Dear Izzy

Written By: - Date published: 9:12 am, March 15th, 2017 - 27 comments
Categories: superannuation, wages - Tags: ,

I received this in The Standard’s inbox yesterday

Married couple, increase after tax $8.36 a fortnight each or $4.18 each a week!!!!! Disposable Income, 0.5971428 each a day !!!! Goes up on April 1st, how the hell did they arrive at this sum ? On the bright side, can have a treat and go to the movies on ‘Tuesday Senior’s Night ($7.50), and only spend $2.82 extra. Sadly the extra $4.18 a week will not allow the purchase of a $5.50 ice cream which is no longer affordable.

Regards Izzy

So being the fact driven fiend that I tend to be, I had a quick look around online about how ‘they’ decided to set the value at this value.

The rationale is described in the WINZ 2016 rate increase notice

NZ Superannuation and Veteran’s Pension rates will increase by 2.73 per cent on 1 April, so that the married rate continues to equal 66% of the average net wage.

Effectively in a married situation each person on superannuation receives only about a third of the net average wage.

So you’d better not be renting in Auckland. Apparently my apartment is now worth more than double based on recent sales in the block what it was then the last valuation was done less than three years ago, and rents here are up 50% and climbing rapidly.

The Ministry of Social Development that WINZ got folded into last year is somewhat more reticent about the calculation basis. There appears to be no such informative information. Just a bare list of rates.

Nor can I find anything about where the net average wage was calculated from.

I would have expected that it’d be from the Statistics Department’s New Zealand Income Survey. However their information releases currently only go up to June 2015 quarter and it was discontinued in 2016. Their new Labour Market Statistics releases are here.

However if you look at the annual rate of wage inflation for the December quarter, it was a derisory 1.6% for the year. That is probably the kind of data that your superannuation rise was based on.

Since the annual Consumer Price Index from December 2016 was meant to have only risen by 1.3%.

(WTF!)

  • The CPI inflation rate was 1.3 percent.
  • Housing and household utilities increased 3.3 percent.
  • Transport prices decreased 1.0 percent.
  • Tradable prices decreased 0.1 percent, while prices for non-tradables increased 2.4 percent.

I tend to do most of the shopping, cooking and a fair chunk of the bill paying for myself and my partner. I’d have to say that whatever world the statistics department is living in, it bears little resemblance to mine. The cost of running our place rose by more than 5% last year. I was looking through the bills of a friend of mine who is renting. Her total bills have risen by nearly 20% over the last year.

Anyway, I’d better get to doing some paid work.

27 comments on “Dear Izzy”

  1. Siobhan 1

    What I want to hear from Labour…a plan for MASS construction of Social Housing for all Life time renters…and at the very least, social housing for lifetime renters once they retire, or have certain medical conditions that leave them vulnerable.

    I mean seriously…how do people live?

    How do little old ladies and singles with dodgy knees, and old men with emphysema and gout..how on earth do they keep going in this rental market?
    How on earth do they even manage to move their belongings from one hovel to the next? As a home owner you include the cost of a removal van in your price….renters sure don’t.

    It just beggars belief that we have become such a brutal country.

    • Draco T Bastard 1.1

      It just beggars belief that we have become such a brutal country.

      Such brutality seems to be part and parcel of the capitalist system. We can see it throughout history. Top down hierarchical systems are oppressive to the majority of people. They have to be to maintain the ongoing theft from that majority that’s used to make a few people rich.

      • greywarshark 1.1.1

        DTB
        Actually you miss a vital point. That money taken from people which they need to have a life actually goes people already rich, not to make them rich. It is to make wealthy people richer, or enable them to buy bigger and more expensive things, ie they can buy trips to the moon, literally. We’re in The Cloud in the computer age, the Cuckoo Cloud. And still the meme is peddled about how marvellous our age is. It’s a bloody marvel all right.

  2. Draco T Bastard 2

    I tend to do most of the shopping, cooking and a fair chunk of the bill paying for myself and my partner. I’d have to say that whatever world the statistics department is living in, it bears little resemblance to mine. The cost of running our place rose by more than 5% last year. I was looking through the bills of a friend of mine who is renting. Her total bills have risen by nearly 20% over the last year.

    It’s the magic of averages and lying with numbers.

  3. Kay 3

    And I’m anticipating for the 5th year running that those on Supported living Payment (ie seriously ill/disabled) will not get a single cent, based on the CPI or something like that not increasing, or whatever pathetic excuse they can come up with this year. Oh the luxury of being a pensioner /sarc, that $4.18 would almost cover the surcharge for one of my medications.

    Happy April Fools Day.

  4. April 1st is like April fools day.

    We get an increase in our pension rates alright, but every Utility and Companies like Insurances and Council Rates also increase at the same time which combined, exceeds the value of increased Pension rates.

