NEW GOVERNMENT MEASURES WILL NOT REDUCE ECONOMIC HARDSHIP FOR MANY

While the cut in the fuel excise level is getting the headlines, it will do little to ease the economic pressure on many New Zealanders, faced with escalating rents and steeply increasing prices at the supermarket. And, as of April 1, many New Zealanders will see their electricity bills increase. 

SEVERE AND continued economic hardship is something a growing number of New Zealanders have been forced to endure throughout the term of this Labour Government. Their dire economic circumstances have largely ignored by a Government whose leader has continued to repeat her mantra of 'kindness' even as she has, during this pandemic, bailed out the top end of town to the tune of $20 billion while providing next to nothing for those struggling to put food on the table each week. It reminds us of Winston's reflections on doublethink in George Orwell's 1984:

'To know and not to know, to be conscious of complete truthfulness while telling carefully constructed lies, to hold simultaneously two opinions which cancelled out, knowing them to be contradictory and believing in both of them… To forget whatever it was necessary to forget, then to draw it back into memory again at the moment when it was needed, and then promptly to forget it again… that was the ultimate subtlety.'

In the jaundiced view of loyal Labour supporter Chris Trotter, the Labour Government has been able to largely disregard the scourge of poverty stalking the land because it has been to its political advantage:

'That neither Labour nor the Greens any longer pay much attention to the bottom third of the electorate is largely due to the fact that, apart from the loyal votes for Labour that appear to be welded on to the party regardless of its deficiencies, there just isn't enough in it for them, electorally, for them to respond to their needs.'

But its exactly because of electoral considerations that the Government has chosen to respond to what the National Party has deftly packaged as a 'cost of living crisis' and which the media has ran with. With the latest poll showing National moving ahead of Labour for the first time and with economic 'bread and butter' issues beginning to push the pandemic off centre stage, Labour has belatedly realised it can no longer continue to 'see no evil, hear no evil, speak no evil' and not expect damage in the opinion polls.

So with the public clamouring for action on escalating fuel prices, the Government has cut the fuel excise levy by 25c/litre for three months and road user charges by the same amount, although this will take longer to implement. As well bus and train fares will be halved from April 1.

While these are the measures that are getting the headlines - which is what the Government wants - they will do little to ease the economic pressure that many New Zealanders are under. 

Last week it was reported that some landlords are being told to put up their rents 20 per cent or more by property managers who say bigger increases are needed now that rents can only be adjusted once a year.

There's also little hope that prices at the supermarket won't continue to rise and food banks, once viewed as a temporary social phenomenon, will continue to play an essential role in simply preventing many folk from going hungry. 

Jacinda Ardern was careful to highlight the raft of benefit increases that will come into play on April 1. But they won't go anywhere near to ameliorating the severe economic circumstances that many are confronting. At best, they will allow folk to keep their heads just above water - for now.

Ardern wanted to remind people that as far as energy prices go, the winter fuel allowance of $20 begins again on May 1 for three months. What she didn't mention though is, as of April 1, at least 40 percent of Kiwi households will see a jump in their power bills as the electricity industry, with the blessing of the government, does away with low-use plans. 

Those whose power use is very low will be hardest hit. As part of the phasing out, power companies will be able to double the daily fixed rate for low users from 30c a day to 60c a day, which works out to an increase of around $110 over the next year. Letters went out to consumers some three weeks ago informing of the 'change'. 

Paul Fuge, the manager of Consumer NZ’s energy price comparison website Powerswitch told RNZ  that elderly people are the ones who will obviously be hit by the higher rate as they don’t use much power. 'It’s a worry because it’s not like they’re getting a pension increase of $100 each year, Paul said. 

But wait. There's more. For folk currently on low fixed charge rates, prices will continue to rise each year for the next four years.  A consumer currently paying 30c a day ($110 a year) for lines charges can expect to be paying $1.80 a day (around $660 a year) in 2026.  

The $20 winter allowance is not going to prevent more New Zealanders being plunged into energy poverty.