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Inequality growing fastest in NZ - OECD

Tuesday 6 Dec 2011 9:57 p.m.

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By Laura Frykberg

A new report reveals the average income of New Zealand's richest 10 percent is now 10 times that of the poorest 10 percent.

It's a similar story across the OECD, but New Zealand's income gap has grown faster than any other developed country over the past 20 years.

No matter the weather, New Zealand's Occupy movements are living rough to highlight the growing gap between rich and poor. A new report has gives weight to their cause – that gap among OECD countries is the widest it's been in 30 years.

"It's like 10 people going out for dinner and eating half the dessert and the other nine people eating a little slice each," says Kaye Brereton, Beneficiary Advocate Federation NZ.

"Those nine people are going to be hungry and they're going to be angry."

The OECD report entitled Divided we Stand found the richest 10 percent of New Zealanders earn 10 times that of the poorest 10 percent.

But worse, New Zealand's income gap has grown faster than any other developed nation since the 1980s.

The report says the main reasons for the increasing gap is the highly-skilled benefit more from technological progress than the low-skilled, and the greater inequality in wages and salaries, which it says disproves the theory economic growth trickles down to those in need.

Beneficiary advocates say raising the minimum wage will help bridge the gap and reduce low income earners dependence on the state.

"We're seeing more people who are working poor needing the help of the state as well, and that's about being able to pay for their accommodation, maybe being able to pay for their food and their medication as well," says Ms Brereton.

But the Business Roundtable says comparing the highest earners with the lowest won't solve the problem of inequality.

"It is much better that we focus on what we're doing that are holding people at the bottom back so that they all become wealthier than it is that we've got something wrong because we've got so many people who are doing well," says Bryce Wilkinson.

Mr Wilkinson says the large portion of New Zealanders without enough education to earn a decent income needs to be tackled, something the report also suggests as a way of closing the income gap.

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