Stories about surging inflation, successive food price rises and more Kiwis in arrears topped bulletins and filled front pages last year. But recent news about slowing inflation, cheaper food and rising business confidence hasn’t had the same impact. How come?
Within the last month, surveys finding business confidence rising and food price inflation falling for the fourth consecutive month made few headlines.
But the bad news still does.
Last Thursday, TVNZ’s 1 News told viewers “New Zealanders are getting behind on payments”.
“More than 400,000 people fell behind on credit payments and the number of mortgage accounts past due exceeded 20,000,” it reported.
This was also based in the latest monthly report from credit agency Centrix, showing 4000 more Kiwis in arrears than a month earlier.
But last year more people were in arrears - and in 1 News’ own report this week Centrix explained the season was the reason for the latest modest monthly uptick.
“People tend to spend money and incur credit prior to Christmas. And it then comes back to bite them early in the new year,” he explained.
Now you mentioned it, what happened to the election promise to change this? Are pensioners getting a pay cut?
Pensioners will be fine. The Govt’s election promise was to stop benefits from rising at the same rate as wages and pensions.
They announced it in Dec, it will come into effect on April 1.
So basically SLP etc won’t get cut, it will just fall further and further behind.
(How they describe it in that article is disingenuous, because it’s well-known that inflation for low income households is higher than the CPI, and that long-term wage inflation is higher than the CPI as well. Which is why doing this to pensions would have been political suicide).
I had thought it was National but it was actually an Act policy: https://policy.nz/2023/party-vote/policies/incomes-and-employment/subtopics/superannuation-and-savings
I’m guessing it didn’t make it into the coalition agreement then.
I just had a thought (tangent to this conversation), why are the options for super affordability seen as “raise the age of entitlement” and “do nothing”. Instead of “raise super entitlement age to 67”, where is “income test super from age 65 until 67”?
I didn’t realize ACT wanted to do that. It would never fly, it would effectively make the average elderly New Zealander worse off with pensions effectively worth about 9% less over just 1 term of government. National campaigned on only doing it to beneficiaries.
Re: the conversation about affording Super, I think part of the problem is New Zealand has this obsession with tax simplicity. Which is nice in some ways but that’s how we ended up with such an unforgiving GST regime (which forms an unusually large component of govt revenue by OECD standards). Similarly, means testing is probably seen as too high in compliance costs.
The government has far more income data than they did 20 years ago. I’d guess those compliance costs would not be as high as they once were, and by growing the means-tested base you can scale up slowly and sort out any growing pains. Plus, think of the savings in superannuation!
Or I guess you could think outside the box and revert anti-smoking schemes so people die younger and so you have to pay less superannuation.
I think your plan (the first one ha ha not the smoking) is a good one, and totally achievable.
To afford it, MSD could switch their means testing assessments to once per tax year (instead of using two random overlapping 52 week periods per year which don’t coincide with the tax year). That way they could use IRD data.
I can think of heaps of problems with that method, but nothing strong enough that I don’t think a working group couldn’t sort out answers to them.
Personally I just want to raise taxes, pay UBI that counteracts that raise, and get rid of WINZ (or more likely, a smaller, more specialised agency). Means testing super is kinda moving away from that goal.
But we probably need young people to vote if we want to stop old people making all the laws.