March 31, 2026 • 24 mins
The financial year is coming to an end.
It means we’ll see a whole bunch of policies and adjustments from April 1.
Everything from crayfish catch limits and Pharmac funding to changes to the Living and Minimum wages.
Super annuitants, working families, students and beneficiaries are among those who will receive additional support.
On the law-and-order front, the government’s crackdown on drug drivers is set to ramp up.
And power bills are expected to increase, after the Commerce Commission agreed to let local lines companies, and Transport, charge households and businesses more a couple years ago.
Today on The Front Page, NZ Herald business editor at large, Liam Dann, is with us to break down what changes are in the works, and what it might mean for you – and our economy.
Follow The Front Page on iHeartRadio, Apple Podcasts, Spotify or wherever you get your podcasts.
You can read more about this and other stories in the New Zealand Herald, online at nzherald.co.nz, or tune in to news bulletins across the NZME network.
Host: Chelsea Daniels
Editor/Producer: Richard Martin
Producer: Jane Yee
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Episode Transcript
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Speaker 1 (00:05):
Kiyota.
Speaker 2 (00:06):
I'm Chelsea Daniels and this is the Front Page, a
daily podcast presented by the New Zealand Herald.
Speaker 1 (00:16):
The financial year is coming to an end.
Speaker 2 (00:19):
It means we'll see a whole bunch of policies and
adjustments from April first. Everything from crayfish catch limits and
far mac funding to changes to the living and minimum wages,
super innuitance, working families, students and beneficiaries are among those
who will receive additional support. On the law and order front,
(00:39):
the government's crackdown on drug drivers is set to ramp up,
and power bills are expected to increase after the Commerce
Commission agreed to let local lines companies charge households and
businesses more a couple of years ago.
Speaker 1 (00:53):
Today on the Front Page ends.
Speaker 2 (00:55):
At Herald Business Editor at Large Liam dan is with
us to break down what change are in the works
and what it might mean for you and.
Speaker 1 (01:03):
Our economy solely.
Speaker 2 (01:07):
I'm a whole bunch of changes to benefits today.
Speaker 1 (01:10):
Can you run me through a few of them?
Speaker 3 (01:12):
Yeah, Classic April one. The stuff that's been announced over
the past year or a few months from the government
comes into force. Some of the big ones that are
going to get noticed benefits rising, so super innuitants are
going to see some increases. I think something like married
couple would qualify for about fifty dollars a fortnight. You've
(01:36):
got changes to the Family Tax Credit, so that sees
eligible families with one child receiving extra four hundred dollars
a year. Families with two children maybe seven twenty and
three children one and fifty. So what's that if you've
got three kids, it's about twenty bucks a week. Student
allowances if you're lucky enough to get a student allowance,
(02:00):
twenty two dollars a fortnight, and beneficiaries like I guess
the way this government is it's never keen to promote
the increases in the and the benefits. But a single
person over twenty five on the job seeker support would
get twenty two dollars extra a fortnite. A couple with
children would receive an extra forty dollars a fortnight on
(02:20):
top of the family tax credit. So those are some
quite big changes for those people that they affect. This
is going to be a theme of what we talk
about today, but you can bet that's being eaten up
by inflation and oil costs, right now.
Speaker 2 (02:35):
Well, this is something that happens every year, right, is
in the government actually you know, has to do this.
Speaker 1 (02:41):
Can they take credit for it?
Speaker 3 (02:43):
I think in a weird sort of way, they're probably
kind of taking credit for not doing as much as
they have in the past.
Speaker 1 (02:49):
They're doing the bare minimum.
Speaker 3 (02:50):
Yeah, so yeah, the government kind of does this every year.
The other one that is in there that's the sort
of an annual thing is a change to the minimum wage.
