The cost of living

The income gap

In the immediate post-war decades, a booming economy and full employment coupled with generous state assistance saw real incomes increase while inequality decreased. All this began to change from the mid-1970s as economic conditions worsened and the political upheavals of subsequent decades saw social assistance programmes axed or cut back. 

Official figures show that between 1988 and 2008 the ratio of high-income households to low-income households increased markedly. In 1988, high-income households earned 2.24 times those at the bottom. By 2008, top-income earners were pocketing 2.59 times more.

Over the same period the proportion of the population living in low-income households rose from 9 to 14 percent. Low income is defined as real disposable income (after tax and housing costs) that’s below 60 percent of the median – otherwise known as the “poverty line”.

Housing

Rising housing costs are among the factors putting pressure on Kiwis' disposable income. Since 1988, the proportion of households spending more than 30 percent of their disposable income on housing has doubled. Those hardest hit have been low-income households. 

Power costs

Spiralling electricity costs have also had a bigger impact on low-income households. In 1988, the poorest households were spending 4.2 percent of their income on energy; by 2007, this figure had jumped to 6.8 percent.

Middle- and high-income households are also spending more, but for them the rise hasn’t been as steep. Households at the top of the socio-economic ladder now spend 2.5 percent of their income on energy compared with 1.9 percent in 1998.

It’s likely the amount all households spend on energy would be significantly higher if we heated our homes to a healthy temperature. The World Health Organisation recommends a minimum indoor temperature for living areas of 18°C and for bedrooms 16°C. Many Kiwi homes are routinely below these temperatures.

Food

According to Statistics NZ, food prices have generally kept pace with inflation over the last 50 years. But there are exceptions. Eggs are almost one-third the price they were back in 1959. Butter and sugar are cheaper than 50 years ago. Milk and white bread are more expensive.

 Prices have been adjusted for inflation.

Guide to the tables

• Our data is sourced from the Ministry of Social Development and Statistics New Zealand.