Gap between rich and poor shrinks, Maori and Pacific make gains

28 August 2008

For the first time in 20 years the gap between the rich and poor is closing.

Figures released today in the Ministry of Social Development's 2008 Social Report revealed income inequality between the top 20 percent of earners and the lowest 20 percent has dropped - the first decrease since 1988.

The report also found there are fewer people living on low incomes with 13 percent of the population living in households with low incomes compared with 22 percent in 1997.

From 2004 to 2007 incomes for households in the low to middle income range grew more strongly than incomes for the top 40 percent of households.

Another key feature of the report shows that over the longer term, Maori and Pacific peoples have made significant advances in three areas; unemployment rates have reduced substantially, far more Maori and Pacific peoples are gaining access to early childhood and tertiary education and Maori life expectancy has also improved considerably. However, in most areas reported on, significant gaps remain.

A reduction in income inequality and the gains made by Maori and Pacific peoples are part of a wider snapshot provided by the report into the country's wellbeing and quality of life over time. The report supplies information to both inform debate and allow central and regional government to identify issues and areas for further research.

Over the longer term, the report shows social outcomes are improving strongly.
Since the mid-1990s there have been improvements across a range of areas particularly health, knowledge and skills, paid work and economic standard of living.

Don Gray, Ministry of Social Development Deputy Chief Executive, attributes the reduction in income inequality to the record-low unemployment rates and robust economic conditions the country has experienced. The impact of Working for Families and the focus on getting more people into jobs has also provided extra cash to lower-income families.

''This report shows that New Zealander's wellbeing has improved markedly across numerous fields,'' Mr Gray said.

''Overall as a nation we are healthier, incomes have increased, our teenagers are leaving school better qualified, income inequality has dropped and we're living longer. Compared internationally, we're also doing well as New Zealand exceeds or equals the OECD median for two-thirds of the 22 areas where there is internationally comparable data.''

Despite the large gains made in the majority of the report, it also finds improvements can be made in housing affordability, assault mortality, road traffic injuries, obesity and potentially hazardous drinking.

''The report highlights areas that need more attention, but in raising these issues it also provides an opportunity to improve them, Mr Gray said.

''Tackling these areas will help raise our overall wellbeing even higher.''

ENDS

Copies of the report are available from http://www.socialreport.msd.govt.nz

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