    So in effect, every year we are going backwards.

  5. Molly 5

    I was reading a critique of the CPI once (sorry, can’t recall where) where it stated that any “volatile” changes in any of the items would be flattened (ie. ignored) in the expectation that it was an anomaly for that particular timeframe and would be averaged out over a longer period.

    At that time, petrol prices were rising significantly, along with utilities but the CPI remained steady.

    The example you give of rents – gives an indication how flawed this indicator is.

    The fact that it is used by both governments and employers to justify reduced benefit, salary and wage increases means that many of those beneficiaries and employees are playing a losing card against the unavoidable rising costs of living in NZ.

  6. Ad 6

    When older people are existing on such wafer-thin financial margins, it sure illustrates how foolish it was for English to needlessly open up the superannuation debate in election season.

  7. adam 7

    In one year we have gone from doing it tough, to really struggling. Rent has gone up by $40 dollars and has wiped us out, we can’t move becasue rents are even higher elsewhere. Gotta love this new Auckland.

    The power bill is up by 9%. The water bill by 5%. Internet by 15%. Where is this money for rent suppose to come from? Wages are stagnating. Thank goodness our doctor is cheap and good. But medications going from $3 to $5 wiped our any chance to save.

    The lie that says inflation is at 1.3% is a out right lie. But then again, lying is the new normal from conservatives.

  8. greywarshark 8

    No information or stats available on important government policies or history of past information, records that should be archived. Way to go. How to govern a country into a banana republic, that eats tonnes of bananas, that it imports? (A perfect example of our fucked-up country’s economy and system of government.)

    One way is not to bother with statistics. In Alice in Wonderland words are what the being in power decide they are – and that would include important statistics too.

    In NZ we don’t have a poverty level that has been set at some rational measure. That means that government can deny any claims because ‘we don’t have definite, reliable figures, so how can the critics claim poverty’.

    Do you accept that, in a modern, educated country that keeps records and has 1,000s tonnes of computers, hard drives and other electronic machines built to store and assist with measuring and counting and recording? What are you if you do, primitive man and woman?

    So your rabid, rancid politician, leader, one of the elite powerful or serving such, just doesn’t want to know effective, advisory stats, and instead announces sweeping decisions on the basis that “People are telling me this is what they want”.

    A second way to deal with annoying statistics and records: Throw the stuff out. It is just an annoying waste of space and irrelevant to what should be done today.

    Learn from other western countries’ politicians who don’t give a damn. Follow the behaviour of long term Prime Minister Harper, a Canadian clown, (the profession from which many politicians now arise from).
    https://www.vice.com/en_ca/article/the-harper-government-has-trashed-and-burned-environmental-books-and-documents

    Wikipedia covers this in its page on Harper, Canadian PM 2006 to 2015. (Nine years of faulty damaging politics can ruin a country!) –
    https://en.wikipedia.org/wiki/Environmental_policy_of_Canada
    (Note that it is important for us to keep control of our local governments):
    The report says that environmental improvements in Canada proclaimed by Harper were largely achieved by provincial governments.)

    • Kay 8.1

      Somewhat ironically those imported bananas are always way cheaper than local fruit in supermarkets meaning they’re the main (and often only) fresh fruit pensioners/beneficiaries can partake of.

      • greywarshark 8.1.1

        Yes god for cheaper fruit. If more people can organise food buying clubs and arrange to get buys from organic orchards as first preference, or spray free or even ordinary, you can save a fair amount I believe and also buy some dry goods in bulk and split up. There are quite a few food clubs around. You might even get a box of bananas cheap too.

        Also if you know your neighbourhood and see fruit dropping with nobody at the property using, you could ask to pick up and take to the club. And find out from your Council if there are any food trees planted. An olive tree I pass often dropped most of its fruit on the pavement. They take a bit of skill to cure I think but then last for ages.

        It’s a good way of coming together, but you may have to structure it so that it isn’t just a quick visit, with no friendly greeting, or group interaction. No use having community arrangements if you don’t bother to say hello and how’s your day. They can do that pleasantly at the supermarket, and looking for cheaper food isn’t the be all and end all to life. It’s forming friendly interacting relationships.

  9. feijoa 9

    Yes.
    we are being lied to

  10. Wayne 10

    In my view 2.73% is not a bad increase in the circumstances. It reflects that wages went up by that amount last year. Given that inflation was 1.3%, why is this terrible, or in the words of Draco, proof that NZ is a brutal country?

    As an example Auckland rates went up 2.5% in 2016 which is less than 2.73%. Food inflation was 1.5% in 2016. In short Stuff the Politicians is wrong. Overall those on National Super are not going backwards.They are holding their own or slightly increasing.

    Would Labour, or the Greens boost National Super to more than 66% of average wages?

    However I would concede if the only income a person has is NS, it is a basic income. If rent is paid it will definitely be difficult, although presumably there is accommodation supplement.

