New data from Statistics New Zealand shows household incomes and other key measures were on the rise before the country went into lockdown.
Journalist and researcher Max Rashbrooke explained to Jesse Mulligan that, on the surface, the numbers are positive, but after looking more closely, the improvements are not evenly distributed across households.
Max Rashbrooke Photo: supplied
There’s one bit of good news and two bits of bad news, he says.
“The good news is that pre-lockdown incomes were rising across the board at about 3.9 percent.
“The bad news is that those increases weren’t evenly distributed. So, incomes rose much more quickly for middle New Zealanders than they did for the poorest New Zealanders even though those are the people who most desperately need greater incomes.”
Housing costs continue to be a huge problem, he says.
“One in Six New Zealanders is paying more than 40 percent of their income in housing costs. And that is obviously unsustainable in the long run.”
This data reflects pre-lockdown picture, post lockdown the situation is likely worse, Rashbrooke says.
“House prices are almost out of control and we are seeing very large numbers of people post lockdown having to access food parcels and more people on benefits.”
Inequality has however declined slightly, he says.
“Incomes increased a little bit for the poorest, but not much, they increased quite a lot for people in the middle and they didn’t increase so much for people in the upper half of New Zealand.”
Housing is a particular contributor to poverty for the poorest 10 percent of New Zealand, he says.
“When you look at the poorest New Zealanders one third of them are over that threshold of paying more than 40 percent of their income in housing costs, whereas for the richest 10 percent, only 3 percent are paying more than 40 percent of their income on housing costs.
“So again, really huge disparities in a supposedly egalitarian country.”
The situation poses serious challenges for the government, he says.
“It’s been clear for a very long time that this government is governing for the centre, this is part of Jacinda Ardern and Grant Robertson’s natural caution.
“So, it’s no surprise in a way that they are making sure that they are looking after the middle.”
But the prime minister has also invested lot of political capital on reducing child poverty, he says.
“A lot of those child poverty targets are what are called relative measures, when you look at the poorest how far are they falling behind, not some absolute measure, but people in the middle.
“So, it gets really hard for the prime minister to meet those targets if incomes are increasing more quickly for middle New Zealanders than they are for the poorest.”
Today’s data suggests she will struggle to make good on her pledges, he says.
“It does risk, I think, some quite serious political embarrassment on that front.
“I think the government knows exactly what can be done, the problem is it faces some real constraints and some self-imposed political restraints.
“Action on housing is crucial, things like RMA reform will take years to have any affect.
“One of the things that would make a huge difference to households is, firstly, big increases to wages and secondly big increases to benefits.”
The prime minister was told two years ago by the Welfare Expert Advisory Group that she needed to raise benefits by 40 percent to make a real dent in poverty levels. He says.
“And so far, the increases in benefits have been pretty minimal.”
