Bad Tax Policy Feeding Inequality, Study Shows

A new study from Oxfam shows the government's failure to introduce fair taxes is a key cause of New Zealand's persistently high level of inequality, Peter Malcolm, spokesperson for the income equality project Closing the Gap, said today.

The report by Oxfam and Development Finance International ranked 152 countries on their commitment to reducing inequality. New Zealand's overall ranking is 30, but when it comes to progressive taxation, we rank a dismal 115th.

" The latest Household Incomes Report, released last Tuesday, shows how entrenched inequality has become in this country, and reinforces Oxfam’s assessment that this Government has failed to tackle inequality " Mr. Malcolm said.

"Taken together, these reports demonstrate the need for a determined shift towards a steeply progressive tax regime targeting high earners, coupled with significant income increases for low earners and those on benefits," Mr. Malcolm said.

The Household Incomes Report explores how much housing costs are contributing to both poverty and inequality. "The lowest fifth of income earners are now paying more than half of their incomes for housing," Mr. Malcolm said, "compared with less than 30 percent in the 1980s."

"In its response today, the Government focused on a paltry three percent rise in median household incomes, while downplaying the huge increases in housings costs, unacceptable levels of poverty, and the fact that there's been absolutely no progress toward making New Zealand a more equal society," he said.

“The level of inequality we have in New Zealand is bad for us all. The well off and the poor are happier, and more healthy in a more equal society. This is a reminder of how this country was built on egalitarian values. Increases in benefits, the wages of the low paid, a wider, fairer, more progressive, all encompassing—a tax on all capital gain---tax would go a long way to a more equal and fairer society.” Mr. Malcolm concluded..

Links/References:
• Oxfam/DFI report: http://bit.ly/2useOxT
• 2017 Household Incomes Report (MSD): http://www.msd.govt.nz/about-msd-and-our-work/publications-resources/monitoring/household-incomes/index.html

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