web analytics

Gini: A Measure of Inequality

Written By: - Date published: 10:30 am, February 25th, 2014 - 14 comments
Categories: Economy, tax - Tags: , ,

In my previous post “UBI: Addressing Inequality” on how a UBI would address inequality,  it turns out I figured out something that is already known as a measure of inequality called the Gini coefficient and the Lorenz curve.

A lower Gini coefficient is better and represents a more equal society. It is a recognised way of measuring and comparing inequality between countries, changes in equality overtime and for the effects of taxation proposals.

Below is the graph for NZ over time.

Gini Coefficient2

Source Child Poverty Monitor: Technical Report.

The graph speaks for itself but to state the obvious, successive governments in the last 35 years have not done much to shift inequality since rogernomics and the 1987 crash which raised it dramatically. Boy was that ever a hand out to the wealthy. It helps explain why there is such a feeling amongst older people that society was fairer in the past.

There is no reason to think it is OK to have a coefficient of above 30? Surely we’d want to reduce this? Perhaps NZ should target a Gini coefficient of for example around 25 and tax and adjust social and economic policy to achieve that level. This is just as valid measure of a country’s performance as GDP or any other measure and infinitely more preferable for society than many of the obscure measures currently used. We currently control for inflation so there is no reason not to control for inequality. The effects of controlling for this would be numerous but maybe incomes would adjust to being fairer as it would be known that ridiculously high incomes would simply be redistributed via tax more fairly.  Fiddling with the OCR clearly only goes so far in managing the economy.

I’d suggest that governments performance in addressing inequality can be measured thus. I’d expect the next government to make a significant shift in this before I believe they are interested in address inequality. Clearly the last labour government failed to address inequality and nor has the current government. If a left government wants to have power in NZ and genuinely wants to fix the 1980’s shafting of NZ society they better do something about it.

The debate is carried on here

Other links

Parliamentary research paper 2011: Household Incomes, Inequality and Poverty

A report that is worth a read as it frames the debate in NZ in this MSD report.

Gini Coefficient

In it they seem to imply that the OECD average is an acceptable level. Comparatively to US, UK and Australia we have a more equal society. Why anyone thinks we are like those countries in the 21st century or want to be like them is beyond me. Targeting the OECD average is hardly aspirational for NZ society.

The rising inequality levels are unacceptable in a civilised country for a whole lot of reasons. The greater the measure (like the Gini coefficient) of the equality of a society  the greater the level of civilisation. NZ can lead the world in civilisation as opposed to descending into the barbaric and competitive nature of the US economic system and its followers. The politicians who articulate a vision of a society with a more equal distribution of income to me are worthy of voting for.

14 comments on “Gini: A Measure of Inequality ”

  1. One Anonymous Bloke 1

    We could be a fast follower behind the current leaders and we’d still do better than the OECD average.

  2. Ad 2

    Go and have a good chat with Dr Elizabeth Craig at the University of Otago (and also Labour’s Clutha-Southland candidate). She will give you chapter and verse on GINI coefficients to whole rafts of epidemiological measures. Plenty of datasets stretching back a few decades now.

    • karol 2.1

      Liz Craig as in this article, 2012?

      If New Zealand wanted to see the rates of other conditions such as skin infections and rheumatic fever drop, it needed to reduce child poverty and other wider environmental causes, such as the quality of housing.

      She said high rates of these conditions were partly a result of benefit cuts made in 1991 and if New Zealand wanted to see these numbers come down, the amount parents received on benefits needed to be looked at.
      […]
      Dr Craig said it was also concerning that deaths from assault had remained static since 2000, with on average eight children dying every year after being assaulted.

  3. Tom Gould 3

    Was talking to a woman in her late 50s the other day who told me she was now widowed and had 3 grown children living overseas, was working in an office earning an average wage, living in a home for the past 30 years in Auckland, mortgage paid off, that was now worth around $1.5m. She has no super savings, just a few thousand ‘put aside’ for a rainy day. She says that ‘on paper’ she is considered one of the rich. She doesn’t think she is. Is she?

    • karol 3.1

      I’d say she isn’t so much as rich, as well-off. She could sell her house if necessary – and/or downsize. She’s reasonaby secure I would have thought.

      • Zorr 3.1.1

        Agreed.

        In my opinion, even if you had to sell your house to do it, it is the ability to change/respond to change that separates the poor from the rich and that as you travel the spectrum between the two, the ability to cope with change increases.

    • Stephanie Rodgers 3.2

      It depends what you mean by “an average wage” (mean or median? 😛 ) but it would certainly be a lot easier to get by without the costs of rent or a mortgage (or a student loan!). Probably not rich, but probably in a far better position than a lot of others.

  4. Tracey 4

    labour and greens need to stick to the mediam and start sentences with ” half of all new zealanders”

    counter nationals penchant for averages.

