A Tale of Two Cities: Auckland's poorer regions struggle to keep up

Like it or not, Auckland is the engine room of New Zealand's economy; one third of the population generates 40 percent of the country’s economic output.

In fact, Auckland's top five areas that are home to businesses generate more gross domestic product (GDP) than our four other major cities added together.

But beneath the headline numbers is a growing unfairness.

In our first of three reports in collaboration with Stuff journalist Carmen Parahi, Newshub reports on what’s being called the worst inequality since World War II.

  • To read the full collaboration between Newshub and Stuff A Tale of Two Cities click here.

On the face of it, Auckland's numbers are great. Growing at 3.4 percent a year it's now a $100 billion economy. There's more jobs and 40,000 new residents to fill them every year.

A Tale of Two Cities: Auckland's poorer regions struggle to keep up

There is a lot of economic activity, but who is really benefiting?

The Prosperity Index is a major work by Auckland Tourism, Events and Economic Development (ATEED) and Infometrics. It aims to measure just how well everyone is doing.

And doing well are these five local area boards clustered around the CBD, north and east. They are: Albert-Eden, Devonport-Takapuna, Orakei, Upper Harbour and Waitemata.

Another six out east and north are doing okay: Hibiscus and Bays, Howick, Kaipatiki, Puketapapa, Henderson-Massey and Whau.  

At the other end, however, is south Auckland - our least well-off region. This gap between rich and poor in Auckland has been described as the new urban crisis.

In part one of this report, we look at the two least prosperous boards, where there are plenty of jobs but not a lot of money.

Mary Moeke.
Mary Moeke. Photo credit: Newshub.

Working poor is not a nice tag, but Mary Moeke is living it. She has a state house with her three children under eight, and almost everything in it is donated.

Ms Moeke has a job as an early childhood lecturer at the Manukau Institute of Technology, and she is also a PhD student.

"The reality is for us middle class Māoris is, we do struggle because of the benefits and subsidies we are not entitled to," Ms Moeke said.

"I don't think it's fair. In all honesty, I have experienced the unfairness - and it hurts."

The state house is a step up. Last month, Ms Moeke and her three kids were living in her van. There was a marriage break-up, as well as a dispute over the sale of a family home.

Ms Moeke says she applied for more than 30 rentals but was declined every time.

"I had tried my best but I felt myself shutting down, and when you come to that point it can be very hard - especially if you don’t know where to next, and you don't have those networks and contacts."

Auckland may have been booming, but it hasn't flowed through to everyone.

To understand the inequality faced by residents such as Ms Moeke, ATEED developed the Prosperity Index. It ranks areas on six key criteria and south Auckland dominates the wrong end of the scorecard.

Patrick McVeigh is the general manager economic growth at ATEED. He says the benefits of the growth Auckland has seen are not trickling down - and that is a concern.

Yet ATEED's Prosperity Index shows that when it comes to business growth each year, Mangere (5 percent) and  Otara (6.8 percent) are oustripping most of Auckland.

But the money doesn't stay local. Average household incomes for those suburbs are at the bottom of the scale. Auckland’s average is $76,500, Otara's is $60,800 and Mangere $59,900.

Lotu Fuli, chair of the Otara/Papatoetoe local board, said the economic disparity between areas of the city are the worst she has ever seen.

"We are not getting the same benefits that Auckland is getting from this rockstar economy that we have heard about," she said.

Te Puia Marae has been dealing with the consequences, and helps whanau to get back on their feet. For them, the prosperity gap is not news.

Whitiao Paul.
Whitiao Paul. Photo credit: Newshub.

Whitiao Paul, a social worker at the marae, said the situation was not new, and that not much had changed.

"If we are talking about south Auckland or we are talking about west Auckland or pockets of central Auckland, the jobs that our people are getting aren't paying a lot of money," he explained.

Auckland-wide Ministry of Social Development figures show hardship grants for food have risen by $3m ($10.4m to $13.5m) and accommodation-related grants up $7m ($17.9m to $25.3), while emergency housing costs for short stays in motels has rocketed from $0 to $21m in two years.

The Ministry of Social Development says that emergency housing demand is decreasing now as more transitional homes are found, and the Government has just pledged $100m over four years to help with homelessness.

That means less people in their cars this winter, but it's a temporary fix - like Ms Moeke's state house. Te Puia Marae helped her find it, and she is grateful but fearful.

"I am afraid of the future for my children, because I don't see prosperity happening - and I am doubting whether it will happen in the next 10 years if we go the way we are going," she said.

Which means that economic trickle-down will leave even more Aucklanders thirsting for prosperity.