So and so the minimum wage goes up by two
percent to twenty three ninety five an hour. That's not
a huge increase two percent, it's below inflation. So in
a way, I think in terms of this government and
(03:12):
Nicola willis the finance minister, trying to present themselves as
very fiscally responsible and not having money to spend. Yeah,
the credit they're taking is for not splashing out. And
so this is actually at the tighter end of what's
been sort of allocated over the past several years. And yeah,
(03:34):
is going to be below the cost of living increases
that most people in this bracket are facing.
Speaker 2 (03:41):
Well, I saw that when a Workplace Relations Minister Brook
van Velden actually announced the change to the adult minimum
wage she said, and I quote, the increase aims to
help minimum wage workers keep up with the cost of
limiting with inflation projected to remain relatively stable at around
two percent from June twenty twenty six. She made this
announcement in December. We all know things have changed a
(04:05):
little bit since then. Things are relatively unstable until June
twenty twenty six. I mean, with this kind of announcement,
why does does government make these decisions, say like six
months out from the minimum waging crease.
Speaker 3 (04:19):
Some of it it's the budget, the way the creation
of law works. You know, it's quite a complicated process.
So they will announce a policy plan that it gets
worked through into the sort of legal framework or legislative framework,
and it can take a long time. So that's traditional
that April one. That's why we have April Fools because
(04:41):
that's the day that all new law changes came through.
And I guess the jokers that we think politicians are
idiots or something like that, but you know, so traditionally,
you know, it's been a day of pranks and all
that sort of stuff. But also traditionally the day that
primarily historically tax has changed. You know, it's the it's
(05:02):
the new financial year for a lot of a lot
of people. Traditionally it was it's changed a little bit
over over time. So yeah, yep, there's that. I mean,
I think that was pretty optimistic to suggest that a
two percent increase to the minimum wage was going to
keep up with inflation. Even prior to the Iran conflict,
(05:22):
we were sitting at about we were sitting at three
point one. And I think the thing is that that
that sort of core inflation might be more subdued, you know,
like international affairs might prior to the war have been
looking okay, and various things can help reduce that CPI inflation,
(05:43):
but the really the really tough ones for people on
lower wages or lower incomes that you know, we've seen
food keep rising by about I thinks about four point
six percent in the last year. So food you've got
to have that. It's put oil petrol to one side,
because that's just an absolute nightmare anyway. But then electricity
prices have continued to rise, and so some of those
(06:08):
really basic things that people can't avoid have risen by
a lot more than two or three percent. And the
people who are the poorest, they're the ones who have
to spend most of their income on just that survival stuff.
So if you're earning a really great salary, you know,
a ceo, you know, thinking about CEOs earning their million
(06:30):
dollars in things they can afford to drive whatever, because
the increase in petrol price is just such a tiny
percentage increase based on relative to their total income.
Speaker 2 (06:40):
Well, it's funny you mentioned electricity because power bills are
going up from today as well.
Speaker 1 (06:45):
But we've known about this for a week.
Speaker 3 (06:46):
But while a, yeah, this is the regulated part of
the power price we pay. So while there's always a
lot of focus on the spot prices and whether the
lakes are full and how much demand and usage there is,
there is quite a cost component to just moving the
energy around the country. And that's where transpower comes in,
(07:07):
and they sort of have those price increases are regulated.
So you know, I think even the Commerce Commission looked
and looked at that and said, look, we just have
to live with that because that is required for maintenance,
for building new distribution line you know, lines for distributing
the power, and of course the you know, the transpower people.
(07:29):
Inflation just flows through everything. So if they're having to
pay workers more or the cost of getting out there
to fix a pie line or something has increased. That
that is part of it. So this is a Yeah,
this is a fully regulated power increase, one increased to
altricity that we just can't avoid unfortunately.
Speaker 2 (07:45):
Yeah, because it went up ten dollars from April last
year and five dollars this year and then five dollars
a year until twenty twenty nine.
Speaker 1 (07:53):
And that's to cover all the lines and stuff.
Speaker 3 (07:54):
I think we just have to live with it. Yeah.
