Income inequality increasing, unbalancing Aotearoa - author

Source: Q and A

Income inequality is increasing in New Zealand, and it's unbalancing Aotearoa, according to author and researcher Max Rashbrooke.

The gap between rich and poor in New Zealand continue to widen.

Rashbrooke, a researcher and author who has been looking at income inequality for his new book Too Much Money told Q+A with Jack Tame that one per cent of New Zealanders, around 40,000 people, have 68 times the net worth of the average Kiwi.

“The wealthiest one percent of New Zealanders own literally a quarter of the whole country.

“And what I think is also happening is that increased wealth is allowing people to buy a whole lot of advantages – you know, better access to housing, better healthcare, better social networks and political influence.

"That’s leading to really significant social divisions that are being passed down through the generations.”

He says its not an abstract problem, “you have to see poverty and wealth as connected.”

In the 1980s wage and salary earners received around 70 per cent of corporate revenue, now their share is under 60 per cent, making the decline in the average wage (compared to if they had held their share of corporate revenue) around $14,000 per year.

“So that increase in wealth for people at the upper end is coming at the expense of the average wage earner.”

Rashbrooke argues that the richest New Zealanders are becoming increasingly dominant.

He told Tame that research done for the book showed that in the 1990s the Rich List wealth was the equivalent of six per cent of NZ’s GDP. Its now increased to 20 per cent of GDP.

That level of wealth leads to the richest New Zealanders being “insulated from the realities of ordinary New Zealanders.”

“I think one of the things that a society inherently relies on, is some kind of social cohesion, you know its very hard to come together and confront the problems that we all face as a nation if people are leading profoundly different lives.

“When people become segregated from each other they lose their sense of empathy in each other, that knowledge of how the other half lives.”

He says that has widespread implications, including for democracy.

“If people have go so little idea about what its like for the rest of the country how can they sensibly cast their vote or make submissions on laws that are going to effect everyone in this country.”