The gap between New Zealand's rich and poor is growing faster than any other developed nation, a new OECD report shows.
The
report, called Divided We Stand, charts the widening gap between the
top 10 per cent wealthiest residents and the poorest 10 per cent.
The richest Kiwis now claim an income 10 times that of the poorest residents.
This
is considerably less than the huge margin seen in the worst countries
Brazil, Russia, China and India where the wealthy earn 50 times more,
but New Zealand won the dubious honour of the gap widening the fastest.
On
an inequality index called the Gini coefficient, where zero means
everybody has the same income and one means the richest person has all
the income, New Zealand scored 0.33.
This is up six percentage points from 1985, when it scored 0.27, constituting the biggest jump of any OECD country.
Launching
the report in Paris, OECD Secretary-General Angel Gurria said the
findings confirm that the poor are unable to profit from economic growth
benefits that find their way in the bank accounts of the rich.
He
said the main driver behind the rising gaps was greater wage and salary
inequality, as the high-skilled have benefited more from technological
progress than the low-skilled.
Social service systems have generally become less effective at redistributing income since the mid-1990s, Mr Gurria said.
On top of that, many countries have cut their top tax rates for high-earners.
"There is nothing inevitable about high and growing inequalities," Mr Gurria said at the launch.
"Our
report clearly indicates that upskilling of the workforce is by far the
most powerful instrument to counter rising income inequality.
"The investment in people must begin in early childhood and be followed through into formal education and work."