Dear Izzy

lprent
7 years ago
Categories: superannuation, wages
Tags: consumer price index, statistics nz

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.