    This is precisely why Labour promoted Kiwisaver, to ensure that most people when in retirement would have more than the basics.

    • McFlock 10.1

      The annual adjustment of superannuation is calculated according to stipulations in the New Zealand Superannuation and Retirement Income Act 2001.

      edit: crap – first stuffed the link, then meant to put it as a top level comment rather than reply. Need to focus on work I think 🙂

    • lprent 10.2

      Perhaps I didn’t make it clear.

      The quoted 2.73% increase was from April 1st 2016.

      By a simple inspection, this year’s increase obviosly looks like it is no more than 1%. You’d have to calculate it, as it wasn’t what I was asked. I was asked how it was calculated.

      The best example I could find in a rush for the net average wage was that wage inflation was about 1.6% over the last year.

      • Wayne 10.2.1

        On re-reading the main item I did see it referred to 2016. I missed it the first time and assumed there had been an announcement for 1 April 2017, which must be due about now.

    • lprent 10.3

      Ok. Does anyone know if there is accomadation supplement for superannuation (I am on my phone eating lunch 😀)

      • Wayne 10.3.1

        It has just been announced that this years increase in NS for a married couple is $10.12 gross, so about the same as last year.

        The same document also stated that Accommodation Supplement is available with superannuation.

      • Ross 10.3.2

        There are supplements available including AS, Temporary Additional Support and a Living Alone Payment.

        Someone living alone who receives Super is paid $769.52 (net) a fortnight but I don’t know what they’d get paid if they were renting and had no assets. Maybe someone can help?

    • Carolyn_nth 10.4

      In my view 2.73% is not a bad increase in the circumstances. It reflects that wages went up by that amount last year. Given that inflation was 1.3%,

      My Auckland rent goes up by 5% every year. Then there’s power and water rates always sneaking up.

  11. dukeofurl 11

    Its intriguing as Stats NZ seems to be moving its goalposts for collection of income details

    “After consulting users of the NZIS and weighing up the costs and benefits we decided to integrate the NZIS content into the Household Labour Force Survey (HLFS).

    We also decided that:

    The NZIS will be discontinued after the June 2015 collection.
    From June 2016, information collected from the current NZIS about income from wages and salaries, self-employment income, and government transfers will be collected as an income module within the HLFS.

    The HLFS is used for deciding who is working , and so on, eg Unemployment rate.

    Looking back for other figures using the phrase ‘average net wage’ showed this
    ‘Figures from Statistics NZ show as of March this year[2013], the average hourly wage was $27.48 or $57,158.40 per year.

    the current gross NZS couple rate is $681.60 pw or 35,443.20 per year when the back calculation ( divide by 0.66) says that the average net wage which gives this figure is
    $53701.80,

    Yet 3 years ago the net yearly wage was $57k?

    Looking at the lastest stats gives these numbers
    http://www.stats.govt.nz/browse_for_stats/income-and-work/employment_and_unemployment/LabourMarketStatistics_HOTPDec16qtr.aspx

    Average ordinary time hourly earnings $29.75 +1.3% ( annual change)

    plus the Average weekly paid hours (FTE ) 37.97hr
    Taking those to give the Average weekly income we get $1129.60

    There is no way this is connected to NZS couple gross rate of $681 pw by the 0.66 factor.

    Whats missing here ?

  12. Chris 12

    Benefit rates have essentially been based on figures plucked out of the air since they were no longer based on the cost of living, which was 30 or so years ago. Add the 1991 benefit cuts to that and they become more meaningless. Add the ongoing decimation of other parts of legislation that both National and Labour governments were hellbent on exacting such as an increasingly punitive administration, more stringent criteria for the ever-growing need for add-on benefits like special needs grants etc and a culture of denial and intimidation within Work and Income and…well…the results are obvious.

    The writing was on the wall back at the time of the cuts in 1991 when Labour did a u-turn on its promise to restore the benefit rates that the razor gang of ShipleyRichardson/Bolger whacked through with the ECA and market rents. Labour eventually patched up the latter two but left the cuts to benefits in place, then went on to do some pretty serious structural damage to what NZ always believed was a pretty comprehensive safety net. If only we could see back then what Labour’s refusal to restore pre-1991 benefit rates was going to develop into.

  13. Andrea 13

    Married couples get the 66%. Singles don’t. They get less.

    Funny thing, though. None of them gets power or rates or phone or dentist, podiatrist, etc at a reduced rate. But no. The same rate as people with a bigger income – despite being unable, in many cases, to supplement that income with even a part time job.

    If a long ago National Party hadn’t danced Cossacks across tv screens, perhaps, maybe all those feckless, filthy rich, had it so good and every shearing shed hand was a secret PhD, Baby Boomers would not be awaiting genteel poverty aka Superannuation.

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