Speaker 2 (07:56):
Yeah, Well the first step in the increase in can
we save a contribution rates, it takes effect today for
all people who don't opt out.
Speaker 1 (08:06):
Tell me why I shouldn't opt out, Leam.
Speaker 3 (08:08):
Yeah, this is a bit more exciting because this, to
me is sort of more about the long term economic
goals that New Zealand has of essentially getting kiwi's saving
more money, having more money at retirement, and also having
more money and more capital in these New Zealand based
funds which can actually be used to do things to
(08:31):
invest in infrastructure and all that sort of stuff. So yeah,
I think Australia's six and six I think is twelve percent.
You know, it's getting up to thirteen thirteen. Yeah, so
they're increasing as well. We are currently you know, three
and three, and so this is a move towards four
and four. So they're saying, well, the default rate rises
(08:56):
to three point five. Now, it's tough timing, right, because
it does take that that well, you know that that
half a percent out of your pay packet, but you're
keeping it's going into a fund, a fund which is
also you know, I suppose worryingly going backwards because of
the global turmoil. But if you're thinking, the important way
(09:19):
to think about that though, is it's now cheaper to
buy shares than it was you know, a month ago.
So actually, you know, they're really.
Speaker 1 (09:26):
Smart internal optimistly know well.
Speaker 3 (09:28):
That the smart investors will be looking for bargains right now,
and so you have to think long term. But there
is that issue that the smart investors probably do have
all their cost of living expenses covered, so they can
afford to think long term. And so that's the big dilemma.
It's a dilemma on a personal level, on the household
level around saving it's a dilemma on a national level
(09:50):
for our country because you know, you could you sort
of lurch from crisis to crisis and paycheck to paycheck
or do you just somehow you've got to break the
cycle and force yourself to save more so that you
get away from lurching from crisis to crisis. And so
this is a good step in the right direction. And
so of course, if you you're giving up half a
(10:11):
half a percent of pay, but you're getting, your employer
then has to match that. So actually you're gaining you know,
a full percent of your your wage or your salary
on top of your your key we savers say, you know, contributions.
That's got to be good. That's you know, I can't
do the math right now, but you know, someone you
look at their calculators like on sorted dot org and things,
(10:33):
and over the span of a worker's life, that's that's huge.
That's you know, tens of thousands of dollars extra going
to be in your account at the end of end
of your working life.
Speaker 4 (10:48):
Our government has decided to go for a moderate increase.
It is a modest increase, but it's looking at the
cost that businesses will be needing to stomach to pay
employees more. We want to acknowledge that employees as well
as business have been doing it particularly tough this year.
We want more younger people into more jobs, but we
(11:08):
also know young people have been bearing the brunt of
new unemployment statistics.
Speaker 1 (11:13):
How do we get more young people in jobs?
Speaker 4 (11:15):
We build business confidence, We allow more businesses to hire someone.
But once you start attacking the minimum wage and putting
it up and up and up and up, it's really
going to change business confidence.
Speaker 2 (11:30):
I saw that when the change was announced, though Treasury
said it expected eighty percent of the employer costs to
be met by lower than expected pay rises. Is that
just being quite cynical or well, I.
Speaker 3 (11:42):
Suppose it's realistic. If you're working for a relatively small
business with just a handful of staff, you don't want
them to go to the wall. They've got to actually
be able to, you know, and they're facing all sorts
of costs, then yeah, you could end up wearing it
through it slightly lower pay rise, hopefully a bit of
(12:04):
give and take. Maybe it's not the full zero point five,
you know, it's sort of shared a little, but you know,
basically it's about sort of making that leap. Because the
way salaries work is that once you're you know, once
you've adapted to what your salary is. You don't think
about it, like keep we savers, like income tax, you
just don't think about it. You get what you get
(12:26):
and you paypack it. But so much better than income tax,
which you know, we could say income tax is great
because it's for building schools and roads. But key we saver.