  5. adam 5

    Thank you FLIP – So we have a structural issues on going. It has another name, systemic decline. Labour won’t do a dam thing to change the structure – why because like liberal elites the globe over, they are chicken shit wimps. They know helping the 1% will mean they will get into the gated communities, they will get their 30 pieces of silver.

    Time for something stronger folks, something better. We need to have workers start to buy and run the closing factories. shops and offices . We need to take over the power, the water and the air ways and run them ourselves. We need to stop banking with the Aussie banks and join co-operatives. We need stop going to aussie food chains and by local. We need to realize there will be only change to the system from outside the system – because the system is broken.

  6. RedLogix 6

    I wonder how the NZ measure of GINI would change if we included the fact that much of this country’s income and wealth is controlled by overseas people – and thus not directly captured in this statistic?

Links to post

Recent Comments

Recent Posts

  • The Duke of Edinburgh
    Prime Minister Jacinda Ardern today expressed New Zealand’s sorrow at the death of His Royal Highness The Prince Philip, Duke of Edinburgh. “Our thoughts are with Her Majesty The Queen at this profoundly sad time.  On behalf of the New Zealand people and the Government, I would like to express ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Five Country Ministerial Communiqué
    We, the Home Affairs, Interior, Security and Immigration Ministers of Australia, Canada, New Zealand, the United Kingdom and the United States of America (the ‘Five Countries’) met via video conference on 7/8 April 2021, just over a year after the outbreak of the COVID-19 global pandemic. Guided by our shared ...
    BeehiveBy beehive.govt.nz
    1 day ago
  • Inspiring creativity through cultural installations and events
    Arts, Culture and Heritage Minister Carmel Sepuloni has today announced the opening of the first round of Ngā Puninga Toi ā-Ahurea me ngā Kaupapa Cultural Installations and Events. “Creating jobs and helping the arts sector rebuild and recover continues to be a key part of the Government’s COVID-19 response,” Carmel ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Drug-testing law to be made permanent
    Interim legislation that is already proving to keep people safer from drugs will be made permanent, Health Minister Andrew Little says. Research by Victoria University, on behalf of the Ministry of Health, shows that the Government’s decision in December to make it legal for drug-checking services to operate at festivals ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Better rules proposed for freedom camping
    Public consultation launched on ways to improve behaviour and reduce damage Tighter rules proposed for either camping vehicles or camping locations Increased penalties proposed, such as $1,000 fines or vehicle confiscation Rental companies may be required to collect fines from campers who hire vehicles Public feedback is sought on proposals ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Government backs Air New Zealand as Trans-Tasman bubble opens
    The Government is continuing to support Air New Zealand while aviation markets stabilise and the world moves towards more normal border operations. The Crown loan facility made available to Air New Zealand in March 2020 has been extended to a debt facility of up to $1.5 billion (an additional $600 ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Building gifted for new community hub in Richmond red zone
    Christchurch’s Richmond suburb will soon have a new community hub, following the gifting of a red-zoned property by Land Information New Zealand (LINZ) to the Richmond Community Gardens Trust. The Minister for Land Information, Damien O’Connor said that LINZ, on behalf of the Crown, will gift a Vogel Street house ...
    BeehiveBy beehive.govt.nz
    2 days ago
  • Pacific languages funding reopens
      Minister for Pacific Peoples Aupito William Sio says the reopening of the Ministry for Pacific Peoples’ (MPP) Languages Funding in 2021 will make sure there is a future for Pacific languages. “Language is the key to the wellbeing for Pacific people. It affirms our identity as Pasifika and ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • ERANZ speech April 2021
    It is a pleasure to be here tonight.  Thank you Cameron for the introduction and thank you for ERANZ for also hosting this event. Last week in fact, we had one of the largest gatherings in our sector, Downstream 2021. I have heard from my officials that the discussion on ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Strengthening Māori knowledge in science and innovation
    Research, Science and Innovation Minister Megan Woods has today announced the 16 projects that will together get $3.9 million through the 2021 round of Te Pūnaha Hihiko: Vision Mātauranga Capability Fund, further strengthening the Government’s commitment to Māori knowledge in science and innovation.  “We received 78 proposals - the highest ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Government delivers next phase of climate action
    The Government is delivering on a key election commitment to tackle climate change, by banning new low and medium temperature coal-fired boilers and partnering with the private sector to help it transition away from fossil fuels. This is the first major announcement to follow the release of the Climate Commission’s ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Continued investment in Central Otago schools supports roll growth
    Six projects, collectively valued at over $70 million are delivering new schools, classrooms and refurbished buildings across Central Otago and are helping to ease the pressure of growing rolls in the area, says Education Minister Chris Hipkins. The National Education Growth Plan is making sure that sufficient capacity in the ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Two more Christchurch schools complete
