Income gap growing - poll

Forty four per cent of the 750 New Zealanders surveyed this month said the gap between the rich and poor had got a lot bigger over the past six years. Photo / Chris Gorman

Nearly three-quarters of New Zealanders believe the gap between rich and poor has increased under six years of National Government and almost two-thirds feel they are no better off or have gone backwards, a Herald-DigiPoll survey suggests.

Forty four per cent of the 750 New Zealanders surveyed this month said the gap between the rich and poor had got a lot bigger over the past six years.

A further 30 per cent said it had got a little bigger. Just over 22 per cent said it was about the same, and only 3 per cent believed the gap had closed.

One-third of those surveyed felt they were now better off financially since National became the Government, 30 per cent said they were about the same and virtually the same number said they were worse off. Eight per cent were unsure or didn't know.

Labour leader David Cunliffe said people "really know in their heart of hearts that gap has widened too far".

"It's borne out in all the data and there's no hiding it and it's a terrible thing for New Zealand. It undermines the New Zealand way of life, New Zealanders know it and they're not going to vote for more of it."

"That's why things like a capital gains tax and a lift in the top marginal tax rate will provide resources that can be given to give a hand up to the more vulnerable and help close up some of those gaps."

Through a spokesman, Deputy Prime Minister Bill English said the fact the poll showed most New Zealanders felt better off or the same about their situation "is encouraging given they have been through a large recession and the global financial crisis in the past six years".

But the fact that three-quarters believed the wealth gap was widening showed "they are concerned that others may not be doing so well - despite the best available data showing no evidence of rising income inequality over the past decade".

While it increased in the late 1980s and early 1990s, and decreased between 2004 and 2007 because of Working for Families, income inequality has gone up and down in official measures since aftermath of the global financial crisis and there is no clear trend higher or lower.

But Labour Party finance spokesman David Parker said income inequality in New Zealand remained above the OECD average, "and we know that the income measure of inequality excludes capital gains, which are unusually untaxed in New Zealand".

"The entrenched inequality that comes from long-term income inequality gets worse every year and you see that in falling home ownership rates."

Mr English said that while "a number of families are still finding their situation challenging, on average wages are rising a bit faster than the cost of living, interest rates remain not far off 50-year lows, the Government is ensuring more houses are being built and we're investing billions of dollars to support vulnerable families.

"The best way to help low-income New Zealanders is through a growing economy that supports more jobs and higher incomes."