Exclusive: National loses control of cost of living to Labour in new survey
The latest Ipsos NZ issues monitor survey, conducted immediately after this year's Budget and obtained exclusively by the Herald, found National
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NZ Herald
3 hours ago
- NZ Herald
Shane Te Pou: Tāmaki Makaurau byelection a chance to test out campaign machine
No electorate belongs to any party and Peeni Henare (who was Tāmaki Makaurau's MP for three terms until he lost to Kemp by 42 votes) has every right to try to win the seat back. And, contrary to some claims that Henare winning would mean fewer Māori in Parliament, if he wins the electorate, Labour will have an empty list seat, with the next in line being the wāhine Māori Georgie Dansey. Labour's Peeni Henare was Tāmaki Makaurau's MP for three terms and is fighting to win the seat back. Photo / Mark Mitchell Having a contested campaign is good for Labour and Te Pāti Māori. It will allow both parties to give their election campaign machines a run and put forward their vision to people who have been hard hit by this Government's poor decisions and negligence. According to the latest census, construction is the biggest employer for Tāmaki Makaurau voters. It's also been a sector that's been hammered by the Government stopping large infrastructure projects mid-stream and cutting off funding for building more state houses. Oriini Kaipara is the Te Pāti Māori candidate for the Tāmaki Makaurau byelection. Photo / Supplied Fifteen thousand construction jobs have been lost in the past two years. Nationwide, the economy has lost 34,000 jobs in the past year and Māori unemployment is over 10%. Rising costs for basics such as food, GP visits, prescriptions, and electricity are hitting whānau who are dealing with job losses, all while being characterised as dole bludgers by a Government that seemingly has no solutions. With 79% of Tāmaki Makaurau voters renting, they're also feeling the pinch of continuing rent rises. The reality is most of our people work, but no matter how hard they work, even holding down two jobs, they just cannot get ahead in life. Many whānau live in overcrowded homes, with the constant spectre of having nowhere to live as the Government has brought back no-cause evictions and cut off access to emergency housing. Anyone who walks the streets of our largest city knows that the number of homeless people in Tāmaki Makaurau is growing, and many of them are Māori. Labour says its focus is on jobs, homes, health and the cost of living. Those are clearly key issues for voters, who are unimpressed by this Government's lack of delivery and their carelessness towards the hurt people are feeling. But voters aren't yet ready to fully embrace Labour – probably because of the lack of a vision and policy to go with those priorities. This byelection is an opportunity for Labour to start putting some meat on those bones and present themselves as an alternative government that people can trust with their vote. For Te Pāti Māori, holding on to Tāmaki Makaurau will be an important goal, to cement their hold on the Māori seats and prove that 2023 wasn't a passing high-tide mark, like 2008 was. It will also be a test of how they handle more mainstream media attention. Next year, National will spend a huge amount of money and energy trying to show that a vote for Labour is a vote for Te Pāti Māori and that they are too extreme to be let near power. It will be up to Te Pāti Māori to prove that fear-mongering wrong. Labour and Te Pāti Māori will need to use this byelection to show they can compete while keeping things civil and positive. Oriini Kaipara and Peeni Henare are excellent candidates, and I'm not making a pick on who will win. I am confident that whoever is elected will be able to represent our people well. I hope that the winner will work tirelessly for more jobs, more houses and better public services. Two years of cuts and negligence have left our people hurting. It's time for some hope.
NZ Herald
4 hours ago
- NZ Herald
KiwiSaver hardship reveals hidden cost of this economic downturn
We had news last week that KiwiSaver members withdrew more than $470 million for hardship reasons in the past 12 months amid continuing economic stress. Inland Revenue figures showed $470.7m was taken out of KiwiSaver in the June financial year, up 56.6% from $300.5m over the prior period. Looking back through the figures, there has certainly been a big spike in withdrawals in the past two years, but they have been on the rise for several years. Since Covid, both the number of people withdrawing funds and the amount withdrawn have risen steadily. As a barometer of the general economic situation, that isn't great. But the bigger problem with these hardship withdrawals is that the ultimate cost is (quite literally) compounded through the years. More than $1.3 billion of KiwiSaver funds has been withdrawn for hardship reasons in the past five years. If we do some back-of-the-envelope calculations and assume this money could have earned around 7% returns for the next 20 years, then we get a figure of more than $5b that will be missing from the nation's pool of retirement funds by 2045. Given the current trend of withdrawals, I suspect this is a conservative estimate. I understand why we allow withdrawals for hardship. It doesn't make sense for people to lose their homes or to go hungry when they have thousands of dollars sitting in a KiwiSaver account, so I'm not advocating that we stop allowing the withdrawals. However, there is a hidden cost and the situation highlights just how crucial it is for the Government to put more focus on retirement savings. There is a lot more money coming out of the KiwiSaver scheme to fund people into their first homes. Since Covid hit, an average of about $1.2b a year has been withdrawn from KiwiSaver for first home purchases. A home is an asset at least, and home ownership is an important step on the path to financial independence. I suspect we just have to accept the first home buyer withdrawals as a feature of the KiwiSaver scheme. If young people are in the scheme from the start of their working life and have $10,000 or $20,000 to put towards a house deposit, they are probably ahead of where many in my generation were at the same age. But the reality is that as a nation, we're well behind on where we need to be with