NZ Rich – Poor Gap, Not What It Seems

It seems that the OECD has been somewhat mischievous in its reporting of the gap between the rich and poor in New Zealand. One can only wonder why it has reported its “findings” in such a dramatic fashion. Why has it only told part of the story?

Tony Alexander, chief economist BNZ, has looked closely at the OECD data it used to claim that New Zealand has the fastest growing gap between rich and poor in the developed world. Alexander reports in his weekly overview that the gap was accelerating between 1986 and 2000, but since then the gap has continued to close.

So for the last ten years, while in other OECD countries the gap has continued to increase, the gap between rich and poor in New Zealand has been closing. A good thing. A fact not reported by the OECD.

Tony Alexander attributes the closing of the gap to the reforms of the mid eighties finally reaching their full economic effect in the mid nineties.

While some people might find his opinion galling, the fact remains that in New Zealand the trend is to closing the gap between rich and poor.

An increasing gap between rich and poor gives rise to social discontentment and resentment. Perception can become reality in people’s minds and that is why I accuse the OECD of being mischievous and biased in its reporting.

I would go further and suggest that the misleading claim by the OECD is dangerous to New Zealand’s social cohesion and that much of the damage has already been done and is difficult to undo. Peoples’ first impressions and perception are often lasting and difficult to refute, a behaviour well known to advertisers, marketers and those in PR.

Nonetheless, the gap between rich and poor in NZ is much higher in 2010 than in 1986, and there are too many people who, for whatever reason, are unable to feed and house themselves adequately … The gap needs to close, and close more quickly.

The OECD statistics are available on

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