Mr Key told a post-budget business lunch in Auckland that equality between rich and poor wasn’t growing.
He based this on a study by Sir Brian Perry, which he said found New Zealand has not become more unequal in the last 15 years.
“New Zealand relative to its OECD peers is less unequal than most,” he said.
But Labour finance spokesman David Parker said the gap between the wealthy and the less well-off was widening every year.
“National cherry-picks statistics to back up its claims. The Perry Report that John Key cites excludes capital gains, which is a significant contribution to inequality in this country,” Mr Parker said.
He said New Zealand has gone from being in the top 30 per cent for income inequality in the 1980s to the worst 40 per cent at present.
“The consequences of income inequality at these levels pile up every year. That’s why home ownership rates are dropping and child poverty is increasing.”
Mr Parker said gaps were widening under National’s policies.