Tax more: Oxfam calls for wealth tax to tackle growing inequality

Sunday, 20 January 2019

New Zealand's two richest people added $1.1 billion to their fortunes in a year when the poor just got poorer.

Oxfam research, published on Monday, has painted a damning picture of New Zealand's growing wealth divide.

Oxfam NZ's Rachael Le Mesurier is calling for a wealth tax.

The Public Good or Private Wealth? report found that in the 2017 to 2018 year, the richest five per cent of New Zealanders collectively had more wealth than the bottom 90 per cent.

That means 239,700 of us have more combined wealth than 4.3 million of us.

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

Rich-lister Graeme Hart increased his wealth in the 2017 to 2018 year.

* 'Unfair' wealth divide hurting middle NZ**

The two richest New Zealanders, Graeme Hart and Richard Chandler, were worth $15b and $3.1b respectively. Between them, they added $1.1b to their wealth in the year.

Richard Chandler was another rich-lister who got richer.

The poorest half of New Zealand – about 2.4 million people – became collectively $1.3b poorer in that same year.

'We have a long way to go before we can say that every Kiwi is getting a fair go,' Oxfam NZ executive director Rachael Le Mesurier said.

'We know inequality is harmful for us all. It perpetuates poverty, erodes trust, fuels crime, makes us unhappy, negates economic growth, and robs opportunity from the poorest – including shortening their lives.'

Oxfam called for more tax on wealth to tackle the problem.

'When big business and the super-rich don't pay their fair share of tax, the rest of us pay the price – with kids without teachers, long waiting lists for health interventions, and not enough police in our communities,' she said.

It hoped the Tax Working Group's final report, coming out early in 2019, would recommend greater wealth taxes and more transparency.

A spokesperson for Prime Minister Jacinda Ardern said the purpose of the working group was to ensure the tax system was fit for purpose. The government would consider it once it was received.

An increase in income tax, GST, inheritance tax, changes to the taxation of the family home or the land under it and the adequacy of the personal tax system and its interaction with the transfer system were outside the scope of the review.

The government was working hard to reduce poverty and inequality, having introduced a number of measures to lift incomes and living standards, such as the Families Package which lifted the incomes of more than 384,000 families by $75 a week, and a winter energy payment.

The spokesperson also noted the unemployment rate had dropped to 3.9 per cent and nearly $1b had been contributed to the NZ Super Fund.

They hoped to lower New Zealand's child poverty rates to some of the lowest in the world.

But National's finance spokeswoman Amy Adams said the findings of the Oxfam report were not surprising.

'The Government's poor policy decisions were hurting New Zealanders,' she said, and wages were not keeping up with the cost of living.

Adams pointed out rents had increased $30 a week and the number of people on benefits had increased.

A National government would keep taxes low to ensure New Zealanders kept more of what they earned, she said.

Wellington's Downtown Community Ministry director Stephanie McIntyre confirmed poverty was going up and she was increasingly seeing people spending nearly all their money on the basics such as rent, utility bills, and a mobile phone – a necessity when job hunting. The 'skerrick' left was for food.

Many of those costs were increasing with the government unable to control costs of necessities such as power or public transport.

She believed the Labour-led government was doing all it could and had come up with some tangible ways to help, such as helping beneficiaries with power bills through winter.

'This is a really big waka that you don't turn around in the space of a year, because this has been a long time coming,' she said.