House­holds wage war in the fight just to sur­vive

Auckland City Harbour News - - OPINION -

Lies, damned lies and sta­tis­tics is one of the mot­toes of a cynic.

I strive against cyn­i­cism but I’m los­ing the fight over the of­fi­cial in­fla­tion fig­ures be­cause I don’t know any­body who be­lieves that in­fla­tion in the 12 months to the end of Septem­ber was just 1.4 per cent.

Rates, power, food, petrol, house prices, house build­ing costs, house in­sur­ance, med­i­cal in­sur­ance . . . all of it has been spi­ralling up faster than that, in some cases far faster and house­holds all over are be­ing squeezed by it.

How can this be? My con­clu­sion is be­cause the Con­sumer Price In­dex (CPI) is not in­fla­tion as you or I ex­pe­ri­ence it and I wish every­one would stop talk­ing as though it were.

House­holds are in a con­stant war with price rises.

Busi­nesses are try­ing to squeeze as much out of each house­hold as they can and the con­stant cit­ing of ‘‘in­fla­tion’’ as mea­sured by CPI is giv­ing them – in­clud­ing lo­cal coun­cils – the cover to do it.

The house­hold eco­nomic sur­vey has just come out show­ing house­hold ex­pen­di­ture up by 9.1 per cent in the three years to the end of June. CPI was up 7 per cent over that pe­riod.

In case no­body no­ticed, house­holds have been try­ing to tighten their belts.

This has not been a pe­riod where house­holds have opened their wal­lets to live it up.

House­holds spent more on petrol, hous­ing, util­i­ties and food.

Not the lux­u­ries of life then.

Per­haps 9.1 per cent is a closer re­flec­tion of in­fla­tion for house­holds. I’m not sure. So how do you fight in­fla­tion? There are var­i­ous meth­ods house­holds use. Some seek pay in­creases by be­ing good at what they do or work­ing longer hours (though th­ese have been hard to come by lately).

Some change their habits by buy­ing cheaper things, cut­ting down on the fruit and veges for ex­am­ple and buy­ing more bread or start grow­ing their own veges.

Some can give up cer­tain higher cost ac­tiv­i­ties like smok­ing, drink­ing, eat­ing out, or cur­tail them.

They have shorter show­ers. They keep the heat­ing off. Houses can be­come more crowded.

Some bulk buy when things are on spe­cial.

Some de­fer spend­ing, some­thing that at times is ev­i­dent in the state of cars on our roads, or of houses fall­ing into dis­re­pair. Some shop around for lower prices, buy­ing meat from the Mad Butcher in­stead of the su­per­mar­ket, for ex­am­ple.

All th­ese re­sponses are le­git­i­mate, though most in­volve some level of pri­va­tion.

Busi­nesses re­spond to th­ese kinds of changes in con­sumer be­hav­iour.

They hike their fixed power charges so house­holds pay more just to have the ser­vice whether or not they use it.

The sizes of pay pack­ets falls but the prices don’t fall as much.

The su­per­mar­kets be­wil­der you with spe­cials to the point that it is hard to be­lieve there is such a thing as an ev­ery­day price.

Per­son­ally, I have come to be­lieve that the spe­cial price is the price and some­thing which doesn’t have a spe­cial la­bel on it is be­ing over­priced in or­der to be able to slap a spe­cial la­bel on it the fol­low­ing week.

As I said, it’s a war and each house­hold is fight­ing on mul­ti­ple fronts at any one time.

I’d just like a mea­sure of house­hold in­fla­tion that I feel shows the mea­sure of the fight they are in.

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