What the government can do

Set a target to reduce inequality and make a plan to get there

The government could aim to reduce the gap between the highest 10% and lowest 10% of incomes from 9:1 to a 5:1 ratio. This is the level that other more equal countries achieve now (and is the level it was in early 1980s).

Three ways to reduce inequality

Lift wages for those on the lower incomes by raising the minimum wage and investing in providing jobs that pay higher wages (e.g. a living wage).

Raise welfare benefits to a level above recognised poverty lines for those who do not have jobs (the unemployed, disabled, sick, caring for children, older or disabled family).

A fairer tax system that could include wealth taxes (e.g. capital gains tax) and a financial transaction tax as well as a high income tax band.

10 good ideas to reduce inequality

  1. Universal Child Allowance: $60 per child each week would lift most children out of the worst of poverty.
  2. Raise welfare benefits to the same level as NZ Super: This would eliminate the worst of poverty for all those who cannot work, just as it already does for those aged over 65.
  3. Raise the minimum wage above $16 per hour: The current minimum wage is too low and leaves many hard working people in poverty.
  4. More affordable rental housing: income-related rents make the different between poverty and getting by for thousands of social housing tenants.
  5. Adopt a living wage: firms and government choosing to pay all their employees above the Living Wage rate of $18.80 per hour.
  6. Financial transactions tax
  7. High Pay ratio of 8:1
  8. High income tax bracket: starting at $150,000 income
  9. Capital Gains tax
  10. Wealth Taxes: inheritance and death taxes