What Kind of Country? Essay One: Taking Stock.
- tracey2203
- 15 hours ago
- 9 min read
South Island, Aotearoa New Zealand | Tracey Sharp
What Kind of Country?
A Closing the Gap essay series exploring the values shaping Aotearoa New Zealand.
Every budget, every policy choice and every political promise reflects a set of values: what matters, who benefits, who is left behind, and what we owe one another.
In the lead-up to the 2026 election, What Kind of Country? looks beyond the political contest to ask a bigger question: what kind of country are we becoming — and what kind do we want to be?
Essay One: Taking Stock
The Gross National Product measures everything, in short, except that which makes life worthwhile. — Robert F. Kennedy, 1968
We spend a great deal of time talking about the economy.
We celebrate growth, worry about inflation, debate tax, discuss interest rates and analyse unemployment figures. Governments rise and fall on economic performance. Political parties campaign on building it, growing it, or fixing it.
And for good reason. A strong economy matters. It creates jobs and incomes, generates the revenue that pays for public services, and gives governments and households more room to make choices. When an economy falters, the consequences are real: businesses struggle, jobs disappear, government finances tighten and families feel less secure.
New Zealand is living through just such a period. Growth has been weak, unemployment has risen and many households are still feeling the effects of higher living costs. Getting the economy moving again matters.
But there is more to understanding economic success than standard economic measures. To get a genuine handle on how we, as a country, are doing – we need to ask a deceptively simple question:
What is an economy for?
The obvious answer is that it creates wealth. That is true, but it is incomplete. The purpose of an economy is to create the conditions in which people and communities can thrive - meaningful work, secure lives, healthy families, and a future worth looking forward to.
And whether the economy is providing this, goes beyond measuring growth.
We need to ask not only whether the economy is growing, but who benefits when it does – and who carries the burden when it doesn’t.
A country can grow while leaving many of its people behind. Equally, when times are hard, the costs do not necessarily fall evenly. If the gap between the rich and the poor, the haves and the have-nots, gets too large, the consequences for individuals and for society as a whole are far-reaching.
Inequality - a measure that matters
The most influential study of the consequences of income and wealth inequality is Richard Wilkinson and Kate Pickett’s The Spirit Level (2009). Using data across dozens of countries, their book showed that more unequal societies do worse on nearly every measure you look at: health, crime, mental health, educational outcomes, social cohesion, and social mobility.
Where inequality increases, wellbeing decreases across the whole population.
Fifteen years on, with The Spirit Level at 15 (2024), Wilkinson & Pickett found that, not only was inequality growing, the consequences are even clearer. More unequal societies continueto experience worse health, lower social mobility, more violence and imprisonment, and always, poorer outcomes for children. Growing inequality is also associated with declining social trust, greater political polarisation and environmental harm.
The effects of inequality, in other words, extend far beyond the incomes of those at the bottom. They shape the health and cohesion of the society we all live in.
The Scale of Global Inequality
According to the World Inequality Report 2026:
- The richest 10% of the world’s population receive more income than the remaining 90% combined
- The poorest half of the world’s population receives less than 10% of global income.
- Wealth is even more concentrated: the richest 10% own about three-quarters of all wealth, while the poorest half owns only 2%.
- Fewer than 60,000 people — the richest 0.001% — hold roughly three times as much wealth as half of humanity combined.
This concentration is increasing. Since the 1990s, the wealth of billionaires and people worth more than €100 million has grown at about 8% a year, nearly twice the growth rate experienced by the poorest half of the global population.
Inequality is no longer just about the gap between high and low incomes. It is a system of overlapping inequalities — wealth, gender, education, climate responsibility, geography, taxation and political power — that reinforce one another and have real-world consequences for humanity and our planet.
But here’s the kicker:
… today’s extreme inequality is not inevitable. It is produced by political choices, institutions and tax systems, and it can therefore be changed. - World Inequality Report 2026
New Zealand and Inequality
One of New Zealand’s enduring 20th-century myths was that we were an egalitarian paradise: work hard, play by the rules, and the Kiwi quarter-acre dream was within reach.[1] For a time, our ‘cradle-to-grave’ welfare state and commitment to redistribution were regarded with envy elsewhere in the developed world.
That began to change dramatically in the 1980s and 1990s. New Zealand underwent a period of profound economic restructuring. Neoliberalism – the shift towards a greater reliance on markets and a smaller role for the state – brought sweeping changes to taxation, labour markets, welfare and public ownership. In less than a decade, New Zealand experienced one of the sharpest increases in income inequality in the developed world.
The gap opened quickly, and it has never returned to its earlier levels.
Today, the typical household in the poorest fifth quintile[1] has After housing costs, the typical household in the poorest fifth has $15,944 a year left after housing costs. In the middle fifth, it's $41,564. In the richest fifth, it's $89,423 – about five and a half times as much.
But look at the average instead of the typical household, and the gap gets much bigger: $11,437 for the poorest fifth, $107,598 for the richest – 9.4 times as much. The jump happens because a small number of very high incomes pull the top fifth's average well above what most households in that group actually have. The gap between these two numbers is itself a glimpse of how concentrated income is at the very top.
Wealth tells a related but more specific story.
