Ardern muddled, middle missed

In an interview just before the election Jacinda Ardern referred to the ‘squeezed middle’ – ordinary New Zealanders ‘feeling the pinch’.

Stuff: Jacinda Ardern says Budget will also help middle New Zealanders feeling the squeeze

New Zealand knows it has poverty issues, and an emerging class of working poor, but we’re not paying enough attention to the “squeezed middle”, Jacinda Ardern says.

On Wednesday, Ardern said as well as helping those in poverty, and the working poor, the Government also needed to help those middle New Zealanders feeling the pinch.

“There is this other cohort of people who just feel like some of these services aren’t accessible, and we don’t pay enough attention to that,” she said.

Ardern was referring to people who were working, but were feeling the squeeze due to a range of factors, like high housing costs.

And while unemployment is at its lowest in a decade – at 4.4 per cent in March – wage growth has stagnated, meaning after costs, a growing number of households had barely any discretionary income.

Ardern said there would be something in Thursday’s Budget – likely a more targeted approach to cheaper GP visits, with the universal discount being phased in.

All well and good, but I have not seen anything significant in the budget that helps middle New Zealanders who are struggling with low wage rises, escalating costs for housing and for things like petrol, if they don’t have dependant children or already rely on state assistance.

Working New Zealanders without dependant children (so they don’t benefit from the increasingly generous ‘Working for Families’ will feel that the pinch is still on after the first Labour-NZ First-Green budget.

Labour scrapped the tax cuts that were due to kick in this year. Bracket creep effectively means that tax rates keep gradually rising.

Many middle New Zealanders have missed out on reduced taxes, but will keep contributing to the ‘redistribution of wealth’.

Ardern has missed the mark with her pre-budget comments, and the Government has missed the middle mark with their budget.

26 Comments

  1. artcroft

     /  May 18, 2018

    A good post Pete.

    • PDB

       /  May 18, 2018

      Indeed – the big issue here is the ‘middle’ are going to be really squeezed once the farce of a tax working group suggests they pay even more tax.

      • Kitty Catkin

         /  May 18, 2018

        I’d change ‘missed’ to ‘excluded’.

        • Gezza

           /  May 18, 2018

          … and that would ruin it completely. … “muddled middle missed” is a word play. Is it alliteration?

          • Kitty Catkin

             /  May 18, 2018

            Yes, I can’t think of a word beginning with m that means deliberately excluded.

            Middle munted ?

            Manipulated ? Made use of ?

            Milked ?

  2. alloytoo

     /  May 18, 2018

    Ah wait to the petrol taxes kick in in.

    • Blazer

       /  May 18, 2018

      whatever happened to the rights ‘user pays’ mantra…!

      • Gezza

         /  May 18, 2018

        The difference, & the problem, is that we don’t just pay the levy with our own cars, with goods, the driver or employer pays & then passes it on to everyone down the delivery chain, & ultimately the car owner & pays again.

        • Blazer

           /  May 18, 2018

          I look at it this way…since the ‘oil shock’ in the 1970’s we have been at the mercy of oil price fluctuations over which we have little control.From $50 to $170 barrel prices in the last decade shows the degree.
          By shopping around and using your vehicle less,the effects of levies can be ..negated.

          • High Flying Duck

             /  May 18, 2018

            And yet wherever you shop, it will cost more.
            But at least Dominion Road will get a tram,

            • Blazer

               /  May 18, 2018

              well ,I use apx $180 fuel a fortnight.2X $40 fills and then a full tank fill…equates to 22c a litre save on the full tank fill.
              As for trams,very popular in metropolitan centres from Lisbon to L.A.

            • Grimm

               /  May 18, 2018

              Only popular with Fools and Horses. Everyone else has to pay the billions in subsidies to keep them going.

            • Kitty Catkin

               /  May 18, 2018

              User pays is one thing, non-users paying for users as will happen in rural areas around Auckland where people will pay the extra tax and have no access to the supposed benefits thereof is another, different thing.

            • phantom snowflake

               /  May 18, 2018

              Oh dear, Kitty! What you are bemoaning is mainly due to the introduction of the ‘Supercity’ model by your mate Rodney…

            • PDB

               /  May 18, 2018

              In theory the Auckland Supercity should have worked but unfortunately whilst people like Brown & Goff have been in charge all possible savings have been squandered and projects implemented that heavily favour the CBD and surrounding inner suburbs.

            • phantom snowflake

               /  May 18, 2018

              @PDB: As you are well aware; in New Zealand our mayors do not have ‘presidential powers’. Apart from the rare ‘casting vote’ scenario, mayors have precisely the same number of votes as each councillor; 1!

            • PDB

               /  May 18, 2018

              They are still in a leadership role but have given no indication that they truly believe/d of living within their means. One of the worst things this govt has done is open the door for regional fuel taxes which many councils will now adopt in order to continue to waste money whilst still giving no relief to ratepayers.

              It also goes without saying that the majority of Auckland Councilors during this time were also on the same page as Brown/Goff and are equally guilty of undermining what the Supercity could have achieved.

            • Gezza

               /  May 18, 2018

              Time a few senior Council staff down here were hauled out of their desks, after the locked doors to their fortress had been broken down, & they were hurled into the harbour.

              Not Greta though.

  3. lurcher1948

     /  May 18, 2018

    Bring back sir key and bill english WAIT they are been rewarded by being put on boards for selling out to big business and lets not mention crusher who speaks for china, the trough is bigger when you sell out NZ, AND THATS A FACT PG

    • lurcher1948

       /  May 18, 2018

      will it see the light of day,nah

    • Gerrit

       /  May 18, 2018

      If it is a FACT you no doubt will have references to back up the “factual” claims you make.

      Without verifiable facts, you are making a supposition based on your bias.

      Whilst you (and no doubt everyone you know) holds a belief that Key, English and Collins did not act in the best interest of NZL, it is your opinion based on nothing.

      • Gerrit

         /  May 18, 2018

        If you have those undisputed FACTS, Lurcher, you need to take them to the police as it would show Key, English and Collins to be corrupt.

        And corruption is against the law, you have a duty to present the FACTS to the public so prosecutions can be made.

        Will you?

        • Blazer

           /  May 18, 2018

          it is fact that Key,English and Coleman have gone to work for private corporations.

          • Gerrit

             /  May 18, 2018

            Yep so they have…however Lurchers claim was quote, “rewarded by being put on boards for selling out to big business” whilst they were paid and employed as NZL politicians .

            What they do and whom they work for after their employment ceased as NZL politicians is entirely their own business.

            So if Lurcher has proof of the facts they were in the dual employ of business and the NZL tax payer he needs to present that to the Police so corruption charges can be made.

            Otherwise it is pure bluster adding up to a Lurcher’s reputation…sullied.

            • Blazer

               /  May 19, 2018

              National and most other politicians are usually in the pocket of large donors…these days.

  4. David in Aus

     /  May 18, 2018

    The reason the middle class are feeling the squeeze is through increases taxes by National and Labour. If you don’t increase tax thresholds with inflation you are increasing taxes.

    See analysis under the National government by KPMG but it will be now worse under Labour.
    https://home.kpmg.com/nz/en/home/insights/2016/05/nz-budget-2016-bracket-creep.html

    If tax thresholds were inflation adjusted the tax thresholds (2016) should have been:

    30.0% $52320 instead of $48000
    33.0% $76300 instead of $70000