It is in your balance. It's your your your account,
and it's going to be your money eventually, or it
is there is your money if you ever get into
terrible trouble and you know that sort of thing, or
if you could want to use it for a first home.
So I think it would be wrong to think of
(12:48):
this as having money taken off you. And if in
any way, shape or form, you can afford it, do it.
I appreciate that maybe some people who are just struggling
and doing it so tough right now that it's pretty hard,
but you know, it's about breaking that cycle of you know,
getting out of that position where you're living week to week.
Speaker 2 (13:09):
Well, three point five percent actually seems I mean they
could have well done four or four point five, right,
Why did they land at three point five?
Speaker 3 (13:16):
Well, I think they're trying to move in a direction,
so doing it in increments makes it less painful, but
they want to move to four and four and then
there's I don't think it's plugged in yet, but there
is talk from both major parties of trying to keep
going and get up to that sex and sex which
is closer to Australia over time. So you know, I
(13:38):
wouldn't be surprised if we see more legislation increasing those
contributions over the next ten years. And again it's just
the government's sort of the political parties have to hold
their nerve as well and not think, God, this is
too tough for employers and people right now, it's going
to be unpopular because we have whatever crisis it is,
(14:03):
and you know it won't be this crisis in a
few years, it'll be something else.
Speaker 2 (14:08):
Well, that's presumably why we're still at about three three
point five right because of consecutive crises and the government
not wanting to rock the boat.
Speaker 3 (14:16):
It's also we have a more generous like national super
than Australia, for example, in some respects like they means test,
we don't everybody gets it in New Zealand, and so
we've tended to rely more on on that national super
I mean, all all the parties that I'm aware of,
apart from New Zealand first seem to understand that we
(14:38):
can't afford this long term, and you know, something will
have to change, whether it's putting up the retirement age
or means testing the pension, and so you know you
can bet that is going to change in the next
ten years or so. And so as a counter to that,
we want to have New Zealanders with a really good
(14:58):
buffer in their KI saver accounts.
Speaker 2 (15:01):
So you mentioned the adult minimum wage rate increasing by
two percent to twenty three dollars ninety five an hour. Also,
the living wage has increased to twenty nine point ninety
up from twenty eight ninety five.
Speaker 1 (15:16):
That's a three.
Speaker 2 (15:17):
Point two eight percent increase. Tell me living wage employers
have until September first to implement these increases. But what
is the living wage? Who makes it up and who
buys into it?
Speaker 3 (15:28):
Yeah, it's a it's a conceptual thing in a way.
It's like it's kind of like it is accredited by
the government. You join the living wage scheme or concept
or whatever, and you get you're credited as a living
wage employer. So there therefore you in order to remain accredited.
You have to have to meet these changes, but you
don't have to be a living wage employer. The minimum
(15:49):
wage is the minimum wage. So in a way, this
is kind of like I'm just say well, I'm going
to say that. I'm not going to say it, but
virtual sigling, I mean, you know, it's saying well, it's
like a blue tick.
Speaker 1 (16:01):
It's like a rainbow tech.
Speaker 3 (16:02):
For a health tech or getting official health stick on
your food product or something like that. The government's monitoring it.
It is a way for you know that the upside
for employers as it says, we're a good employer, Come
and work for us. You know, we look after our people.
And there's a number of big organizations and big corporates
that do subscribe to their living wage mantra. And yeah,
(16:26):
so they will, they'll they'll lift that. You know, it's
pretty good. It's pretty good if you're a kid living
at home and you work for one of those places
part time. I got to say, I know some people
know some kids working for bummings they get a living wage.
Speaker 2 (16:39):
Yeah, yeah, well, and the living wage as well just
takes into account. It seems in the rise of inflation,
a lot of companies that are looking at the bottom
line do not.
