A new survey by the EY accounting and consultancy firm was one of the most revealing reports on the issues people felt most concern about in relation to the economy.
A 1000 people were surveyed in March and according to a June 4 article by Liam Dann in the NZ Herald “found the increasing cost of living dominated concerns. Rising power costs were the most specific issue.
“The increasing cost of living was rated as the most concerning issue; 57 per cent of respondents rated it as extremely concerning.
“Increasing energy prices and the cost of essential services were rated extremely concerning by 49 per cent and 48 per cent of respondents respectively.
“That contrasted with the lowest-ranking concern – falling house prices – rated as extremely concerning by just 16 per cent.
EY”s David Snell is quoted making an obvious point:
“There is a potential risk for the Government heading into next year’s election, that what it considers to be contributing factors to wellbeing don’t align with the problems as experienced by ordinary New Zealanders.”
Snell said there appeared to be two key contributing factors to this feeling.
“A perception of low wage growth – and the cost of energy and essential services being an issue of extreme concern for around one in two [49 per cent and 48 per cent respectively]. At an individual level, many are feeling the pinch.”
Of course, people were also concerned about government funding for health and education, but it seemed low wage growth in the past few years was being felt strongly and Snell noted 61 per did not expect their income to increase this year.
“There appeared to have been little in the Budget to address that, he said.
“New Zealand, relative to other developed nations tended to have relatively low levels of income, whereas costs tended to be relatively similar.
What this survey has underscored is that the big majority of working people are struggling to survive against the relentless pressure of rising housing, energy and other basic costs.
Those at the bottom of the income pile who have had the real value of basic benefits squeezed for decades saw no relief other than the fact that future increases will be tied to average wage movements rather than the historically lower consumer price index. WINZ, the agency responsible for managing access to welfare has also ensured that around 100,000 people previously able to access benefits or other welfare support were pushed off benefits since around 2008.
That is why there is now so much more absolute poverty and homelessness in working-class communities compared to a decade ago despite the modest economic recovery and fall in unemployment rates we have seen.
The budget had nothing in it to address these issues. The current tax system that exempts the wealthiest from paying their fair share and that leaves little for the government to do that tweak spending here and there.
The anger reflected in the EY survey that is bubbling below the surface can easily explode in perverse political directions, as we have seen in the US and Europe. Labour and the Greens need policies that don’t just tweak the current system but look forward to a total transformation of society to a new socially egalitarian system able to attack the grotesque levels income and wealth inequality and take the radical actions needed for an ecologically sustainable path of development which has now become incompatible with the capitalist systems relentless pursuit of profit and growth at all costs.
Good on you Mike. Dead right and well said.
Well said Mike .
The max $60 per week you can earn above a basic benefit hasn’t been changed for 20 years .
If linked to CPI the amount people should be able to retain is closer to $150 per week. That would make a real difference and doesn’t require the raising of benefits so is politically neutral to middle NZ .
Due to the” flexibility” of modern labour markets there are thousands of people who are semi employed or underemployed . I have termed this group ” Revolvers “.
They are not “job seekers” , as they already have work , just not enough work to support themselves and increasingly they may never have a full time 40 hrs per week due to job fractionalisation , automation and climate change .
These people are currently in a poverty trap thanks to a system which is 40 years out of date .
Declare the extra work money to MSD and you are on just $260 per week . One day or three days work you are no better off . You can only keep an extra $60 per week over the basic benefit of $ 200.Grim.
Keep the extra an don’t declare it ,then its benefit fraud.Even though you should be able to keep $150 pw , if abatement rates had been adjusted to the CPI for 20 yrs ).Its state sponsored structural poverty .
MSD is happy because your work helps to pay for your benefit ,and the employer is happy because of the infinitely flexible work hours but the worker is locked in poverty week in week out if they can”t source a full time job.People who are single in this category are in even more trouble.
The 230 page welfare working group report had no real new vision to solve this and needed to create a new polemic .My idea is as follows ,create 3 major categories of citizens .
A.
1.Fully Employed =40hrs per week or more .
2.Revolvers = Semi/underemployed =/temps/part time casual/contract. People “revolving ” in the “gig’ economy.
3.Unemployed = Those who for physical or mental health reasons do not participate in the paid work force.
B . Govt statistics need to break down and publish all three categories to have an accurate view of real parcipitation in the economy.
The current 5% unemployment statistic counts every tin pot piecemeal bit of work as a job when its really nothing of the sort .It is a false statistic.We need new tools, to rework real changes in social policy.
Revolvers need to keep more of what they earn because for many of them this is a permanent situation and for many they may never obtain full time employment in an automating world.
