News is good for Ki­wis

North Taranaki Midweek - - WAITARA FOCUS - JONATHAN YOUNG

Some­times the news is so good that peo­ple don’t be­lieve it’s true.

But here is the news. When the gov­ern­ment owned 100% of the power com­pa­nies (Ge­n­e­sis, Mighty River Power and Merid­ian), they re­ceived on av­er­age (for the five years prior), $365 mil­lion a year in div­i­dends. Since they’ve sold 49% of the power com­pa­nies, they’ve re­ceived on av­er­age $442 mil­lion a year over the past three years.

See … I knew you wouldn’t be­lieve me! But it’s true, I’ve re­searched Trea­sury’s anal­y­sis of it. In fact, in the year to March the av­er­age cost of electricity paid by con­sumers fell for the first time in 15 years.

Just like the price of food has fallen. Kiwi shop­pers are en­joy­ing lower gro­cery prices. Three dif­fer­ent sets of sta­tis­tics con­firm the down­ward trend, which started five years ago. Ac­cord­ing to the lat­est Sta­tis­tics New Zealand fig­ures, food prices fell 1.3 per cent in the year to July 2016.

Com­ing back to electricity, a lot of peo­ple say their power bill has gone up. Yes, there have been in­creases for what is called ‘‘line charges.’’ That’s the cost of get­ting power from the lake to your plate. This in­crease is driven by the need for a huge amount of in­vest­ment in in­fra­struc­ture such as high volt­age trans­mis­sion lines, but the ac­tual cost of the en­ergy com­po­nent of your bill has in fact de­creased.

In­ter­est rates are lower now than any other time I’ve been alive. And along­side this pe­riod of flat­tened costs, we’ve seen an av­er­age wage in­crease of 2.2% a year, well above the rise of in­fla­tion.

We do have a few chal­lenges though. We’re mov­ing into a more tech­ni­cal age where ed­u­ca­tion and mar­ketable skills are es­sen­tial for higher paid em­ploy­ment. We need to keep driv­ing ed­u­ca­tional achieve­ment.

Sec­ondly, with low in­ter­est rates, we’re also get­ting lower re­turns for sav­ings. This is putting pres­sure on re­tirees and su­per­an­nu­a­tion schemes all around the world. The low in­fla­tion and low in­ter­est rate en­vi­ron­ment is great for con­sumers, but not good for savers – or those who rely on their sav­ings for a bit ex­tra.

In­creas­ing the age of en­ti­tle­ment for NZ Su­per­an­nu­a­tion only serves to makes the sit­u­a­tion eas­ier for the gov­ern­ment, but harder for the re­tiree.

The an­swer is a higher per­form­ing econ­omy built on a highly ed­u­cated and skilled work­force mak­ing and sell­ing prod­ucts the world wants. Let’s get it right from the class­room up and con­tinue to un­der­stand that as a coun­try we have to earn our way in this world.

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