Media release: Incomes report demonstrates housing crisis
The Ministry of Social Development’s (MSD) Household Incomesreport demonstrates the critical importance of solving New Zealand’s housing shortage.
The MSD’s report demonstrates that real incomes have increased in New Zealand, and that this increase in real incomes is broadly shared across different parts of the income distribution. Since 1993, income growth for those at the twentieth percentile has been identical to income growth at the middle, and income growth at the ninetieth percentile.
The report also contrasts New Zealand’s performance with that in the United States, where real median household incomes are lower than they were in 2000, and with the performance in the UK, where middle incomes have not grown has strongly since the Great Financial Crisis.
“The data clearly shows that New Zealand families are sharing broadly in increased real income. Where we have a real problem, though is in housing costs,” says Dr Eric Crampton, Chief Economist at The New Zealand Initiative.
The report shows that income inequality, measured after housing costs, is higher than income inequality before housing costs. It demonstrates the rise in housing costs has especially been borne by lower income households.
“Child poverty rates are declining. But even there housing costs matter substantially: the proportion of children in low-income households is about three times higher when measured after housing costs than when it is measured before housing costs.”
The Initiative’s 2016 report, The Inequality Paradox: Why Inequality Matters Even Though It Has Barely Changed, summarised that myths about inequality and the misperceptions in the public debate need to be challenged.
“Inequality in incomes has been flat for decades. The housing crisis has caused real inequities, and real inequalities in lived experience, and real hardship. Trying to solve a housing problem by focusing on income levels simply will not work.”
Housing and economic growth are core research topics for The New Zealand Initiative, and further research in these areas will be undertaken in our upcoming 2017-2020 research programme.
The Inequality Paradox: Why Inequality Matters Even Though It Has Barely Changed.
Poorly Understood: The State of Poverty in New Zealand.
The New Zealand Initiative’s housing research.
The New Zealand Initiative’s 2017-2020 Research Plan.
ENDS
Dr Eric Crampton is available for comment. To arrange an interview, please contact:
Media contact
Simone White, Communications Officer
The New Zealand Initiative
Phone: +64 4 494 9109
Mobile: +64 21 2937 250
Email: simone.white@nzinitiative.org.nz