Days to the General Election: 35
See Party Policies here. Party Lists here.

We extract the New Zealand components from the latest OECD review of income inequality and benchmark them against the usual suspects

We extract the New Zealand components from the latest OECD review of income inequality and benchmark them against the usual suspects

In its latest update on income inequality, the OECD has noted that the economic recovery underway has only led to gradual improvements in labour markets and household incomes.

And it says the recovery has not yet delivered inclusive growth, nor has it reveresed the trend towards increasing income inequality.

Although they did not single out New Zealand for any special mention in their analysis, New Zealand is included in their data summaries.

And in Panel B, New Zealand stands out as one of the few countries that between 2010 and 2014 where those on the bottom 10% of incomes made significant gains in the period (more than +10%) while those on the top 10% only gained a quarter of that (see page 2).

The Report allows us to benchmark New Zealand results against the usual countries we like to measure ourselves against. Here are three such benchmarks:


Gini coefficient

The Gini coefficient (sometimes expressed as a Gini ratio or a normalised Gini index) is a measure of statistical dispersion intended to represent the income distribution of a nation's residents, and is the most commonly used measure of inequality.

You read this data where 1 = "one person has all the income" and 0 = "everyone has the same income". So a lower score indicates a more equal distribution.

Gini coefficient 2007 2012 2014 2007-2014
Australia 0.338 0.326 0.337 -0.001
Canada 0.318 0.321 0.322 +0.004
Germany 0.285 0.289 0.292 +0.007
Ireland 0.305 0.304 0.309 +0.004
Netherlands 0.298 0.280 0.283 -0.015
New Zealand 0.330 0.323 0.333 +0.003
Norway 0.250 0.253 0.252 +0.002
Sweden 0.259 0.274 0.281 +0.022
UK 0.373 0.351 0.358 -0.015
USA 0.374 0.396 0.394 +0.020
OECD average 0.317 0.316 0.318 -0.001


Disposable income adjusted for household size

The S80/S20 income share ratio refers to the ratio of average income of the top 20% to the average incoem of the bottom 20% of the income distribution. Lower is better.

S80/S20 income share ratio 2007 2012 2014 2007-2014
  % % %  
Australia 5.8 5.5 5.7 -0.1
Canada 5.3 5.4 5.5 +0.2
Germany 4.3 4.3 4.4 +0.1
Ireland 4.7 4.7 4.8 +0.1
Netherlands 4.4 4.2 4.3 -0.1
New Zealand 5.3 5.3 5.3 0.0
Norway 3.7 3.8 3.8 +0.1
Sweden 3.9 4.1 4.2 +0.3
UK 6.6 5.9 6.0 -0.6
USA 7.9 8.6 8.7 +0.8
OECD average 5.4 5.5 5.5 +0.1


Poverty measures

The poverty threshhold is 50% of median disposble income for each country. In this table, lower is better.

The working poor are those with income below the poverty line, living in households with a working aged head and at least one worker.

Poverty rate 2007 2012 2014 2007-2014
Working poor 
  % % % % %
Australia 14.9 14.0 12.8 -2.1 4.8
Canada 12.2 12.8 12.6 +0.4 9.8
Germany 9.0 8.4 9.1 +0.1 3.5
Ireland 9.6 8.4 8.9 -0.7 4.3
Netherlands 6.6 7.9 8.4 +1.8 6.9
New Zealand 11.0 9.8 9.9 -1.1 4.7
Norway 7.8 8.1 7.8 +0.0 6.2
Sweden 8.4 9.0 8.8 +0.4 5.7
UK 12.8 10.5 10.4 -2.4 5.8
USA 17.4 17.2 17.5 +0.1 11.5
OECD average 5.4 5.5 5.5 +0.1 8.3

The full OECD Report is here.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.


Now you see you don't?.

Right. There was no problem with it, except it wasn't remotely relevant to this article.

Whatever our Prime Minister does, affects all New Zealand's finances in so many different ways. Particularly the Governments coffers.

His name is Mr Key.

My comment was that not every one thinks like he does.

That includes the program I was referring to. He had no answers, only the usual platitudes and waffles.

I do not buy them, I never did.

We should be in a much better situation financially, there is nothing wrong in stating that, it is common knowledge.

It affects our standing in those Charts.

The thinking does affect our Finance and what outcomes are created from it.

If we all thought the same. I would be as poor as a Church Mouse, unlike those heavily in debt. That includes our Government. Or am I wrong.?

Was 'The Nation" also wrong.

I do not try to promote his agenda, I know why Mr Key and his cohorts think the way they do, however.

That my version of the truth, does not gel with yours, is why we have issues, that I have to work around.

The Nation program can be seen by all New Zealand people but not my comment on what was said.

If you want me to spell it out more reasonably please say so and how I must think in future.

How is income from capital gains treated in this survey?
It occurs to me that, being one of a very few countries that don't regard or tax capital gains as income, our income inequality statistics are heavily distorted and not for the better. The effect can be seen in our share of wealth with 10% of the population owning 52% of assets and the top 5% with almost 40%. Half of us own 5% of assets which suggests that the income distribution statistics are suspect and that we are a far less equal society than we like to believe.

Be interested in an article on this topic from you David.

Not 100% sure I support the claim for this type of accounting, but the future liabilities should still be stated in some way. I guess the real question is if there is an intent to obfuscate.

That's a joke site, right? Is there documentation and evidence from a source that's less crazy?

Crank site for sure, but that doesn't mean the allegation is incorrect.

Your access to our unique content is free - always has been. But ad revenues are under pressure so we need your direct support.

Become a supporter

Thanks, I'm already a supporter.

Days to the General Election: 35
See Party Policies here. Party Lists here.