Speaker 3 (16:53):
Yeah, I mean, I guess you know, companies will make
that choice about what the benefits are for them in
terms of al for workers, for attracting new staff, all
that sort of stuff. I suppose there's some sense of
ethical choice in there as well. But yes, and other
companies are really either they just cannot they think they
(17:17):
think they can't afford it, or they are employing a
lot of, like I say, a lot of kids and things.
So you know you've got your KFC workers and your
McDonald's workers and things starting out on minimum wage.
Speaker 1 (17:30):
Tell me about crypto tax.
Speaker 2 (17:32):
So there are major changes to New Zealand's crypto tax
regime coming in from today which will make it effectively
impossible for investors to avoid declaring their activity. So if
I'm out here with my crypto wallet buying things and stuff,
has the government not been able to see what I'm buying?
Speaker 3 (17:51):
Well, no, that's the whole point of crypto. So I'm
not claiming to be an expert on this either. And
I guess this is based on what's being done. It's
an OECD framework, so you know, we're picking up on
an international framework which says it makes it impossible. It's
just a little bit skeptical about that because the crypto
(18:12):
world is all about using this blockchain to avoid detection.
But yeah, I mean, if they're confident enough to say
it's impossible, then probably it's very difficult to avoid it.
And also, you know, unless you're a really sort of nefarious,
kind of obscure crypto going under the radar, the big ones,
(18:35):
the bitcoins and the ethereum and all that sort of
stuff want to be acknowledged and you know, be above
ground and legitimate in countries they're trading, and so I imagine
that that's part of it, and so yeah, just to
make it less of a black market type operation. So
you know, in their search for legitimacy, crypto currency is
(18:57):
trying to get away from the idea that it's base
just for you know, illegal activity and stuff that stuff
that's sort of outside the eyes of government. So I
think it's probably a choice to come into the tent
by some of the major crypto players. And yeah, it's
been worked out by the OECD. It's an international thing
(19:17):
and hopefully it works in New Zealand too.
Speaker 5 (19:27):
Electricity bills a rising nationwide line charges are increasing again.
From today, average households will see a bill increasing by
about five dollars more every month. There's no single price increase.
What households will actually see on their power built will
vary a lot depending on where you live, what plan
(19:49):
you're on, and what retailer you're with. Some householders will
see a small increase, some will see a large increase.
Some are going to be hit by an extra twenty
dollars a month. Time is that by twelve and see
if you can afford that? Right now?
Speaker 2 (20:07):
And also from today, LAMB, there'll be new border clearance
levees for all commercial shipments entering or leaving New Zealand.
It might mean shopping in New Zealand on online platforms
like TEAMU or something may become a bit more expensive.
Speaker 1 (20:21):
Why is that?
Speaker 3 (20:22):
Yeah, Well, the official reason for it is just that
there's more and more of this happening. So the logistics
of handling all this stuff and processing it by customs
is getting harder and it's becomes a bigger operation. And
so this is to cover the costs. Okay, fair enough.
(20:42):
A potential upside though, and I guess local retailers bricks
and mortar retailers or people within New Zealand are very
aware that of the sort of loss of you know,
income to the likes of TMU, Amazon and so on,
and so if it actually balances things a little bit,
(21:04):
I don't think it's it's it's not specifically aimed at
doing that, but it may just help balance up some
of the pricing differential. People might look a bit more
closely at a local competitor or just going down to
their local shops, you know. But but I guess, you know,
it's just we see the larger, larger chunk of retail
(21:25):
is going through these international operations and it's it's not
you know, it's hard to it can be quite hard
to see and pick up how much is happening as well,
if it's not being accounted for by you know, customs
at the border, we don't see it in the electronic
cards transaction data, so we don't see, you know, there's
(21:47):
a big chunk of stuff. We're not seeing how much
Keiwis are spending. And it's money that leaves the country,
you know, one way or the other. It doesn't get
handled inside and you know, help boost our retail sect
and all that sort of stuff.
