Rising housing costs driving inequality, Govt reports show

Social Development Minister Anne Tolley.

The gap between rich and poor is growing in New Zealand, new data shows, partly driven by rising housing costs.

The poorest households in New Zealand are spending more than half their income on accommodation, a series of Ministry of Social Development reports revealed.

The reports, released today, cover the year to June 2015. Over that period, poverty levels and remained static or fell slightly.

The proportion of children living in relative poverty was 28 per cent, down from 29 per cent last year. That fall amounted to 10,000 fewer children in relative poverty.

The number of children experiencing material hardship, such as living in a cold, damp house or not owning more than a pair of shoes, rose from 145,000 to 155,000. Around 85,000 children were in "severe" hardship - up from 80,000 the previous year.

The Government, while noting poverty and housing problems, maintained that "overall we are going in the right direction".

"While still too high, there has been no rise in poverty and material hardship trends for children, which the report says are flat or falling," Social Development Minister Anne Tolley said.

Tolley pointed out that most families had experienced growth in their incomes in recent years.

Over the last four years, the median household income rose, on average, by just under 3 per cent.

The Labour Party pointed out that the benefits of this growth were uneven.

"Most New Zealanders aren't getting their fair share - the benefits of growth are clearly going to the top," Labour's finance spokesman Grant Robertson said.

The top 10 per cent of earners in New Zealand were earning nearly ten times more than the bottom 10 per cent.

"This is a record and not one to be proud of," Robertson said.

The report said the proportion of income earned by the top 10 per cent was "slightly higher than usual" but similar to other comparable countries.

Greens and Labour also pointed out the impact of high housing costs in the reports.

Overall, 28 per cent of families were spending more than 30c in every dollar on housing.

The poorest families were spending 54 per cent of their income on housing costs, up from 29 per cent when records began in the 1980s.

In response, Tolley said today: "The nut we've really got to crack is that increased cost of housing. Unfortunately, you just can't wave a magic wand.

"We've tried to increase wages ... and we are increasing the number of jobs and helping people into work.

"We are making progress, but it is slow progress."

Green Party co-leader Metiria Turei said the flat rates of poverty meant deprivation had become "the new normal" in this country.

"The lot of New Zealand children has not been improving under the National Government, and instead poverty is becoming entrenched for far too many kids," she said.

Speaking in Parliament today, Tolley said she would like to see the levels of poverty and hardship come down further.

The latest report does not take into account major initiatives for vulnerable families in the 2016 Budget, including the first increase in welfare payments in 30 years.

However, it also does not include further increases in housing costs in the 2015-16 year.