Polity: The truth about the gap between the rich and the rest

• notices and features
• 10 years ago
• Categories: Economy, john key, national, same old national, spin, treasury, wages, you couldn't make this shit up
• Tags: income inequality, incomes, lying with numbers, polity

Rob Salmond points out how “careful” John Key was in his recent speech when looking at how National has been “helping” the people of NZ financially. He and his government have helped themselves and their affluent mates while screwing everyone else. It is pretty clear who has been getting the benefits – since 2010 just the households with at least a hundred thousand dollars income. The bigger the household income – the more National helps.

John Key – lying with numbers yet again.

Here’s John Key in his State of the Nation speech yesterday, talking up his record on inequality:

Household incomes have been rising faster than the cost of living, right across the board, and income inequality has been declining. Despite what our political opponents try to claim, it is simply not true that the rich are getting richer and the poor are getting poorer.

Well, let’s go to the tape.

This chart plots changes in aggregate (nominal) taxable incomes in various income bands since National’s big tax switch in 2010. It also plots CPI inflation over the same period. Here is what is shows:

• Top income earners (over $150,000 a year) have been creaming it, with their nominal incomes up 60% in just three years, increasing by over half even once inflation is taken into account.
• The massive majority of the population earning under $100,000 a year have been virtually standing still. As a group, their nominal incomes have out-paced price rises by a meagre 0.9% per year.

And if you dig further to look at those earning under $50,000 a year, which is still most of the adult population, their incomes have not even kept pace with inflation. Their nominal incomes have risen by only 5.9% over three years, while prices have gone up 7.7%.

The wording of Key’s claim that he is tackling inequality in New Zealand is very, very careful. He is dancing on the head of a pin. And, as these figures show, any gains to everyday New Zealand families are wafer thin at best.¹

New Zealanders know that National is misleading them. They know that National’s economy, fuelled by a global recovery, has delivered massive income gains to very high earners, and delivered next to nothing for everyone else. That drives inequality up, not down. And his own Treasury’s figures say so.