• Market income per person
• Income inequality
• Population with low incomes
• Population with low living standards
• Housing affordability
• Household crowding

Population with low incomes

Relevance

Insufficient economic resources limit people’s ability to participate in, and belong to, their community and wider society and otherwise restrict their quality of life. Furthermore, long-lasting low family income in childhood is associated with negative outcomes, such as lower educational attainment and poor health.

Current level and trends

In the year to June 2004, 19 percent of the population were living below the 60 percent threshold, a decline on the proportion in the previous survey year to June 2001 (22 percent). On all three measures (low, medium and high), the proportion of the population with low incomes increased sharply in the early-1990s, reached a peak in the mid-1990s and declined over the latter half of the decade. However, in 2004, the proportion of the population living below these thresholds was still substantially higher than it had been in 1988.

The increase in the proportion of the population with low incomes through the early 1990s is attributable to high rates of unemployment and declines in the level of social assistance. The recent improvement in this measure may likewise reflect more robust economic (and income) growth, and the steady decline in unemployment, as well as the increase in housing assistance for those at the low end of the income distribution.

Figure EC3.1 Proportion of population with net-of-housing-cost incomes below thresholds, 1988–1998, 2001 and 2004

Source: Derived from Statistics New Zealand's Household Economic Survey (1988–2004), by the Ministry of Social Development

Population group differences

In 2004, 21 percent of dependent children were in economic family units below the 60 percent line (benchmarked to the 1998 median). This represents a decline from 27 percent in 2001 and is substantially below the peak of 34 percent in 1994. However, the proportion of children in low-income families remains higher than it was in 1988 (14 percent). The most striking change between 2001 and 2004 is the fall in the proportion of children in sole-parent families below the 60 percent line, from 61 percent to 43 percent.

In the population aged 15 and over, just under a fifth (19 percent) lived in low-income economic family units in 2004 and there was no difference between males and females.

Economic family units most likely to be living with low incomes are families who rely on income-tested benefits, sole-parent families, families with at least one adult belonging to an ethnic group other than European, families in rented dwellings and families with three or more dependent children. The situation improved for most of these family types between 2001 and 2004. However, there was no change for Pacific families, and an increase in the proportion of families with at least one adult belonging to "Other" ethnic groups (including Asian) who fell below the 60 percent benchmark line.

Table EC3.1 Proportion of population with net-of-housing-cost incomes below the 60 percent line (benchmarked to 1998 median), selected years, 1988–2004

Source: Derived from Statistics New Zealand's Household Economic Survey (1988–2004), by the Ministry of Social Development
Note: Revised data (see technical details in Appendix 2)

International comparison

Based on a different measure used by the OECD – 50 percent of median equivalent disposable household income and not taking housing costs into account – 9.8 percent of New Zealanders in 2000 were living in households with incomes below the low-income threshold.⁵⁶ This figure places New Zealand in the middle of the OECD ranking, with a rate similar to Canada (10.3 percent), slightly below Australia (11.2 percent) and the United Kingdom (11.4), and well below the United States (17.0 percent). Denmark has the lowest proportion of population on low incomes (4.3 percent). By 2004, the New Zealand rate was 10.8 percent.