The Future is Equal

Archives for June 15, 2014

Richest 10% of Kiwis control more wealth than remaining 90%

The richest ten per cent of New Zealanders are wealthier than the rest of the population combined as the gap between rich and poor continues to widen.

Oxfam New Zealand’s Executive Director Rachael Le Mesurier said the numbers are a staggering illustration that the wealth gap in New Zealand is stark and mirrors a global trend that needs to be addressed by governments in New Zealand, and around the world, in order to win the fight against poverty.

“Extreme wealth inequality is deeply worrying. Our nation is becoming more divided, with an elite who are seeing their bank balances go up, whilst hundreds of thousands of New Zealanders struggle to make ends meet,” said Le Mesurier.

Figures for the top one per cent are even more striking. According to the most recent data, taken from the 2013 Credit Suisse Global Wealth Databook, 44,000 Kiwis – who could comfortably fit into Eden Park with thousands of empty seats to spare – hold more wealth than three million New Zealanders. Put differently, this lists the share of wealth owned by the top one per cent of Kiwis as 25.1 per cent, meaning they control more than the bottom 70 per cent of the population.

New Zealand’s wealthiest individual, Graeme Hart, is ranked number 200 on the Forbes list of the world’s billionaires, with US$7 billion. That makes his net worth more than the bottom 30 per cent of New Zealanders, or 1.3 million people.

The news comes ahead of the G20 meeting of Deputy Finance Ministers and Central Bank Governors in Melbourne this weekend, which New Zealand will join at the invitation of Australia, the chair for 2014. Last year the G20 countries endorsed a plan to crack down on multinational corporate tax dodging by taking, “the necessary individual and collective action.”

Le Mesurier said, “Our government says it is significant New Zealand has access to these meetings and praised the G20 as a key vehicle for tackling the world’s economic challenges. Have we taken the necessary individual steps to stop corporate tax dodging in our country and are we well-placed to contribute to this urgent collective action in Melbourne? It’s a fair question.”

In January Oxfam released a landmark report showing half of the world’s population – 3.5 billion – own the same wealth as the 85 richest people. By March the number dropped to only 66 people. Oxfam’s report warned that inequality is creating a vicious circle where wealth concentrated in the hands of a few is used to buy political influence and rig the rules in favour of a small elite. This year US President Barack Obama, the World Economic Forum, the OECD, the Pope, and the heads of the IMF, the World Bank and the UN have all called for action to address inequality, recognising it as bad for growth and the driver of serious social ills.

Child poverty is emerging as a major New Zealand election issue. A new book by Jonathan Boston and Simon Chapple, Child Poverty in New Zealand, explores the nature of the problem and the solutions, while all political parties are touting their strategies for reducing it.

“Extreme inequality is a sign of economic failure. New Zealand can and must do better. It’s time for our leaders to move past the rhetoric,” said Le Mesurier.

“By concentrating wealth and power in the hands of the few, inequality robs the poorest people of the support they need to improve their lives, and means that their voices go unheard. If the global community fails to curb widening inequality, we can expect more economic and social problems.”