Speaker 2 (22:01):
Yeah, and I suppose Timu's the one that we talk
about the most when it comes to these border changes,
because it looks like goods worth one thousand dollars or
less will attract charges of two dollars twenty one for
air freight, two dollars nine cents for sea freight, while
inward international mail will be one dollar twenty eight per
kilo home.
Speaker 1 (22:21):
Basically, if you're buying.
Speaker 2 (22:22):
A two dollar potato peeler from TIMU, because it's two dollars,
it's now got doubling in price.
Speaker 3 (22:29):
And look if someone in an office somewhere has to
process something related to that, even if it's just pushing
pushing a button, just the sheer volume of it, you
can understand why there's there's a cost aspect. Yeah, I
don't think it's it's designed to be especially punitive towards
it's what they call low you know, it's sort of
low value exports. It's aimed at individuals buying and stuff
(22:52):
directly rather than people buying goods to on sale in
New Zealand.
Speaker 2 (22:58):
And lastly, Lamb, I understand at the government's coming up
with an announcement to alleviate cost of living pressures. Basically
giving cat owners fifty dollars a week to spend it
locally in their local pet stop or animates.
Speaker 1 (23:16):
What do you think of that?
Speaker 3 (23:18):
I'm just looking at the time. You know, there's a thing,
is there April Fool's flos to finish at twelve? Oh yeah,
it sounds quite good. I mean as a cat owner.
Yeah yeah, I mean why not? But well, I mean
with probably like if you're talking about economic incentives more cats,
(23:39):
there's a native birds thing. It's very controversial.
Speaker 1 (23:43):
Yeah, yeah, yeah, thanks for joining us, Liam cheers. That's
it for this episode of the Front Page.
Speaker 2 (23:51):
You can read more about today's stories and extensive news
coverage at enzid Herald dot co dot enz The Front
Page is hosted produced by me Chelsea Daniels. Caine Dickey
is our studio operator, Richard Martin, our producer and editor,
and our executive producer is Jane Ye.
Speaker 1 (24:10):
Follow the Front Page on the iHeart app or wherever
you get your podcasts, and join us next time for
another look beyond the headlines.
Kiyota.
Speaker 2 (00:06):
I'm Chelsea Daniels and this is the Front Page, a
daily podcast presented by the New Zealand Herald.
Speaker 1 (00:16):
The financial year is coming to an end.
Speaker 2 (00:19):
It means we'll see a whole bunch of policies and
adjustments from April first. Everything from crayfish catch limits and
far mac funding to changes to the living and minimum wages,
super innuitance, working families, students and beneficiaries are among those
who will receive additional support. On the law and order front,
(00:39):
the government's crackdown on drug drivers is set to ramp up,
and power bills are expected to increase after the Commerce
Commission agreed to let local lines companies charge households and
businesses more a couple of years ago.
Speaker 1 (00:53):
Today on the Front Page ends.
Speaker 2 (00:55):
At Herald Business Editor at Large Liam dan is with
us to break down what change are in the works
and what it might mean for you and.
Speaker 1 (01:03):
Our economy solely.
Speaker 2 (01:07):
I'm a whole bunch of changes to benefits today.
Speaker 1 (01:10):
Can you run me through a few of them?
Speaker 3 (01:12):
Yeah, Classic April one. The stuff that's been announced over
the past year or a few months from the government
comes into force. Some of the big ones that are
going to get noticed benefits rising, so super innuitants are
going to see some increases. I think something like married
couple would qualify for about fifty dollars a fortnight. You've
(01:36):
got changes to the Family Tax Credit, so that sees
eligible families with one child receiving extra four hundred dollars
a year. Families with two children maybe seven twenty and
three children one and fifty. So what's that if you've
got three kids, it's about twenty bucks a week. Student
allowances if you're lucky enough to get a student allowance,
(02:00):
twenty two dollars a fortnight, and beneficiaries like I guess
the way this government is it's never keen to promote
the increases in the and the benefits. But a single
person over twenty five on the job seeker support would
get twenty two dollars extra a fortnite. A couple with
children would receive an extra forty dollars a fortnight on
(02:20):
top of the family tax credit. So those are some
quite big changes for those people that they affect. This
is going to be a theme of what we talk
about today, but you can bet that's being eaten up
by inflation and oil costs, right now.