    Two more schools are now complete as part of the Christchurch Schools Rebuild Programme, with work about to get under way on another, says Education Minister Chris Hipkins. Te Ara Koropiko – West Spreydon School will welcome students to their new buildings for the start of Term 2. The newly ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Independent experts to advise Government on post-vaccination future
    The Government is acting to ensure decisions on responding to the next phase of the COVID-19 pandemic are informed by the best available scientific evidence and strategic public health advice. “New Zealand has worked towards an elimination strategy which has been successful in keeping our people safe and our economy ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Supporting Māori success with Ngārimu Awards
    Six Māori scholars have been awarded Ngārimu VC and the 28th (Māori) Battalion Memorial scholarships for 2021, Associate Education Minister and Ngārimu Board Chair, Kelvin Davis announced today. The prestigious Manakura Award was also presented for the first time since 2018. “These awards are a tribute to the heroes of the 28th ...
    BeehiveBy beehive.govt.nz
    3 days ago
  • Global partnerships propel space tech research
    New Zealand’s aerospace industry is getting a boost through the German Aerospace Centre (DLR), to grow the capability of the sector and potentially lead to joint space missions, Research, Science and Innovation Minister Megan Woods has announced. 12 New Zealand organisations have been chosen to work with world-leading experts at ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Government backs more initiatives to boost food and fibre workforce
    The Government is backing more initiatives to boost New Zealand’s food and fibre sector workforce, Agriculture Minister Damien O’Connor announced today. “The Government and the food and fibres sector have been working hard to fill critical workforce needs.  We've committed to getting 10,000 more Kiwis into the sector over the ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Minister welcomes Bill to remove Subsequent Child Policy
    Minister for Social Development and Employment Carmel Sepuloni has welcomed the first reading of the Social Security (Subsequent Child Policy Removal) Amendment Bill in the House this evening. “Tonight’s first reading is another step on the way to removing excessive sanctions and obligations for people receiving a Main Benefit,” says ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Mental Health Amendment Bill passes first reading
    The Government has taken a significant step towards delivering on its commitment to improve the legislation around mental health as recommended by He Ara Oranga – the report of the Government Inquiry into Mental Health and Addiction, Health Minister Andrew Little says. The Mental Health (Compulsory Assessment and Treatment) Amendment ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Whenua Māori Rating Amendment Bill passes third reading
    Local Government Minister Nanaia Mahuta has welcomed the Local Government (Rating of Whenua Māori) Amendment Bill passing its third reading today. “After nearly 100 years of a system that was not fit for Māori and did not reflect the partnership we have come to expect between Māori and the Crown, ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Trans-Tasman bubble to start 19 April
    New Zealand’s successful management of COVID means quarantine-free travel between New Zealand and Australia will start on Monday 19 April, Prime Minister Jacinda Ardern announced today. Prime Minister Jacinda Ardern and COVID-19 Response Minister Chris Hipkins confirmed the conditions for starting to open up quarantine free travel with Australia have ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Ngāti Hinerangi Claims Settlement Bill passes Third Reading
    Minister for Treaty of Waitangi Negotiations Andrew Little welcomed ngā uri o Ngāti Hinerangi to Parliament today to witness the third reading of their Treaty settlement legislation, the Ngāti Hinerangi Claims Settlement Bill. “I want to acknowledge ngā uri o Ngāti Hinerangi and the Crown negotiations teams for working tirelessly ...
    BeehiveBy beehive.govt.nz
    4 days ago
  • Independent group announced to advise on firearms matters
    Minister of Police Poto Williams has announced the members of the Ministers Arms Advisory Group, established to ensure balanced advice to Government on firearms that is independent of Police. “The Ministers Arms Advisory Group is an important part of delivering on the Government’s commitment to ensure we maintain the balance ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Kiri Allan to take leave of absence
    Kiri Allan, Minister of Conservation and Emergency Management will undertake a leave of absence while she undergoes medical treatment for cervical cancer, Prime Minister Jacinda Ardern announced today. “I consider Kiri not just a colleague, but a friend. This news has been devastating. But I also know that Kiri is ...
    BeehiveBy beehive.govt.nz
    5 days ago
  • Excellent progress at new Waikeria prison build
    Excellent progress has been made at the new prison development at Waikeria, which will boost mental health services and improve rehabilitation opportunities for people in prison, Corrections Minister Kelvin Davis says. Kelvin Davis was onsite at the new build to meet with staff and see the construction first-hand, following a ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Expert panel proposes criminal limits for drug driving
    To reduce the trauma of road crashes caused by drug impaired drivers, an Independent Expert Panel on Drug Driving has proposed criminal limits and blood infringement thresholds for 25 impairing drugs, Minister of Police Poto Williams and Transport Minister Michael Wood announced today. The Land Transport (Drug Driving) Amendment Bill ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Covid-19 imgration powers to be extended
