27 Jul 2015

Material wellbeing study shows NZ richer

9:19 am on 27 July 2015

A study has found New Zealand is richer and performing better than it is given credit for, but it is also one of the more unequal developed countries.

Using country averages for households that include a 15-year-old child, New Zealand had the third highest material living standards in the world in 2012 - only behind the United States and Canada, and ahead of Australia.

The measure of material wellbeing was based on actual household consumption rather than on their incomes.

New Zealand stood at $4,907, compared with $5,075 in the US.

Indonesia ranked lowest at $1,741.

The country's high ranking in 2012 followed rankings of fourth and second in 2000 and 2009 respectively.

Senior fellow at Motu, and one of the authors of the report, Arthur Grimes, said the consistently high level of average wellbeing reflected pronounced ownership levels for both cars and bathrooms.

Dr Grimes said New Zealand fared less favourable for the mean number of bedrooms, at 23rd, which possibly reflected housing pressures in Auckland.

He said the analysis also showed New Zealand's had moderate levels of inequality, higher than Australia, but similar to Canada, the US and Britain.

But Dr Grimes said New Zealand turned out to be one of the more unequal of the developed countries.

"So we were 20th out of 40, but almost all the countries that were less unequal than us ... were developed countries. Most of the countries that were more unequal were undeveloped countries."

Inequality has been a key political battleground since the global financial crisis, from wage growth to housing affordability.

Dr Grimes said there was a moderately-sized group of households that were missing out.

"They don't share in those luxuries. They can't afford the car, the can't afford the dishwasher or have an Internet connection."

Nevertheless durable goods inequality also fell in most countries, including New Zealand, between 2000 and 2012, though though it rose negligibly in this country following the global financial crisis.

Dr Grimes said the results showed New Zealand was still a great place to bring up children, at least in material terms.

"We've had quite a successful growth aspect. We managed to reduce inequality quite a lot between 2000 and 2009."

He said Working for Families was one factor in helping reduce inequality before the global financial crisis.

"It seems to be that it is possible to reduce inequality. We did it in this period 2000 to 2009, and other countries have done it over this period too.

"So we shouldn't take it as given that things will stay unequal."

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