our retirement savings. According to Stats NZ projections, the percentage of the population aged 65+ will increase from roughly 16-17% in the early 2020s to about 19-20% by 2030. By 2050, around 24-26% of New Zealanders are expected to be 65+. The old-age dependency ratio (ratio of elderly to working-age population) is expected to nearly double between 2020 and 2050. Our annual superannuation bill already comes in at more than $20b, and Treasury has projected that to rise to about $45b by 2037. According to Budget 2025 data, New Zealand Superannuation costs $4352 per person per year, making it the third-largest area of government spending after welfare ($6181 per person) and health ($5804 per person). From the Treasury's long-term fiscal projections, spending on NZ Super is projected to grow from 4.3% of GDP in 2010 to 7.9% in 2060, an increase of 3.6 percentage points. It is also rising as a percentage of the Government's total tax revenue – from about 17% now, it is projected to rise above 21% by 2037. So we know we have a problem. It seems almost certain that the age of superannuation will have to be raised to 67 in the coming years – despite the current opposition of NZ First and Labour. Future governments will almost certainly come under more pressure to means-test. KiwiSaver, which currently has total funds of $122b, is one of our great hopes. But the total figure is flattering. There are more than three million KiwiSaver members so the average fund size is just $37,000. Hopefully, that will be skewed by a lot of young people who will see their savings grow dramatically in the next decades. That brings us back to the downside of withdrawing funds early for hardship, though. We need to be saving more, not less. Moves by the Government to lift the default contribution rate for both employees and employers to 4% from April 2028 were a step in the right direction. However, they pale in comparison to Australia's compulsory scheme, which requires 12% employer contributions. The scheme has the equivalent of $4.5 trillion invested, making Australia the fifth-largest holder of pension fund assets in the world, not per capita but in nominal terms. Australia, for the record, also allows people to withdraw funds for hardship, but one suspects fewer people there need to. If we want to make the most of the KiwiSaver scheme we have, we need to look more closely at who is withdrawing their money and why. Meanwhile, young Kiwis are voting with their feet and joining the Australian Superannuation scheme ... by virtue of moving to work there. Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist, and also presents and produces videos and podcasts. He joined the Herald in 2003.
NZ Herald
4 hours ago
- NZ Herald
Heather du Plessis-Allan: We are being irrational about the price of butter
Unless you're into commercial scale baking, butter is not the thing putting the most pressure on household budgets. Try power. This winter power is costing the average household almost a block of butter every day. Or rates. That's costing the average Wellingtonian more than a block of butter every day. Those expenses have no alternatives. You have to pay them. With butter we at least have alternatives. If we don't like the price we can do a swap. I don't want to be Marie Antoinette but at least we have the option to switch to margarine. Not only have we abandoned logic, but also facts. Even the Finance Minister briefly took to complaining that butter is cheaper in Australia than in the very country that produces it. Except that's not true. At the time of writing, if you take Woolworths' salted butter, which is available both sides of the Tasman, adjust for currency and the fact the Australian Government does not charge their equivalent of GST on butter, we actually pay 30c less. Discounting butter domestically is impractical, as it would require subsidies, impacting farmers and shareholders. Actually, the price of butter is a good news story for New Zealand. Because if we're paying our farmers more, the world is paying our farmers more. And they're buying a lot more blocks of butter than we are. So that means they're paying a good chunk towards our tax take, our health, our roads, our schools. It's become slightly fashionable to suggest the solution is to discount butter domestically. That's a nutty idea. A discount is a subsidy. A subsidy has to be paid by someone. Who? Fonterra? The shareholders will probably object to that. Maybe, if this drama runs on long enough and there is enough reputational damage to Fonterra, it might be in the business' interest to cut the price to make the pain stop. That would not be a good day for farmers and shareholders. Miles Hurrell attributes the 46.5% rise in butter prices to global demand and supply issues. Photo / Alyse Wright The Government? Again, bonkers. If New Zealand is too broke to afford the full Dunedin hospital build, we're too broke to help commercial bakers afford their butter. The truth is there is no fix to the price of butter that isn't stupid or temporary. We simply have to pay the price that we pay. And the Finance Minister knows this. She knows this because she is a very clever woman. And because she worked for Fonterra for six years. Finance Minister Nicola Willis has turned butter into the cost-of-living symbol. Photo / Mark Mitchell So, she should never have turned butter into the cost-of-living symbol she has. This really started with her in April when she visited Costco and was taken by the fact it could sell butter for about half the price mainstream supermarkets were selling it for. It became her evidence that supermarkets were ripping us off. But then somehow, Fonterra got dragged into it and one of their regular ministerial briefings became a please-explain. And then the TV news was chasing the CEO Miles Hurrell around the forecourt of Parliament and going live to air while the meeting was under way. And there were expectations. And then nothing happened. And it has become yet another example of the Finance Minister, disappointingly, talking big but doing nothing. Just like with the retail banks. And just like with the supermarkets, so far. Spare a thought for Hurrell. The man is one of the most impressive Kiwi CEOs of his generation but had to spend his week cast as the villain of the butter story. There is no story. It's not even the biggest pressure on our weekly bills.