    Temporary COVID-19 immigration powers will be extended to May 2023, providing continued flexibility to support migrants, manage the border, and help industries facing labour shortages, Immigration Minister Kris Faafoi announced today. “Over the past year, we have had to make rapid decisions to vary visa conditions, extend expiry dates, and ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Covid-19 immigration powers to be extended
    Temporary COVID-19 immigration powers will be extended to May 2023, providing continued flexibility to support migrants, manage the border, and help industries facing labour shortages, Immigration Minister Kris Faafoi announced today. “Over the past year, we have had to make rapid decisions to vary visa conditions, extend expiry dates, and ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • More support for mums and whānau struggling with alcohol and other drugs
    The Government is expanding its Pregnancy and Parenting Programme so more women and whānau can access specialist support to minimise harm from alcohol and other drugs, Health Minister Andrew Little says. “We know these supports help improve wellbeing and have helped to reduce addiction, reduced risk for children, and helped ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Ahuwhenua Trophy Competition Field Day – Tātaiwhetū Trust at Tauarau Marae, Rūātoki
    *** Please check against delivery *** It’s an honour to be here in Rūātoki today, a rohe with such a proud and dynamic history of resilience, excellence and mana. Tūhoe moumou kai, moumou taonga, moumou tangata ki te pō. The Ahuwhenua Trophy competition is the legacy of a seed planted ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Crown accounts again better than forecast
    The economic recovery from COVID-19 continues to be reflected in the Government’s books, which are again better than expected. The Crown accounts for the eight months to the end of February 2021 showed both OBEGAL and the operating balance remain better than forecast in the Half Year Economic and Fiscal ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • FIFA Women’s World Cup to open in New Zealand
    Sport and Recreation Minister Grant Robertson and Economic Development Minister Stuart Nash have welcomed confirmation New Zealand will host the opening ceremony and match, and one of the semi-finals, of the FIFA Women’s World Cup in 2023. Grant Robertson says matches will be held in Auckland, Hamilton, Wellington and Dunedin, ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • 1 April changes raise incomes for 1.4 million New Zealanders
    Changes to the minimum wage, main benefit levels and superannuation rates that come into force today will raise the incomes for around 1.4 million New Zealanders. “This Government is committed to raising the incomes for all New Zealanders as part of laying the foundations for a better future,” Minister for ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • New Dunedin Hospital – Whakatuputupu approved for fast track consenting process
    The New Dunedin Hospital – Whakatuputupu has been approved for consideration under the fast track consenting legislation.  The decision by Environment Minister David Parker signifies the importance of the project to the health of the people of Otago-Southland and to the economy of the region.  “This project ticks all the ...
    BeehiveBy beehive.govt.nz
    1 week ago
  • Next steps for Auckland light rail
    Transport Minister Michael Wood is getting Auckland light rail back on track with the announcement of an establishment unit to progress this important city-shaping project and engage with Aucklanders. Michael Wood said the previous process didn’t involve Aucklanders enough.                       ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Tourism fund to prioritise hard-hit regions
    The Minister of Tourism is to re-open a government fund that supports councils to build infrastructure for visitors, with a specific focus on regions hardest hit by the loss of overseas tourists. “Round Five of the Tourism Infrastructure Fund will open for applications next month,” said Stuart Nash. It ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Governance Group to lead next phase of work on a potential new public media entity
    A Governance Group of eight experts has been appointed to lead the next phase of work on a potential new public media entity, Minister for Broadcasting and Media Kris Faafoi announced today.  “The Governance Group will oversee the development of a business case to consider the viability of a new ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • New funding to keep tamariki and rangatahi Māori active
    Minister for Māori Development Willie Jackson today helped launch a new fund to provide direct financial support for tamariki and rangatahi Māori throughout the South Island who is experiencing financial hardship and missing out on physical activity opportunities. “Through Te Kīwai Fund, we can offer more opportunities for Māori to ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Single tāne, sole parent dads supported into papakāinga housing
    Six whānau in Pāpāmoa receive the keys to their brand-new rental homes today, in stage four of a papakāinga project providing safe and affordable housing in the regions. Minister for Māori Development, Willie Jackson congratulates Mangatawa Pāpāmoa Blocks Incorporated on the opening of three affordable rentals and three social housing ...
    BeehiveBy beehive.govt.nz
    2 weeks ago
  • Speech to Disarmament and Security Centre
    Kia ora tatou. It’s great to be here today and to get a conversation going on the disarmament issues of greatest interest to you, and to the Government. I’m thrilled to be standing here as a dedicated Minister for Disarmament and Arms Control, which I hope reinforces for you all ...
    BeehiveBy beehive.govt.nz
    2 weeks ago