Speaker 2 (02:35):
Well, this is something that happens every year, right, is
in the government actually you know, has to do this.
Speaker 1 (02:41):
Can they take credit for it?
Speaker 3 (02:43):
I think in a weird sort of way, they're probably
kind of taking credit for not doing as much as
they have in the past.
Speaker 1 (02:49):
They're doing the bare minimum.
Speaker 3 (02:50):
Yeah, so yeah, the government kind of does this every year.
The other one that is in there that's the sort
of an annual thing is a change to the minimum wage.
So and so the minimum wage goes up by two
percent to twenty three ninety five an hour. That's not
a huge increase two percent, it's below inflation. So in
a way, I think in terms of this government and
(03:12):
Nicola willis the finance minister, trying to present themselves as
very fiscally responsible and not having money to spend. Yeah,
the credit they're taking is for not splashing out. And
so this is actually at the tighter end of what's
been sort of allocated over the past several years. And yeah,
(03:34):
is going to be below the cost of living increases
that most people in this bracket are facing.
Speaker 2 (03:41):
Well, I saw that when a Workplace Relations Minister Brook
van Velden actually announced the change to the adult minimum
wage she said, and I quote, the increase aims to
help minimum wage workers keep up with the cost of
limiting with inflation projected to remain relatively stable at around
two percent from June twenty twenty six. She made this
announcement in December. We all know things have changed a
(04:05):
little bit since then. Things are relatively unstable until June
twenty twenty six. I mean, with this kind of announcement,
why does does government make these decisions, say like six
months out from the minimum waging crease.
Speaker 3 (04:19):
Some of it it's the budget, the way the creation
of law works. You know, it's quite a complicated process.
So they will announce a policy plan that it gets
worked through into the sort of legal framework or legislative framework,
and it can take a long time. So that's traditional
that April one. That's why we have April Fools because
(04:41):
that's the day that all new law changes came through.
And I guess the jokers that we think politicians are
idiots or something like that, but you know, so traditionally,
you know, it's been a day of pranks and all
that sort of stuff. But also traditionally the day that
primarily historically tax has changed. You know, it's the it's
(05:02):
the new financial year for a lot of a lot
of people. Traditionally it was it's changed a little bit
over over time. So yeah, yep, there's that. I mean,
I think that was pretty optimistic to suggest that a
two percent increase to the minimum wage was going to
keep up with inflation. Even prior to the Iran conflict,
(05:22):
we were sitting at about we were sitting at three
point one. And I think the thing is that that
that sort of core inflation might be more subdued, you know,
like international affairs might prior to the war have been
looking okay, and various things can help reduce that CPI inflation,
(05:43):
but the really the really tough ones for people on
lower wages or lower incomes that you know, we've seen
food keep rising by about I thinks about four point
six percent in the last year. So food you've got
to have that. It's put oil petrol to one side,
because that's just an absolute nightmare anyway. But then electricity
prices have continued to rise, and so some of those
(06:08):
really basic things that people can't avoid have risen by
a lot more than two or three percent. And the
people who are the poorest, they're the ones who have
to spend most of their income on just that survival stuff.
So if you're earning a really great salary, you know,
a ceo, you know, thinking about CEOs earning their million
(06:30):
dollars in things they can afford to drive whatever, because
the increase in petrol price is just such a tiny
percentage increase based on relative to their total income.
Speaker 2 (06:40):
Well, it's funny you mentioned electricity because power bills are
going up from today as well.
Speaker 1 (06:45):
But we've known about this for a week.
