The reserve bank has lifted the official cash rate up another 25 basis points to 3%.
For the average Auckland mortgage holder ($400,000 mortgage) that’s an extra $20/week taken out of their pockets, which means they are now over $1000 a year worse off.
Add that to the 25 basis points added near the start of the year and that makes the tally (so far) over 2000 bucks a year worse off.
And apparently that’s just the start of interest rate rises. According to the Reserve Bank, this tightening cycle will likely top out at an overall increase of 200 basis points or 2%. For the average Auckland mortgage that’s an additional cost of $160 a week or over $8000 a year.
National’s response? Not bovvered.
But those cost increases shouldn’t matter because the economy is growing and we’re all going to benefit from that, right? A rising tide lifts all boats, right?
Well maybe it would if we could all share in the growth but National’s anti-employee policies mean that very few of us will benefit from the forecast economic growth. In all likelihood, the heavily indebted NZ public is only going to suffer the pain of increased housing costs with slim chance of an upside.
The right loves the bogus ‘wages go up with productivity’ line but in reality National’s rotten labour laws mean productivity and growth gains are rarely shared with employees.
Thursday night’s TV 1 news piece on the OCR rate increase features CTU economist Bill Rosenberg, near the end, commenting that productivity in New Zealand has gone up 10% from 2009 to 2013 and yet wages have only risen a miserly 0.6%.
As Bill says in a recent media release, “the focus should be on getting housing costs down, and raising wages to make housing more affordable.”
Sorry Bill, that ain’t ever gonna happen under a National government.
The Orivida National party has put most of its economic weight behind the dairy industry but as
this RNZ piece illustrates, even in the rockstar dairy industry, employees are getting screwed.
That story refers to an MBIE labour survey conducted in August last year which found 3 farms in Southland that were found to have underpaid their workers. But what the RNZ piece fails to mention is that it was actually 3 farms out of 10. So that’s 30% of farms in the survey failing to comply with minimum employment rights.
These are the natural consequences of National’s perverted policies, folks suffering even during times of economic growth. The only possible silver lining from this will be if people finally see through the thin veneer of John Key and appreciate the full, ugly vista that is a National government.