The High Cost of Inequality

The OECD “Trends in Inequality and its Impact on Economic Growth” report was warmly received by the New Zealand Council of Christian Social Services (NZCCSS).

“Our member social services agencies have been dealing with the fall-out of high levels of income inequality for many years”, said Trevor McGlinchey, NZCCSS Executive Officer. “Achieving even the basic needs for families on the bottom is almost impossible. It is good this report recognises the impacts of inequality on the bottom 40% of earners. Even families with close to mid-level incomes increasingly need to access food parcels, family counselling (due to the family stress brought about by not having enough income) and other services from our member Christian Social Services Agencies”.

The OECD Report demonstrates policies which favour those with the highest incomes, in the hope this will increase the size of the economy which will eventually “trickle down” to those in need, actually harms growth. It proposes real economic growth is achieved when government polices reduce inequalities through redistributing wealth, via taxes and transfers including increasing social welfare benefit levels, to those who are in the lowest 40% of earners.

“NZCCSS has been educating its members, the wider public, politicians and policy makers on the negative impacts of income inequality on the wellbeing of New Zealanders for the last four years,” said McGlinchey. “Our education programme “Closer Together Whakatata Mai” has brought together a range of information on these issues which we have made freely available to all. Public unease about high levels of inequality was obvious in the pre-election polls. Hopefully, this public unease and the unequivocal findings of the OECD report will result in policies which will see immediate and significant changes in the incomes of poorer New Zealanders”.

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