NZ pays highest price for inequality
New Zealand has been singled out as the country whose economic growth has been most badly affected by income inequality in a major OECD report just released.
New Zealand had the developed world’s biggest increase in inequality from the mid-1980s to the mid-2000s. The report shows that the economy would have grown by much more if income gaps had stayed at their mid-1980s levels. We would have had 45% growth in that time instead of 30% that actually happened.
You can see how this impacts on a household like your by checking out our Inequality Calculator, that shows how much high inequality has cost your household.
Max Rashbrooke, editor of Inequality: A New Zealand Crisis, points out that ‘By arguing that increased inequality harms growth rather than promoting it, the OECD has removed one of the last remaining arguments for not taking inequality seriously.
‘The OECD recommendations, which include increased taxes and benefits alongside more spending on education, are also a watershed. Redistribution, if done well, is good for economic growth, the report argues.
‘Given the growing evidence of the damage that inequality does, New Zealand has to confront the issue head on.’