A new report shows New Zealand’s economy has been most affected by inequality out of all the OECD nations. How did the land of the fair go end up in such a state?
In the 1940s, New Zealanders hated inequality so much that one visiting academic suggested they should erect a statue of equality in Auckland harbour, as a counterpart to the United States’s celebrated sculpture. And that image lingers: many people still think of New Zealand as an egalitarian paradise, a friendly and accommodating country where “a fair go” is the national phrase.
Those observers, and indeed many New Zealanders, might have got a shock this week when the OECD published a landmark report, showing that economies the world over are being hamstrung by growing inequality – and that New Zealand was the worst affected. A stark rich-poor divide, the OECD argued, had taken over a third off the country’s economic growth rate in the last 20 years. But how could this be?
The simple answer is that in the two decades from 1985 onwards, New Zealand had the biggest increase in income gaps of any developed country. Incomes for the richest Kiwis doubled, while those of the poorest stagnated. Middle income earners didn’t do too well, either.