Life's tougher by at least $30 a week for average Kiwi family
Hard-working New Zealand families will have to get some relief in next week's Budget after a very tough start to the
year, according to figures released today by Opposition Finance spokesperson Bill English said today.
"The average New Zealand household is worse off by $1500 a year, or $28.24 a week thanks to higher mortgage rates,
higher petrol costs and more expensive cigarettes.
"That's an extra bill of just on $30 a week, which is a big hurdle to face when you're on an after-tax household income
of about $750 a week, which is the average.
"Working families facing these costs will be looking for the Budget to help them make ends meet. Since 1996 they've been
used to Budgets putting more money in their pockets, through tax cuts and credits and programmes such as family support.
This time around they are expecting a lot from a Government that has raised expectations.
"But this Budget looks like containing nothing for ordinary, working families. The millions that Dr Cullen will dish out
will be great for his special causes, but do nothing for ordinary families.
"The extra $30 a week is just our initial cut of the effect of economic decisions and trends on household budgets.
"The tariff freeze will add even more to family's costs. For years now households have become accustomed to cheaper
goods including clothes and shoes - but the tariff cuts have been stopped midstream. They will be paying about $11a week
more in bills than they would have if the tariff cuts had gone ahead.
"Added together these extra costs will be piling $2077 a year, or just on $40 a week, onto the bills faced by ordinary
households.
"New Zealand was perfectly positioned to make a strong start to the new millennium. In six short months, the Government
has turned that around and ordinary New Zealanders are paying," Mr English said.
Ends Inquiries: John Goulter 025 232 4303
The Average Working Household
The average household income (before tax) is $49,225 per annum, or $944 per week. After tax roughly $750 per week. Since
the start of the year, the average household has had to contend with:
$ Impact on average household budget Total per annum impact on average household budget 12 cent
increase in petrol prices (January price of premium 96.9 cents - $108.9 cents today) $514 more per annum
Increased interest costs $900 per annum on $60,000 mortgage $1 increase in price of pack of
cigarette $86 per annum $1500 per annum $28.85 per week
Tariff Freeze $11 per week - $572 per annum $2072 per annum $39.85 per week
5.3% of the average net household budget *The average household is based on the Household Economic Survey
1997/98 - average number of occupants 2.71 and average income of $944 gross/week. *The tariff freeze. The NZIER has
calculated that if the full phase out of tariffs had occurred, households would have benefited by $42 per week or over
$2000 per annum. Freezing the tariff reductions midstream will freeze the benefits to households at $31 per week,
costing households $11 per week or $572 per annum. *As well as these numbers that have been easy to quantify, there are
a whole raft of other pressures out there. In particular, the weakness in the New Zealand dollar is adding to pressure
for prices rises for imported goods, including overseas holidays, union membership fees (est. at $10 a week or $520 a
year).
ends