Amy Adams: Rising living costs and a slowing economy – NZ deserves better

Opinion 11/04/2019
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By Amy Adams, National’s Finance spokesperson.  

Higher costs of living - like rents, petrol and electricity - coupled with slowing economic growth are a double hit for New Zealanders.

These two trends have emerged since the last election and the Government needs to accept its share of the blame.

Despite all its talk of fairness and wellbeing, there is nothing fair about the impact this Government’s decisions are having on New Zealanders.

The Government’s fingerprints are all over rent increases which have jumped by an average $50 a week since the election. It has added taxes to fuel prices that are again on the rise and it has put New Zealand on course for electricity prices rising far more than they need to.

It is the job of the Opposition to hold the Government to account and as we’ve said many times, this Government may have good intentions but its delivery is making life harder for many.

Take rising rents. They’ve jumped $2600 a year under this Government while for the entire nine years of National, the median weekly rent only increased by $12 a year. Government decisions account for much of the difference including the extension of the bright-line test, ring fencing of losses, more onerous and expensive regulation and the ban on foreign investment.

National understands the Government was worried about housing affordability but its decisions have driven up rents instead.

This makes it harder for families trying to stretch every dollar further and makes it harder to save for a home.

The price of petrol has risen about 10 per cent this year and New Zealanders are feeling that at the pump. But it didn’t have to be this bad – Across New Zealand, the Government has increased petrol taxes with more increases planned this year and next. In Auckland motorists are paying an extra 14 cents a litre because of new taxes. It is adding to the costs for families taking their kids to school, going to the supermarket or getting to work.

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Many New Zealanders will already have noticed power prices going up. Genesis Energy, New Zealand’s largest electricity retailer, raised prices across the country in January.

Whatever the short-term factors, the Government has put electricity prices on a rising trend with its oil and gas ban, which was ideologically driven and limits our options to become a low-carbon economy. Meanwhile, New Zealand is burning more coal to keep the lights on.

If this Government was only guilty of unintentionally driving up the cost of living, it would still deserve to be called out.

But its poor economic management is contributing to weaker growth and that means fewer jobs and opportunities for Kiwis.

The Government has shut out foreign investment and wasted billions of dollars on failed policies, leaving it scrambling to find more money. Taxpayers are being asked to bankroll its blunders. It is shackling our businesses to rigid labour laws and is pushing for compulsory, centralised awards.

Now it wants to widen its tax net with a Capital Gains Tax that would punish our innovators and entrepreneurs and increase the burden on our small businesses, farmers and those saving for retirement. An impartial observer might think the Government is anti-growth.

National, on the other hand, has a proven track record as competent managers of the economy. We understand that we need a productive, growing economy to meet the needs of all New Zealanders. We back our businesses to compete on the world stage if the Government doesn’t hold them back. 

Amy Adams is National’s Finance spokesperson.