As such they are likely to incur more debt , which increases domestic violence , drug and substance abuse and mental illness. We need to target this now.
The old welfare model was based on short term unemployment and then the resumption of full time employment .This for many thousands of people does not apply anymore.
We need a whole new welfare model , (eventually transitioning to the UBI ), which recognises that a large chunk of the work force may never secure full time work in the future and there has to be a new model to provide a fairer outcomes.
The answer is not prozac, another budget advisor or as Minto said last week more private contractors cleaning up the mess at the bottom of the cliff ,its about being able to keep enough money to have modest savings to deal with financial crises with a sense of resolution and personal dignity .To put some new fences at the top of the cliff .
There is no quantification or time line in the Budget about raising abatement rates for semi employed people .
Structural unemployment by driverless vehicles could put up to 50,000 drivers out of work in NZ within 5 years .This will not go away.
Nine years of nothing from National and now the same from Labour , where’s the wellbeing in that?
Its imperative that MSD
1. Lifts the abatement rates now to allow Revolvers to have a life rather than an existence .$60 needs to be lifted to min $ 150 pw now.
2. Statistics NZ need to change the way they measure the fully employed , the semi employed and the unemployed ,to better advise policy.
3. We need new policy advisors who can actually build a better model not just fiddle with the settings on the old model. Its no longer fit for purpose and the unfairness is entrenched.
Wellbeing budget my arse .
Very well put, the 1964 Social Security Act is totally out of sync with current social reality of Ubers, unpaid interns, and precarious work.
You make some excellent points BLACK LEMMING… however the amount you are allowed to earn on benefits without being charged massive abatements should be linked to housing and living costs aka would need to be more like double or triple in Auckland to drive beneficiaries out of poverty not $150.
“Increasing energy prices and the cost of essential services were rated extremely concerning by 49 per cent and 48 per cent of respondents respectively.”
Sad that the energy industry that has led to 71% of carbon emissions https://www.theguardian.com/sustainable-business/2017/jul/10/100-fossil-fuel-companies-investors-responsible-71-global-emissions-cdp-study-climate-change leading many of the problems of chaotic climate change, then gets to profit further from climate change that are have accelerated.
I’ve not heard many lefties, commentators or government braying for taxes akin to tobacco taxes on energy companies, or justice reviews to prosecute the wilful disregard to human life from their products and those that promote them. Most governments not only seem on the take for donations but are subsidising the pollution and signing trade deals that are forbidden to make those responsible for climate change, pay for their damaging products.
In order to drive pollution out as well governments need to grow both a brain and balls and push towards renewable energy. Very easy things like regulating full solar power being mandatory in new builds.
Or ignoring how in NZ the power companies get away with a whooping fixed charge systems that means even if you draw zero power you still will have a sizeable bill. Unlike telecoms and internet that have gone down in prices for consumers, energy is still a highly expensive cartel in NZ.
In fact the taxpayers are now paying ‘winter energy’ payments that are not means tested so that the energy companies are subsidised. Strong moves to help NZ to stop polluting energy are ignored in NZ by a so called Green/Labour government.
“Carbon emissions from the global energy industry last year rose at the fastest rate in almost a decade after extreme weather and surprise swings in global temperatures stoked extra demand for fossil fuels.
BP’s annual global energy report, an influential review of the market, revealed for the first time that temperature fluctuations are increasing the world’s use of fossil fuels, in spite of efforts to tackle the climate crisis.
The recorded temperature swings – days which are much hotter or colder than normal – helped drive the world’s biggest jump in gas consumption for more than 30 years.
Atmospheric carbon levels are leaping. We can’t afford more years like this
They also resulted in a second consecutive annual increase for coal use, reversing three years of decline earlier this decade.”
https://www.theguardian.com/business/2019/jun/11/energy-industry-carbon-emissions-bp-report-fossil-fuels
Climate change has also led to much higher insurance charges for everybody that will increase the living costs, and higher charges are likely on practically everything in the future as more disasters strike including staples like food increases as local food production is disrupted.
I totally agree with what everyone is saying about the cost of living and everything else going up and up.
What I could not understand is why the government did not implement taxes in the well being budget. That would have lifted so many people out of poverty.
If the government had introduced tax free income from $0.00 dollars to maybe $15,000.00 that would have lifted so many low income people out of poverty instead of the aliment with the minimum wage. That will take years to get any real results and cost of living will rise to erase that extra $10.00 a week if you are lucky to even receive that.
The Coalition Government needs to do more for the people that voted them in. This is not just a one party government but a Coalition Government and they should remember that.
Why can’t the IRD tax the money that leaves the country, the banks, property investors and the wealthy shareholders?
It isn’t that hard.
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