Media release: Housing crisis the root of inequality

18 October, 2016

Wellington (18 October 2016): New Zealand’s inequality crisis is actually a housing crisis, a new report by The New Zealand Initiative says.

Launched today, ‘The Inequality Paradox: Why inequality matters even though it has barely changed’ finds that too many New Zealanders are suffering real hardship, and this is largely due to very high housing costs.

“Inequality is a very real issue and we seem to be missing the point in New Zealand,” says Dr Oliver Hartwich, Executive Director. “Imported narratives from overseas about ever-increasing income inequality and CEO salaries are not the issue here. New Zealand’s real issues with inequality are being driven by housing.

“Rising house prices have made homeowners richer while those in poorer socioeconomic groups are having to pay an increasing share of their income on housing. This is causing real hardship for too many New Zealanders.”

 “We feel strongly that a modern society and affordable housing do not have to be mutually exclusive, as long as the Government is willing to act,” says Hartwich.

“Report authors Dr Bryce Wilkinson and Jenesa Jeram have done a great job diagnosing New Zealand’s inequality paradox. They have found that undue attention and resources have been placed on income inequality, which has distracted us from the real issue.”

The report finds that income inequality and consumption inequality have remained broadly unchanged for the past 20 years. But housing costs worsen measured inequality.

The Inequality Paradox is the second of three reports. The first was Poorly Understood: The state of poverty in New Zealand.  

It argued that issues of hardship were more important than issues of inequality, or low relative income. The third report will be released in 2017 and will examine welfare policy issues.

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The authors and Dr Oliver Hartwich are available for comment.

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