Rich now richer, poor poorer: Goff

"I have been talking to retailers and small business owners and they are finding it tough" -...
"I have been talking to retailers and small business owners and they are finding it tough" - Labour leader Phil Goff
Falling wages and rising prices were expected to lead to a huge spike in vulnerable people not being able to pay their bills later this year, Labour Party leader Phil Goff said yesterday.

Statistics New Zealand figures showed the median income edged lower in the year to June as more people started receiving money from the Government, the self-employed earned less and investment income fell.

The median weekly income for all people from all sources fell between the June 2009 and June 2010 quarters by a "non-significant" 1.7% to $529. That compared with $538 in the June 2009 quarter and $536 in the June 2008 quarter.

Mr Goff said that made a mockery of the Government's tax cuts which were aimed at high-income earners.

"Small business people are struggling. I have been talking to retailers and small business owners and they are finding it tough.

"If working people don't have money in their pockets and are not spending it, their outlook as a business person is depressed."

He met yesterday with social service providers in Dunedin and was told they had double the workload they had at the corresponding time last year.

"They told me of cuts to government funding I wasn't even aware of - cuts to the most vulnerable."

In the Invercargill RSA on Wednesday night, Mr Goff heard first-hand of how the cuts in ACC were affecting the elderly. Those hard of hearing were being forced to pay for their own hearing aids.

"The most vulnerable are much worse off, the middle incomes are slightly worse off and the wealthiest - which includes every person in Cabinet - are highly better off. If you don't earn $75,000, you are worse off in real terms than a year ago."

Statistics New Zealand said that since the June 2009 quarter, the proportion of people receiving wage and salary income slipped from 54.1% to 53.5%.

The proportion of people receiving income from government transfers, such as benefits, rose to 33.8% from 32.6% in the June quarter last year.

Since the June 2009 quarter, the number of people receiving government transfers had risen "significantly" by 54,000, or 4.9%, while over two years, the increase was 88,100, or 8.3%, Statistics New Zealand said.

Mr Goff said National had promised creating jobs and reducing unemployment was a top priority but in the past quarter, unemployment had gone up by 20,000 people.

Economic growth in the June quarter had stalled and contracted in the September quarter and all of that was happening when commodity prices - particularly for dairy, timber, wool and meat products - were close to the highest they had ever been.

Mr Goff warned the economy was "heading downhill" and the Government was doing nothing to help it recover.

"This is not something they can blame the last government for," he said.

Statistics New Zealand said "significant" age group rises in the number of people receiving government transfers since the June 2009 quarter included an increase of 13,100 people in the 15-19 age group, 17,600 in the 20-24 group, and 17,400 in the 65 and over group.

The rises in the 15-19 and 20-24 groups were consistent with the fall in the labour force participation rate and a rise in the unemployment rate for those groups.

For those receiving income from self-employment, median weekly income fell "significantly", down $38 or 6.3% to $575.

For those in the 40-44 age group self-employment median weekly income fell $288 to $479, while the 55-59 group recorded a rise of $153 to $767.

Median weekly income from investments, for those receiving it, fell "significantly" by $3 to $12. In the June 2008 quarter, income from investments had been at its highest recorded level of $19.

Since the June 2009 quarter, the number of people receiving income from investments fell "significantly" by 81,700 people, or 7.2%.

The median weekly household income from all sources was $1236 in the June 2010 quarter, barely changed from $1234 in the June 2009 quarter, and was still below $1257 in the June 2008 quarter.

The average weekly household income from all sources was $1484 in the latest year, also barely changed from $1480 a year earlier.

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