Income Inequality Dimension 

Income equality has been descreasing

Stats NZ  2017

Between 1988 and 2015, income inequality between households with high incomes and those with low incomes widened

  • In 2015, the disposable income of a high-income household was over two-and-a-half times larger than that of a low-income household.
  • Between 1988 and 2015, the income inequality ratio increased from 2.24 to 2.61.
Proportion of the population in households with low incomes has increased

Stats NZ  2017

Since 1988, the proportion of the population in households with low incomes has increased

  • In 2015, the proportion of the population with household disposable incomes below 60 and 50 percent of median income was 18 and 10 percent, respectively.
  • The proportion of the population with low household disposable incomes increased steadily from 1998 to a peak in 2004

Definition and measure

People in households with low incomes may have more difficulty meeting their material and non-material needs and experience economic hardship. Having insufficient economic resources limits people’s ability to participate in and belong to their community and wider society, which restricts their quality of life.

This indicator uses income thresholds to define the proportion of the population with low incomes. Incomes are before housing costs, and after adjusting for household size and composition. The thresholds used are set at 50 and 60 percent of median household disposable income from each Household Economic Survey.

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Money doesn’t buy happiness  but it’s important in achieving high living standards and greater well being

Some Key Findings: Higher economic wealth can also improve access to quality education, health care and housing.

Disposable Income

Household net-adjusted disposable income is the amount of money that a household earns each year after taxes and transfers. It represents the money available to a household for spending on goods or services. In New Zealand, the average household net-adjusted disposable income per capita is 21 773 USD a year, lower than the OECD average of 23 938 USD.

Equity – Disposable Income

Despite a general increase in living standards across OECD countries over the past fifteen years, not all people have benefited from this to the same extent. In New Zealand, the average net adjusted disposable income of the top 20% of the population is an estimated 43 261 USD a year, whereas the bottom 20% live on an estimated 8 481 USD a year.

Household Financial Wealth

Household financial wealth is the total value of a household’s financial worth. In New Zealand, the average household net financial wealth per capita is lower than the OECD average of 42 903 USD. While the ideal measure of household wealth should include non-financial assets (e.g. land and dwellings), such information is currently available for only a small number of OECD countries.