Paula Bennett says the Government's efforts to close the gaps between the rich and poor have been stymied by the Christchurch earthquakes and the global financial crisis.
Under questioning about National's efforts over the past nine years, Ms Bennett told The AM Show said there was "no doubt" people were still struggling, but the exact gap depends on "which way you cut it and how you kind of look at it".
New Zealand has suffered one of the fastest rates of growing inequality in the world since the economic reforms of the 1980s. It has continued to get worse under National, with Statistics NZ last year saying the richest 10 percent of Kiwis hold 60 percent of the wealth - up from 55 percent in a decade.
New Zealand's Gini coefficient - the international measurement used to track income inequality - rose dramatically under National in the 1990s, steadily decreased under Helen Clark's Labour, but has risen every year but one since 2010, according to Statistics NZ and OECD data.
Asked point-blank if National had succeeded in tackling inequality, Ms Bennett admitted the gaps hadn't been closed.
"Shall we pretend there wasn't a global financial crisis and that Christchurch didn't happen?" she asked host Duncan Garner.
Ms Bennett, an ex-beneficiary and former Minister for Social Development, said under National, New Zealand has "got the lowest number on welfare that we have seen for generations".
According to the Ministry for Social Development, in June this year there were 276,331 working age people receiving a main benefit - but it also says there were only 268,972 in 2008, at the end of Labour's nine years in Government.
Ms Bennett said Labour's plan to cancel National's tax cuts and spend the savings on its child-focused families package was not the way to help struggling families.
"I don't get caught in the whole rich and poor thing because I don't think you need to bring the rich down to make sure you're looking after those that are less advantaged."
As for disparities in pay, Ms Bennett said it wasn't the Government's responsibility.
"We don't pay everyone. That's what businesses do."
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