Household incomes data rebut claims of rising poverty, inequality

The government has produced statistical evidence that households are benefitting from the prosperity boom but the rising cost of housing is lessening the gains for some.

The Ministry of Social Development’s latest Household Incomes Report covers the years from 1982-2015 and shows that the majority have experienced strong real income growth in recent years.

It also backs up the fact that New Zealand has experienced a stronger recovery than many OECD countries since the Global Financial Crisis.

The NZ median household income grew on average by just under 3% each year in real terms between 2011 and 2015 and net gains between 2009 and 2015 are better than for many OECD countries, such as the UK, Australia, Italy, Spain, France, Germany and the US.

“The report finds there is no evidence of any sustained rise or fall in household income inequality in more than a decade,” a statement by Social Development Minister Anne Tolley says.

“However, there is evidence that income inequality after housing costs has risen in the last few years as compared with the mid-2000s and earlier.”

The report also finds that income poverty is either flat or falling and that there is no evidence of any increasing depth of relative income poverty over the last two decades.

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, with this data collected before the government’s $790 million child material hardship package came into effect in April 2016, the statement continues.
 
The figures also show that housing affordability and quality issues remain for lower income groups, while incomes for beneficiaries and minimum wage workers have remained steady in real terms.

“The government takes these issues seriously, which is why we are among the best in the world at monitoring and analysing data and long-term trends, so that we can take appropriate action,” Mrs Tolley says in her comments.

“The report shows that overall we are going in the right direction. It also highlights that we are right to focus on helping people out of poverty and into training and employment.

“There are more than 40,000 fewer children in benefit dependent households since welfare reforms were introduced, and over 38,000 fewer people on a benefit. Alongside this we have increased support for low-income families."

The statement also outlines recent government measures to alleviate child poverty, including a child material hardship package that raised benefit rates for the first time in 43 years; increased Working for Families payments for low income working families; and increased Childcare Assistance.

Other measures have been free GP visits and prescriptions for children under 13 and an expanded Kickstart programme that provides about 7.5 million free breakfasts in schools.

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