Rich man, poor man: inequality gap grew in 2017, Oxfam report reveals

Sunday, 21 January 2018

Food bank demand is growing, the Salvation Army says.

New Zealand's richest man added more than $4 billion to his coffers last year, as more Kiwis joined queues at food banks.

Internationally and locally, the divide between the haves and the have-nots grew in 2017, according to a new Oxfam report.

But it was also the year a new Government rose to power with promises to attack child poverty head-on.

Released on Monday, the report revealed 28 per cent of all wealth made went to the richest 1 per cent of Kiwis in 2017. The 1.4 million poorest New Zealanders got just 1 per cent of that wealth.

Oxfam NZ's Rachael Le Mesurier says there is no silver bullet to fix the divide but it is achievable.

Trade Minister David Parker says there are things that can be done locally and globally.

* The truth about inequality in New Zealand

* World's rich getting richer, poor are definitely poorer

Wellington Downtown Community Ministry Director Stephanie McIntyre says the poor are getting poorer in real terms.

* 'Unfair' wealth divide hurting middle NZ**

Oxfam New Zealand executive director Rachael Le Mesurier is calling for a fairer tax system – 'by ensuring the wealthy and multi-nationals pay their fair share of tax by cracking down on tax avoidance - then using that money to make our country and the global economy a fairer place'.

New Zealand currently has low unemployment and many of those 1.4 million New Zealanders were in employment and working hard, she said.

While there was no silver bullet to fix the divide, the Government's tax working group was a positive step in the right direction, she said.

'The gap has been growing because of the way property has been growing in exponential wealth.'

Many of the necessary changes were in how multi-nationals operated, but New Zealand could still play its part in addressing that, Le Mesurier said.

That included: requiring multi-nationals to pay a living wage and pay fair tax, and through the New Zealand Government collaborating with other countries.

'[The gap] is extreme. Inequality is not inevitable – the gap can be reduced.'

Most of New Zealand's wealth divide can be explained by the rich getting richer rather than the poor getting poorer. Oxfam has estimated New Zealand's richest man Graeme Hart had increased his wealth in 2017 by $4.26b to $13.05b.

Wellington Downtown Community Ministry director Stephanie McIntyre deals with people who are at the other extreme and in her view: 'The poor are absolutely getting poorer.'

'People are using all their income for the basic necessities of life.'

Basics such as rents and utility bills were going up in cost, leaving less to spend on anything else, she said.

A Salvation Army spokesman said more food parcels were handed out in 2017 than the year before.

'It's all just rising costs of living. It is as much housing and everything else is going up as well.'

Finance Minister Grant Robertson said the Government was already tightening up on multi-nationals paying their fair share.

'There is always more to do here and we want to look closely at international examples,' he said.

Trade Minister David Parker said many of the issues were global but the new Government was tackling what it could.

This included a tax working group, ending foreign buying of existing homes, and Labour's 'best start' programme, which gives $60 a week to those with a new baby for the first year, after paid parental leave ends.

Parker was this week going to an annual meeting of political and business leaders at the World Economic Forum in Switzerland where he would express his concern about the inequality of money going to capital 'rather than people paid for their work in the economy'.

He would also be discussing how to make trade work for developing countries and how decreasing home ownership rates were markers of increasing inequality globally.