It’s all the focus groups want to talk about.
Petrol, food, insurance, electricity, rates. The cost of everything has gone up and something must be done.
Looking back to 1990, everything was cheaper. Something has clearly gone wrong.
The party that can do the most to bring down the price-of-life should therefore win on November 7th.
NZ First would buy back the BNZ and break up the gentailers. National wants more supermarket competition. The Greens want a government-owned supermarket and will make university fees free. Labour will make GP visits free, cap the price of public transport and make it illegal for big companies to charge too much.
These ideas all sound good to focus groups. But how do they compare to policy in a country that has truly tackled the cost of living?
Which country has done the most to tackle costly life and what can we all learn from it?
There is no clear number one, but, by some measures, the answer is Nigeria.
A haircut can cost NZ$3, a night's accommodation NZ$20 and lunch can be picked up for NZ$2.
So how can we achieve Nigeria’s cost of living?
Nigeria has privately owned supermarkets, banks and hairdressers, so perhaps public ownership may not be the secret. GP visits are not yet free.
There are, however, other policies worth investigating.
Nigeria's minimum wage is about 50 New Zealand cents an hour, much lower than ours. Nigerian employment law provides considerably fewer protections for workers. The rules that regulate the environment and housing are a far cry from New Zealand’s RMA.
A sufficiently determined government could find opportunities to tackle the cost of living by copying some of these policies.
There is just one awkward data point for this international benchmark.
More than 40 percent of Nigerians live below the World Bank's extreme-poverty line. New Zealand's GDP per person is about 45 times Nigeria's.
Having very low prices does not necessarily make things affordable.
This creates a problem for our cost-of-living strategy. A NZ$3 haircut is not cheap if you earn 50 cents an hour.
There is another way to make things more affordable, of course. We could become more productive and earn more.
Unfortunately, "productivity crisis" hasn’t yet shown up in the focus groups.
So, for now, back to the supermarkets.
The party that can do the most to bring down the price-of-life should therefore win on November 7th.
NZ First would buy back the BNZ and break up the gentailers. National wants more supermarket competition. The Greens want a government-owned supermarket and will make university fees free. Labour will make GP visits free, cap the price of public transport and make it illegal for big companies to charge too much.
These ideas all sound good to focus groups. But how do they compare to policy in a country that has truly tackled the cost of living?
Which country has done the most to tackle costly life and what can we all learn from it?
There is no clear number one, but, by some measures, the answer is Nigeria.
A haircut can cost NZ$3, a night's accommodation NZ$20 and lunch can be picked up for NZ$2.
So how can we achieve Nigeria’s cost of living?
Nigeria has privately owned supermarkets, banks and hairdressers, so perhaps public ownership may not be the secret. GP visits are not yet free.
There are, however, other policies worth investigating.
Nigeria's minimum wage is about 50 New Zealand cents an hour, much lower than ours. Nigerian employment law provides considerably fewer protections for workers. The rules that regulate the environment and housing are a far cry from New Zealand’s RMA.
A sufficiently determined government could find opportunities to tackle the cost of living by copying some of these policies.
There is just one awkward data point for this international benchmark.
More than 40 percent of Nigerians live below the World Bank's extreme-poverty line. New Zealand's GDP per person is about 45 times Nigeria's.
Having very low prices does not necessarily make things affordable.
This creates a problem for our cost-of-living strategy. A NZ$3 haircut is not cheap if you earn 50 cents an hour.
There is another way to make things more affordable, of course. We could become more productive and earn more.
Unfortunately, "productivity crisis" hasn’t yet shown up in the focus groups.
So, for now, back to the supermarkets.
Paul is a Senior Fellow at The New Zealand Initiative, supporting our general advocacy and also working on resource management, environmental, land use and general economic policy. This article was sourced HERE
8 comments:
In the last 5 years the NZ dollar has devalued by 15%, plus or minus, against the currencies of our major trading partners. That's a significant change. Great for our exporters but the price of everything we import has cost us more to a greater or lesser degree. The dollar continues to track downwards. Supermarkets, fuel companies and others dependent on imported product can do nothing about this and ultimately those rising costs are passed on.
Comparing a first-world domestic economy with a third-world one really is rather silly.
Most people in agrarian developing countries operate as economic units in the so-called 'informal economy'. More than half the Nigerian GDP is generated by the informal economy (cf. c. 10% for NZ) and well over 90% of employment is situated there.
There are two domestic economies in such countries. 'Ordinary' people tend to generate income by a bit of buying and selling or doing jobs such as roadside tyre repairs and haircuts, and buy their food at local markets (informal). The more westernised people are in formal salaried employment and do their shopping in much the same way you and I do.
It's not comparing like with like so it really means very little.
We're a first world domestic economy? By the skin of our teeth, perhaps.
Paul, I fundamentally disagree with your article. As barend mentions, we cant really compare ourselves with Nigeria, its not realistic. Your final point is spot on however. Productivity. Getting the country moving.
I have stated many times that we DO NOT have a cost of living crisis. (Well we do if you are on a benefit and don't contribute, just as it should be. )
We have a HUGE ENTITLEMENT problem and inability to live within our means problem. This entitled and parasitic attitude is fully encouraged and promoted by the left parties and voters.
Case in point: I was at a dinner last weekend and there were clearly a lot of lefties whinging about pretty much everything, prices, power, banks, food, trump etc etc, I sat at that table for over 2 hours , discussing and dismantling each myth and trying to get these shallow thinking lefties to understand why everything is becoming so much more expensive. I never attacked them, instead i fired questions and self reflection prompts back so they had to answer. Once they realized they were tangled, and contradicting their own positions- rather than learn, they shut down. This is a shame, as the best people grow at this very moment, they open their eyes and minds to reality and move up a level to enlightenment. Just not these guys. Lol.
The vast majority I don't think grasped the fact that its the left that create the mess that they so despise, and slowly one by one, these guys left the table and formed another group.
Mission accomplished??, who knows, wgat i do know is that I don't think the left have the ability to grasp the stupidity of their thought process and patterns, so rather than change or learn they storm off. Bizarre.
My lesson i learnt: I dont really like fighting with dumb people (the left) as dumb people don't understand when they have lost!! Lol
In using Nigeria as the comparator, I think the author was using the Socratic approach of ‘reductio ad absurdum’ to make a point.
Anon 811, by "first-world domestic economy" I mean that it is subject to regulation and taxation i.e. it is 'formal'. Roughly 10% (according to Google AI) of the NZ domestic economy is 'informal' whereas the bulk domestic economy in countries such as Nigeria tends to be informal.
Anon 931: No, I think he is being more serious than that.
Anon 835: Let me quote Mark Twain: "Never argue with stupid people, they will drag you down to their level and then beat you with experience."
Barend - lol, your Twain analogy is spot on. It used to be me the one who left the table and found ' a higher quality of conversation ' but as the left have moved further left, I've quite enjoyed winding them up. The easiest way is to ask a simple question 'what is a women'. This still throws 99% of the left and really pisses them off. I just cant understand why. Lol.
But im a massive believer of getting this country moving again will resolve 80% of this countries problems.
The cost of living, while important, is not the most important issue of this election. It is racial division - He Puapua and the unrealistic place of the ToW in the modern world.
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