Hon Anne Tolley

Minister for Social Development
25 July 2017
Household incomes continuing to rise

Social Development Minister Anne Tolley says MSD’s latest Household Incomes Report shows median household incomes rose three per cent in real terms in the year to June 2016.

“This increase shows the Government’s focus on strengthening the economy is delivering for New Zealand families and households,” Mrs Tolley says.

“Despite the effects of the Global Financial Crisis, most Kiwi households are much better off today than they were back in 2008.

“Since 2008 median household incomes have risen by around 11 per cent more than inflation – faster than in many other OECD countries. This contrasts with Australia, the UK, the US, France, Italy and Germany where real household incomes remain at or close to pre-GFC levels.”

The report shows there is no evidence of any sustained rise or fall in household income inequality over the last two decades, and trends in child poverty and hardship are either flat or falling, depending on the starting point or measure used.

“This is the result of our growing economy creating more jobs and opportunities for people to get ahead, and also the redistributive nature of our tax and transfer system,” Mrs Tolley says.

“Around half of all households with children receive more in welfare benefits and tax credits than they pay in income tax.

“The report also highlights that housing affordability and quality are an issue for lower income groups with housing costs making up a larger proportion of their household budget.

“That’s why the Government’s committed to building more social houses and is working with councils to make more land available for new housing.

“It’s also why we increased the accommodation supplement as part of our $2 billion Family Incomes package in Budget 2017, and why we lifted the incomes of beneficiaries by $25 a week last year – the first real increase in more than 40 years.

“This report doesn’t capture the impact of these benefit increases or the Family Incomes packages, but as data comes through, I’m confident it will show more improvements in the lives of those most in need.

“The expansion of free doctors’ visits and prescriptions to under 13s is a good example of how our targeted investment can make a real difference.

“Virtually none of the families surveyed said they put off doctors’ visits ‘a lot’ for their children, meaning families aren’t making financial trade-offs in getting care for their kids.”

The report also shows that:

• New Zealand continues to rank near the middle of the OECD in terms of income inequality, poverty and material hardship.

• Child material hardship numbers have decreased from the 220,000 peak in the GFC to 135,000 in 2015 and 2016 – that’s a drop from 20 per cent to 12 per cent, using the less severe threshold. The numbers in more severe material hardship are down from 100,000 (nine per cent) in 2011 after the GFC to around 70,000 (six per cent).

• Incomes for minimum wage workers rose by around seven per cent in real terms between 2008 and 2015, however incomes for beneficiaries remained steady.

MSD’s 2017 Incomes Report uses data from StatsNZ Household Economic Survey to monitor trends in disposable household income to June 2016. It is released alongside a companion report of material wellbeing including food, heating, accommodation and transport.

The report is available at: www.msd.govt.nz

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