Under the petrol pump
Cars drink up wealth like my children suck down homemade lemonade.
Which is why it is so infuriating to see OPEC, the league of big oil-producing countries, coming up with a plan to cut oil production by 15 per cent to drive up the oil price.
OPEC is a club of nations with a licence to extract money from households.
It’s a cartel that doesn’t even try to be discreet.
If New Zealand banks got together in a darkened room and made an agreement to lift margins on mortgages, people would end up in jail.
But OPEC is outside of country law, so they can thumb their oily noses at us.
Completely insulating yourself against the pricing power of monopolies, oligopolies and rapacious business types is tough.
Fortunately, partial insulation isn’t so hard.
For example, buying a house insulates you from landlords and rent rises.
Paying off a mortgage fast insulates you from rising interest rates.
But when it comes to petrol, many of us are trapped by the ‘‘tyranny of distance’’.
Traditionally this phrase referred to the distance our exports have to travel to overseas markets.
But in large, low-density cities like Auckland, the phrase perfectly captures the lot of commuters forced to live far from their workplaces.
Transport costs are 14 per cent of the Consumer Price Index, of which petrol makes up a third. It’s a big bite out of the household budget.
People who own a house near their work and children’s schools worry less about petrol prices.
They could even go back to a 1970s-style one-car family set-up like my own.
An study claims the average Kiwi commuter spends $11,852 running a car each year.
If they sold it and used public transport, they’d save $9065.78 a year.
If your household can’t do what we’ve done, it might still save petrol by running smaller, more fuel-efficient cars, and cut unnecessary car journeys by carsharing, walking, or cycling.
Cutting petrol can limit your sense of physical freedom, and travel can take longer.
It can mean living a more local life, but that’s been working for us, and the children became much fitter now they walk or cycle a couple of kilometres a day.
Being more frugal in your spending, and pinching your lifestyle to cut the amount you have to pay to monopolists and oligopolists is infuriating.
Ironically though, it allows you to insulate yourself even more by growing your wealth faster.
Reducing your petrol consumption isn’t just one in the eye for OPEC.
The AA’s Mark Stockdale says just a quarter of the price of petrol is the cost of petrol. Another quarter is the cost of getting it to the pump.
All the rest is tax- GST, excise taxes and fuel levies.
‘‘We shouldn’t get too angry with Arabs in flowing robes, we should be angry with the politicians in the Beehive,’’ he says.
Fair point. When OPEC raises the oil price, your GST bill goes up too! With John Key gone, more breathing room has been created for next year’s election to be fought on policies, not personalities.
Key’s farewell statements were quite revealing in that respect. Many of the accomplishments he listed were either extensions of policies he inherited or – in the case of the home insulation scheme – were conceived and developed in association with the Greens.
With pride, Key also mentioned his steering of the country safely through (a) the Global Financial Crisis (b) the Christchurch earthquakes aftermath and (c) the Pike River tragedy.
Primarily, these were triumphs of political management, not policy innovation.
As one journalist noted at Key’s final press conference as leader, hadn’t he ended up extending the same Working For Families scheme that he’d previously denounced as socialism by stealth?
As Key’s National Party predecessor Don Brash also indicated, future historians could find it hard to detect much policy daylight between the Clark/ Cullen team and the Key/English combination that succeeded it.
Pointedly though, the harsh policies of austerity practiced in the UK by Key’s mentor David Cameron were not pursued here.
Luckily, they weren’t needed. Insatiable demand from China – which did so much state spending we didn’t need a stimulus package of our own - kept the economies of both Australia and New Zealand afloat throughout the Global Financial Crisis.
True, the charter schools experiment was a bone thrown by Key to National’s partners in government, and the partial asset sales programme offered concessions to National’s corporate allies.
Yet the longer the Key era went on, the scarcer such