Costs rising faster than net income

The Sunday Star-Times reports on how costs for the average family have been increasing faster than their after tax income:

The new figures come as the bad news rolls in thick and fast for New Zealanders on a budget: petrol was last week tipped to eventually hit $3 a litre; electricity costs are set to rise due to low hydro lake levels and the effects of carbon emission trading schemes; food prices are leaving supermarket shoppers gulping and interest rate jumps of recent years are beginning to bite as fixed mortgages expire.

Hickey shows weekly expenses for a household on the average income have risen by $193 since April 2004, while net income has increased by just $156 a week (based on gross incomes rising from $63,400pa to $72,000).

And it’s not just middle income families struggling. A household on $92,000 has had a $217 jump in living costs leaving it $93 a week worse off. A family on $52,000, aided by Working for Families, will have suffered relatively less, but is still $14 worse off.

So in four years a household on the average wage is $37 a week worse off, despite gross income having gone up $8,600. This shows how dishonest it is when people merely talk about gross wages instead of real net after tax incomes.