According to Gordon Campbell a recent OECD report showed New Zealand's "...economic policies have caused a significant rise in income inequality" (Hutt News, December 16).
Income inequality grew during the late 1980s and early 1990s then levelled off during the 2000s.
Over that period the structure of families, and gender participation in the work force changed significantly. Single parent families headed by females with no or low educational qualifications and/or work experience increased significantly through to the turn of the century before levelling off over the past few years. Many depend on welfare and consequently form a large share of poor families.
At the same time, partnered woman increasingly either remained working or returned to work earlier after childbirth.
In a nutshell, there are now more households with one work-less parent, and more households with two working parents. The difference between the the incomes of the two households is pronounced.
What the OECD report Campbell refers to said was that, "...active labour market policies, childcare supports and in-work benefits" are needed if increased economic growth is desired. This recognises that children coming out of disadvantaged homes eg unemployed households, need a working parent and better engagement with education from an early age.
The welfare reforms instituted by the National government (and Labour prior with the creation of the In Work Tax Credit) have gone some way to fulfilling this goal but need to go much further. Reducing welfare dependence would contribute enormously to reducing inequality.
Figure J.5 Inequality in New Zealand and the OECD trend: the Gini coefficient