‘Everything goes up’: New Zealanders make painful sacrifices as cost of living soars | New Zealand

In Auckland, a widower considers selling his house to get by; in Whakatane, an adult student returns to live with his parents because he cannot afford to rent; in Wellington, an early childhood teacher goes without food to pay her bills.

As the cost of living explodes in New Zealand, so do the sacrifices made by its citizens.

Inflation in Aotearoa has hit a three-decade high, driven by rising gasoline and housing costs. It shows no signs of slowing down – inflation hit 5.9% at the end of 2021, and ANZ, the country’s largest bank, expects it to continue rising in 2022. The cost of living increased by 5.2% for the average household in one year. .

“Anything goes up: groceries, a coffee at the local cafe, a burger at the little local pub ($21), a car service at the local garage, a haircut,” says Wellingtonian Pal Andre Ricard, 49. .

“Leaving aside the basic costs of living, the cost of rent and buying a home is off track…and salaries stay the same.”

Walk into any supermarket and the prices for basic items can be mind-boggling. For $100 you will get: a dozen eggs, a carton of milk, a loaf of bread, a block of cheese, a head of lettuce, a block of butter, a chicken, a bottle of wine and a box of diapers.

Last week, in a blow to brassica lovers, cauliflowers were priced at $15 apiece. Annual food prices have seen the biggest increase since 2011, peaking at 4.5% between December 2020 and 2021.

“The cost of groceries has been rising quite rapidly,” says Auckland resident Jijo James.

James, 28, says he used to pay $100 for a typical grocery store before the Covid-19 shutdowns, but a similar package now costs between $180 and $200. “I was content to buy only essential items and cut down on extra expenses,” he says.

Bills like internet and electricity have also gone up, says James. “But my income stayed the same, making it harder to save for any potential emergency. I went from being able to save money every week to living paycheck to paycheck. .

Regulator reveals measures to improve competition

In a draft report from last year, the Commerce Commission found that New Zealand shoppers face some of the most expensive grocery products in the OECD. The commission also found that the profit margins of New Zealand supermarkets – which are dominated by a duopoly – were consistently higher than those of international grocery chains.

The two big supermarket businesses – Foodstuffs and Woolworths NZ – dominate wholesale and distribution, making it difficult for other businesses to secure wholesale supplies at competitive prices.

On Tuesday, the Commerce Commission revealed its final recommendations on what needs to be done to improve competition and affordability. He failed to break the duopoly and force them to sell some of their stores, opting instead to make more land available for new grocery stores by changing planning laws to free up sites.

The competition regulator also called on big players to improve access to wholesale supplies and prices for smaller players, and recommended the creation of a grocery sector regulator and settlement system. disputes to resolve disputes between wholesalers and suppliers.

Anna Rawlings, chair of the Commerce Commission, said “competition in this industry is not working well for consumers”.

“We believe the best way to improve the conditions for competition is to allow others to enter and expand into the sector by freeing up land for development and providing additional wholesale access to supply. in the grocery store.”

Consumer Affairs Minister David Clark said the government would implement the recommendations. “New Zealanders are obviously paying too much at checkout,” he said.

If we do not see significant changes in the sector, we will consider other measures. »

Increase in housing and rents

The grocery store isn’t the only area where people are feeling the pinch. Housing affordability is at an all-time high, with the average property now worth 8.8 times the average household income, according to property analysts CoreLogic. For these households, it would take nearly 12 years to save enough money for a deposit.

Rents and household bills have also increased. National median rents reached $540 per week, up $50 from a year earlier, while utilities rose 32% in the June quarter of 2021 and gasoline prices rose 30% in the year to December.

Homes in a residential area near Wellington. Soaring property prices and rents are compounding New Zealand’s cost of living issues. Photo: Xinhua/REX/Shutterstock

Melanie Watterson, a 31-year-old from Wellington who studies full-time and works part-time as an early years teacher, says the cost of living is “crushing”.

“To make sure I cover my electricity and cleaning bills, I have very little left and often have to go without food,” she says.

“Managing financially when I was working full time was difficult and since I was a student a year ago it became unmanageable. It’s very overwhelming.

When winter comes, those costs become “ten times higher,” she says. “Homes in New Zealand are often unsanitary, poorly insulated and have mold problems, so electricity bills end up being huge.”

For Joshua Mainwaring in Whakatane, his income could cover his rent but not much else. “I love so many 30-somethings who gave in and ended up at my parents’ house,” he says. “I had planned to go to university in Wellington, but the cost of rent there is so high that I have to take a gap year first to save money on my living expenses.”

Even the owners are struggling. Keith Marshall, a 74-year-old pensioner and widower in Auckland, says he is part of the “asset-rich but cash-poor” generation. His retirement pension has increased slightly in recent years, but not at a rate commensurate with the rising cost of living.

“I’m not talking about daily coffees, brunches, restaurants, takeout, online streaming services or buying the last thing you need on a credit card,” he says. “I can’t afford any of these things. My only social outing a week is to see a movie at senior citizen’s price.

New Zealand Prime Minister Jacinda Ardern said many countries are experiencing high inflation and things will start to
New Zealand Prime Minister Jacinda Ardern said many countries are experiencing high inflation and things will start to “better and subside” this year. Photography: Andy Jackson/Getty Images

Marshall carefully monitors his expenses using spreadsheets, but there’s still nothing left at the end of the pay period. “Unfortunately, if this rate of inflation continues or increases, I don’t see how I could continue to live as I do now. What that may entail, I dread to contemplate.

Over the weekend, the National Party vowed to drop government tax policies to help soften the blow from the rising cost of living, which its leader Christopher Luxon called a “crisis”. “The average Kiwi family is worse off than 12 months ago and the government must act.”

But Prime Minister Jacinda Ardern dismissed the idea that New Zealand was in a rising cost crisis, saying global pressures were driving high prices, not government policies.

“Yes, these times are tough. We’ve seen the impact of inflation, but we’ve also seen people predicting that we’ll get out of it throughout this year. Things will start to get better and easier,” she told Newshub. “We are experiencing high inflation, like many countries right now.”

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