Every household wealth survey since 2015 has found the poorest half of New Zealand holding about 2% of the country’s wealth. Between 2015 and 2024, a typical household in the poorest fifth saw its net worth grow by three thousand dollars – from $8,000 to $11,000. A typical household in the wealthiest fifth saw its net worth grow by more than a million – from $1.32 million to $2.41 million. The gap between them, measured in dollars a family could actually spend or borrow against, widened by over a million dollars in a decade.
This is why the language of national scarcity can be misleading. New Zealand is not a poor country. Household wealth has grown dramatically over the past two decades. The question is not whether wealth has been created, but who has benefited from it.
Wealth compounds for those who own assets. For those who do not, it does not. New Zealand has generated considerable wealth, but its gains have not been shared evenly.
As stated above, it's not just about whether the economy is growing, but who benefits when it does – and who carries the burden when it doesn’t.
The Human Cost of Inequality
According to a recent Stuff survey, Four in ten Kiwis feel worse off financially than they did a year ago:
• 39% of New Zealanders feel financially worse off than last year
• A third of Kiwis have less than $1,000 saved, leaving families highly vulnerable to emergencies
• Stagnant wage growth and high inflation are forcing many to borrow for daily living costs
The economy is under real strain right now, and that strain is not landing evenly.
Our unemployment rate is high at 5.6% - but within that, Māori unemployment sits at 11.5%, and Pacific unemployment at 11.9% – roughly double the national rate. Disabled New Zealanders remain far less likely to be in work at all: in the most recent detailed data, only 42.5% of working-age disabled people were employed, compared with 78.9% of non-disabled people.
Young people are the hardest hit. The number of 15-to-24-year-olds not in employment, education or training has climbed to 13.8%. The Salvation Army says it is seeing growing numbers of under-25s turning to it for support.
They’re not people who can wait another six months for economic recovery — they need help now. - Salvation Army’s principal policy analyst, Paul Barber.
This matters beyond the immediate hardship. Young people locked out of work at the start of their working lives tend to carry the effects for years — weaker lifetime earnings and a harder path to the security that lets people build families, buy homes, or simply plan ahead. A generation that starts behind rarely catches up on its own. What looks like a short-term unemployment spike risks becoming a long-term entrenchment of exactly the inequality this essay is about.
Food insecurity is affecting more Kiwis than ever before. Recent figures show one in three households experienced food insecurity over the past year, with 68% of those households saying they had only begun struggling to afford enough food within the past 12 months. Families delay visits to the doctor because they cannot afford the cost. More households struggle to meet rising rents and mortgages. Young adults wonder whether home ownership is becoming something they will inherit rather than earn.
Even small changes tell a larger story.
Schools are camps because too many parents cannot afford the contribution. No child will fail in life because they miss a few days away. Yet school camps are about far more than outdoor education. They are where friendships deepen, confidence grows and children discover something about themselves beyond the classroom. When experiences that once felt ordinary become inaccessible to growing numbers of families, something important has shifted. These are not isolated problems. They are signals.
New Zealand is no longer a place where people can pull themselves up out of hard times. Our systems are failing to provide a safety net for unexpected life events or economic shifts. - The Salvation Army’s Research and Justice Director, Dr. Bonnie Robinson.
What Kind of Country?
So where does this stocktake leave us?
New Zealand is a wealthy country going through difficult economic times. We have created substantial wealth, but it is very unevenly held. Income inequality remains well above the levels we once knew, and some of those with the least economic security are carrying the greatest strain as the economy struggles.
That is the picture at this moment. But a stocktake is not a verdict.
None of these outcomes is inevitable. They are shaped by choices – about tax and wages, housing and public services, what we fund collectively, and how the wealth an economy creates is shared. Some of those choices were made decades ago. Others are being made now.
And in an election year, those choices become particularly visible.
Over the coming months, political parties will offer competing accounts of what is wrong, what needs fixing and what New Zealand can afford. There will be promises about growth, tax cuts, spending, jobs and the cost of living. Those things matter. But if the purpose of an economy is to enable people and communities to thrive, we need to ask something more of the policies being put before us.
Who will benefit? Who will pay? Will this narrow the gap or widen it? Will it give more people the security and opportunity to build a good life?
New Zealand still has choices many countries would envy: strong institutions, a functioning democracy, genuine wealth and, however strained, a belief that where you start should not determine where you finish.
This first essay has been a stocktake. The essays that follow will look more closely at the choices behind the numbers — and what they tell us about the country we are becoming.
Because as we head towards Election 2026, the question isn't simply who we want to govern us. It's what kind of country we want them to help us build.
Thanks for reading. If you read this far, you're a hero! These are big questions, and I certainly don't pretend to have all the answers. But I think they're questions worth asking – especially in an election year. I'd love to hear what you think.
Vinaka vaka levu (big warm thanks)
Tracey
Join the conversation. Closing the Gap exists to encourage informed discussion about inequality, opportunity and the policies that shape life in Aotearoa New Zealand. If this article made you think, please share it with someone else.
[1] One way of seeing the gap is to line up New Zealand households from lowest to highest income and divide them into five equal groups. Economists call these quintiles; each one contains 20% of households.
[1] It almost goes without saying that this particular version of the Antiodean dream was built around the white, male breadwinner.
Comments