8 Sep 2016

No material increase in income inequality - report

5:39 pm on 8 September 2016

The latest report on income and poverty shows New Zealand's economy is on the right track, Economic Development Minister Steven Joyce says.

The report from the Ministry of Social Development looks at how New Zealand households are faring.

It said there was no material increase in income inequality, and that incomes had risen about 12 percent since 2011.

But it also showed New Zealanders in the bottom 10 percent of income earners were now spending more than half of their income on housing.

Labour said this showed the housing crisis was having a huge impact on low-income New Zealanders.

However, Mr Joyce said the report painted a positive picture.

"What it shows is that we're seeing rising incomes and if anything slightly higher increases for low-income households, which is good.

"The report shows there's been no increase in child poverty, in fact there's a sign it might be heading the other way which is also positive."

He said people had been spending a big chunk of their income on housing since the early 2000s.

"And if you go and look at the graphs it's a problem that's exacerbated over that period, so the focus on building more houses, encouraging more housing supply is the right focus and that's why we have a comprehensive plan that's delivering that."

29062016 Photo RNZ / Rebekah Parsons-King. Grant Robertson

Labour Party finance spokesperson Grant Robertson Photo: RNZ / Rebekah Parsons-King

However, Labour Party finance spokesperson Grant Robertson said that finding was an indictment on the government.

"The housing crisis is having a huge impact on income inequality on the lowest income New Zealanders."

He said the cost of housing was causing huge stress for a large number of families, and incomes needed to rise more quickly.

"The incomes of the top 10 percent of New Zealanders are now nearly ten times of the bottom 10 percent of New Zealanders - that's actually a record, it's never been that high and it shows that the share of prosperity at the moment is overwhelmingly going to those at the top."

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