OnPoint by Keith Ng

75

Media beat-off

It's time to pull the brakes on the latest

...the average household with 2 kids and a NZ$170,000 mortgage is now $38 a week worse off in the last four years because higher food, petrol and mortgage costs have overwhelmed wage increases and Working for Family tax breaks over that period.”

He compared the same household using the same methods, noting the difference between the two, but not going any further. Whereas the SST say:

Where four years ago a family on the average income could each week expect to earn $23 more than it spent on its bills, that figure has now fallen below zero to $15 in the red.”

What's “in the black” and what's “in the red” is simply arbitrary. If we change assumptions about taxes (e.g. Income split between two earners, etc.), or the mortgage, we could easily make both “in the black” or “in the red”. Which means that you definitely can't say things like:

People wanting to maintain the living standard they enjoyed four years ago are being forced into debt or must face the difficult task of sacrificing day-to-day items.”

Which is, plainly and simply, un-fucking-founded.

But one conclusion can be clearly drawn from the analysis: Mortgage, mortgage, mortgage. The biggest change in the four years is the cost of servicing the mortgage.

In 2004, spending on food was 15.6% of after-tax income. In 2008, spending on food was 15.4%. Expenditure on food has not grown faster than income. Petrol has, but remains small: from 4.4% in 2004 to 6.1% in 2008.

Mortgage costs, on the other hand, has risen from 24.7% of after-tax income in 2004 to 29.8% in 2008, according to Hickey's figures.

The upshot is that, before we start going on about food prices, GST and so on, let's keep our eye on the ball here: Housing cost is the biggest and has risen the fastest. So let's talk about interest rates, not bloody cheese.

--

The biggest BS of last week would have to go to Richard Prebble:

Mr [Richard] Prebble said it was a myth to say rail was environmentally friendly if the production of rail, locomotives and the need for trucks to take goods to destination were counted.” – 75 responses Email

75 responses to this post

First ←Older Page 1 2 3 Newer→ Last