 per cent in 1991 and 1996.

The Government Statistician, Len Cook, said the increase reflected the ageing population, more deliberate targeting of benefits at low-income households and higher unemployment.

The most over-represented people on low incomes were people aged 65 and over who lived alone, sole parents, Maori, women and children.

The Minister of Finance, Bill English, said there had been no increase in the proportion of people below the poverty line - 60 per cent of median income - as defined by Anglican church leaders in last September's Hikoi of Hope.

Apart from the benefits of tax cuts in the late 1980s, he said the top 10 per cent of New Zealanders could be better off because the premium for skills and knowledge in a changing economy was now widely understood.

The Government was concerned about the growing gap, which it planned to close by helping the disadvantaged rather than increasing taxes, said Mr English.

The statistics gathered by the Auckland Regional Council showed Aucklanders differed from other New Zealanders in that the typical household was less likely to be European and more likely to profess no religion and work longer hours.

The city's population was younger overall than other cities.