Indeed, the nub of the issue is that we just aren\u2019t a high-income economy today and I don\u2019t see a clear path to make us one by 2032. AI tells me the average annual salary in New Zealand is $81,484 and the median, probably a better figure to use, is only $69,836. That\u2019s hardly champagne living, and becomes five grand less at an average salary or $4,000 less at the median rate for the employee once their 6% is taken out, not to mention the 6% the boss also has to find.<\/p>\n
But the figure that I can\u2019t get out of my head is from Westpac data earlier in the year. More than one in three Kiwis today has less than $500 in savings. That\u2019s a definition of poverty. Crash your uninsured car and you\u2019re in a dreadful financial spiral. No wonder, according to another recent report, this time from the Helen Clark Foundation, only a third of us feel financially secure.<\/p>\n
Twelve per cent might make for a stronger collective future. However, it would also make things much tougher for a heap of Kiwis until they retire \u2013 employees as well as for SME owners, a much-neglected collection of businesspeople, who\u2019ve survived \u2013 just \u2013 a torrid few years, but still aren\u2019t finding it easy. If it\u2019s a choice for them between paying off bills, keeping their businesses going, handling their mortgage repayments, or 12% more into KiwiSaver, I reckon I know what the majority would choose.<\/p>\n
And this talk of mortgages segues me rather conveniently to another much more pressing matter; the Reserve Bank of New Zealand\u2019s desire to lift the Official Cash Rate and therefore mums\u2019 and dads\u2019 interest rates, meaning even more cost-of-living struggles.<\/p>\n
I accept our economy is a hard thing to generalise on. The South Island and our farming friends seem to be in clover. Yet that\u2019s not true in major cities, namely Auckland and Wellington for the most part.<\/p>\n
Auckland Business Chamber chief executive Simon Bridges. Photo \/ Michael Craig<\/p>\n
Additionally, it hasn\u2019t been all the members of RBNZ who are entirely frisky for rate rises. The fulltimers at the bank were less enthusiastic than the independent members who presumably don\u2019t run a small business at the current time, have paid off their mortgages and still take regular holidays to Australia.<\/p>\n
Yes, inflation is a thing that can at times be a wretched beast. But during the height of the Middle East war I couldn\u2019t for the life of me understand how restricting more cash in a stalled recovery was a good idea. Especially when the big driver of this was foreign oil, which we\u2019ve less control over than our teenage children\u2019s social media usage.<\/p>\n
Today as \u2013 touch wood \u2013 the war is over, more traffic is heading through the Strait of Hormuz. On this basis, the arguments for holding rather than raising become even stronger. Petrol prices are down a little and some commercial banks are saying therefore that the RBNZ will slow its hawkish push down and rates will stay lower longer.<\/p>\n
I certainly hope so. We aren\u2019t high income in New Zealand, and we badly need an economic uptick. One word matters more than KiwiSaver, more than inflation, or any other for that matter. It\u2019s growth.<\/p>\n
Simon Bridges is the chief executive of the Auckland Business Chamber and was the leader of the National Party from 2018 to 2020.<\/p>\n