Max Rashbrooke: New Zealand performs poorly in major OECD report on inequality and growth

A major OECD report out today provides new evidence that growing income gaps damage economic growth - with New Zealand singled out as the country whose economy has suffered most.

Max Rashbrooke, editor of Inequality: A New Zealand Crisis, published last year by Bridget Williams Books, said: 'This is a landmark report from one of the world's most important economic bodies.

'The report shows the New Zealand economy grew by just under 30 per cent between 1990-2010, but claims it would have grown by 45 per cent - that is, half as much again - if income gaps had stayed at their mid-1980s levels.

'New Zealand had the developed world's biggest increase in inequality from the mid-1980s to the mid-2000s.

'By arguing that increased inequality harms growth rather than promoting it, the OECD has removed one of the last remaining arguments for not taking inequality seriously.

'Inequality harms growth because it leaves so many families without the secure foundation they need to make an economic contribution or invest in their children's success.

'The report also provides important new evidence that it is not just the very poorest but the whole of the bottom 40% whose life chances suffer as a result of growing income gaps.

'The OECD recommendations, which include increased taxes and benefits alongside more spending on education, are also a watershed. Redistribution, if done well, is good for economic growth, the report argues.

'Given the growing evidence of the damage that inequality does, New Zealand has to confront the issue head on.'

For more information about author Max Rashbrooke

For more information about the book Inequality: A New Zealand Crisis

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