Bolder Government Action Needed to Tackle Inequality

The new government's efforts to tackle poverty in New Zealand are welcome and long overdue, but bolder action is needed to turn the tide on inequality, Peter Malcolm, spokesperson for the income equality project Closing the Gap, said today.

"Closing the Gap is thrilled at the Families Package targeting child poverty, and we're looking forward to a rise in the minimum wage," Mr. Malcolm said.

"But bolder action is needed on excessive salaries, on taxation and support for beneficiaries and low-income earners if we're going to close the inequality gap," he said.

As the Child Poverty Action Group pointed out in its newly released report 'The Further Fraying of the Welfare Safety Net', poverty in New Zealand is now deeply entrenched. The same is true of inequality, Mr. Malcolm said, meaning structural changes are needed.

Just last month, Otago University researcher Dr. Helen Roberts released results of her ongoing study of CEO pay, which shows the gap between CEO salaries and what workers are paid keeps on getting wider.

Total CEO pay rose 114 percent in the 17 years to 2013, while worker income rose only 26 percent. According to Dr. Roberts, CEOs are now paid 30 to 50 times more than the average wage.

The Rail and Maritime Transport Union highlighted the problem last week, pointing to the $955,000 pay packet of Lyttleton Port's CEO at the same time as the union is trying to negotiate a port-wide agreement for its workers.

"It's clear this problem must be tackled at both ends, with much steeper taxes on high salaries, better labour laws to strengthen workers' bargaining power, together with significant wage and benefit increases at the bottom," Mr. Malcolm said.

"We believe this government has both a mandate and a window of opportunity to take bold action," he said. "Let's not forget that income inequality was the top concern of voters before the election. Now that the election is over, it needs to be the top concern of the government."

LINKS/REFERENCES:

Child Poverty Action Group: http://www.cpag.org.nz/resources-2/

Otago University study on CEO pay: http://www.otago.ac.nz/news/news/otago667152.html

http://www.scoop.co.nz/stories/BU1712/S00322/port-workers-union-condemns-bosss-excessive-pay.htm

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