The thought of that will probably make most of you deeply worried on many levels. If you are like me, you are probably still paying off the credit card from the last Christmas holidays. Because the cost of living just seems to be getting higher and higher. And as a result, many New Zealanders are doing it tougher and tougher. And the National Government’s recent increase to the minimum wage of 25 cents an hour will not make it any easier.
So preparing for my first post on The Daily blog, I got to thinking about the cost of living in Aotearoa New Zealand. And then I saw a recent newspaper story about how a majority of Kiwis felt that they were better off 10 years ago. And I started to wonder whether every generation looks back at the good old days or whether it really has got that bad and if so, how did we get here, and I started to look at a few costs that most of us have to pay for and I started to see a pattern.
So first there is the price of food. And I wondered who sells us our food. And I realised it was basically just two big companies – I think the economists call it a duopoly market. Hmm no surprises there then.
Then there’s that roof over our heads. And I wondered who helps us put a roof over our heads. And I realised that if you are lucky to own your own home then it’s the banks. More importantly, it’s the big overseas banks. And I remembered a recent newspaper article that reported a profit of $3 billion over the 2011 financial year (up 18% on last year) mostly for the four big Aussie owned banks.
Then there’s the price of the house itself. And I wondered why are prices so high? And I realised that with no capital gains tax in NZ, buying and selling your house is one of the few non-taxable earning opportunities for many Kiwis. And that NZ house prices by all economic metrics are way over valued and a new speculative housing bubble seems to be growing again. Even the Reserve Bank has noted that houses remain expensive in affordability terms relative to household incomes at 4.5x versus 3.0x in the 1990s.
Then there’s the electricity that is vital to run our homes. And I wondered who owned the electricity companies. And I realised that it was the government, but a government that had long given up on the view that the role of government-owned electricity companies was to provide cheap electricity to its citizens and instead saw them as a very lucrative dividend stream.
And not only that, but a current government that as we speak is spending over $1million of our own money on an advertising campaign to convince you to buy shares in an electricity company you already own! And I thought, well I don’t see the price of electricity coming down any time soon. Especially if those “Mum and Dad” investors we seem to be hearing so much about decide to sell their shares on the secondary market to realise a potential capital gain (remember we have no capital gains tax here).
And I came to the conclusion that we are in a bit of a mess here in New Zealand. And that it seems like we have been sold a bit of a lie. A lie that the market was supreme and that somehow we needed these great “market reforms” of the last few decades in order for us to be unshackled from the oppressive restrictions of state control.
Because as far as I can see these changes have not led to a cheaper cost of living, let alone a fairer, more equal or richer New Zealand. In fact all the stats seem to be pointing to the opposite reality.
And I thought, well isn’t it good that the new Daily blog has been established so we can discuss these things, and maybe, just maybe, and with your help, suggest an alternative fairer vision for Aotearoa New Zealand.
Cause despite these issues, I love this country, it’s my home, my place, and I love it too much to let it be sold further from underneath me. You with me?
Chris Flatt is the National Secretary of the NZ Dairy Workers Union