NZ's rich and poor gap growing fast: OECD

The gap between New Zealand's rich and poor is growing faster than any other developed nation, a new OECD report shows.

The report, called Divided We Stand, charts the widening gap between the top 10 percent wealthiest residents and the poorest 10 percent.

The richest Kiwis now claim an income 10 times that of the poorest residents.

This is considerably less than the huge margin seen in the worst countries Brazil, Russia, China and India where the wealthy earn 50 times more, but New Zealand won the dubious honour of the gap widening the fastest.

On an inequality index called the Gini coefficient, where zero means everybody has the same income and one means the richest person has all the income, New Zealand scored 0.33.

This is up six percentage points from 1985, when it scored 0.27, constituting the biggest jump of any OECD country.

Launching the report in Paris, OECD Secretary-general Angel Gurria said the findings confirm that the poor are unable to profit from economic growth benefits that find their way in the bank accounts of the rich.

He said the main driver behind the rising gaps was greater wage and salary inequality, as the high-skilled have benefited more from technological progress than the low-skilled.

Social service systems have generally become less effective at redistributing income since the mid-1990s, Mr Gurria said.

On top of that, many countries have cut their top tax rates for high-earners.

"There is nothing inevitable about high and growing inequalities," Mr Gurria said at the launch.

"Our report clearly indicates that upskilling of the workforce is by far the most powerful instrument to counter rising income inequality.

"The investment in people must begin in early childhood and be followed through into formal education and work."

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