Speaker 3 (06:46):
But while a, yeah, this is the regulated part of
the power price we pay. So while there's always a
lot of focus on the spot prices and whether the
lakes are full and how much demand and usage there is,
there is quite a cost component to just moving the
energy around the country. And that's where transpower comes in,
(07:07):
and they sort of have those price increases are regulated.
So you know, I think even the Commerce Commission looked
and looked at that and said, look, we just have
to live with that because that is required for maintenance,
for building new distribution line you know, lines for distributing
the power, and of course the you know, the transpower people.
(07:29):
Inflation just flows through everything. So if they're having to
pay workers more or the cost of getting out there
to fix a pie line or something has increased. That
that is part of it. So this is a Yeah,
this is a fully regulated power increase, one increased to
altricity that we just can't avoid unfortunately.
Speaker 2 (07:45):
Yeah, because it went up ten dollars from April last
year and five dollars this year and then five dollars
a year until twenty twenty nine.
Speaker 1 (07:53):
And that's to cover all the lines and stuff.
Speaker 3 (07:54):
I think we just have to live with it. Yeah.
Speaker 2 (07:56):
Yeah, Well the first step in the increase in can
we save a contribution rates, it takes effect today for
all people who don't opt out.
Speaker 1 (08:06):
Tell me why I shouldn't opt out, Leam.
Speaker 3 (08:08):
Yeah, this is a bit more exciting because this, to
me is sort of more about the long term economic
goals that New Zealand has of essentially getting kiwi's saving
more money, having more money at retirement, and also having
more money and more capital in these New Zealand based
funds which can actually be used to do things to
(08:31):
invest in infrastructure and all that sort of stuff. So yeah,
I think Australia's six and six I think is twelve percent.
You know, it's getting up to thirteen thirteen. Yeah, so
they're increasing as well. We are currently you know, three
and three, and so this is a move towards four
and four. So they're saying, well, the default rate rises
(08:56):
to three point five. Now, it's tough timing, right, because
it does take that that well, you know that that
half a percent out of your pay packet, but you're
keeping it's going into a fund, a fund which is
also you know, I suppose worryingly going backwards because of
the global turmoil. But if you're thinking, the important way
(09:19):
to think about that though, is it's now cheaper to
buy shares than it was you know, a month ago.
So actually, you know, they're really.
Speaker 1 (09:26):
Smart internal optimistly know well.
Speaker 3 (09:28):
That the smart investors will be looking for bargains right now,
and so you have to think long term. But there
is that issue that the smart investors probably do have
all their cost of living expenses covered, so they can
afford to think long term. And so that's the big dilemma.
It's a dilemma on a personal level, on the household
level around saving it's a dilemma on a national level
(09:50):
for our country because you know, you could you sort
of lurch from crisis to crisis and paycheck to paycheck
or do you just somehow you've got to break the
cycle and force yourself to save more so that you
get away from lurching from crisis to crisis. And so
this is a good step in the right direction. And
so of course, if you you're giving up half a
(10:11):
half a percent of pay, but you're getting, your employer
then has to match that. So actually you're gaining you know,
a full percent of your your wage or your salary
on top of your your key we savers say, you know, contributions.
That's got to be good. That's you know, I can't
do the math right now, but you know, someone you
look at their calculators like on sorted dot org and things,
(10:33):
and over the span of a worker's life, that's that's huge.
That's you know, tens of thousands of dollars extra going
to be in your account at the end of end
of your working life.
Speaker 4 (10:48):
Our government has decided to go for a moderate increase.
It is a modest increase, but it's looking at the
cost that businesses will be needing to stomach to pay
employees more. We want to acknowledge that employees as well
as business have been doing it particularly tough this year.
We want more younger people into more jobs, but we
(11:08):
also know young people have been bearing the brunt of
new unemployment statistics.
Speaker 1 (11:13):
How do we get more young people in jobs?
Speaker 4 (11:15):
We build business confidence, We allow more businesses to hire someone.
But once you start attacking the minimum wage and putting
it up and up and up and up, it's really
going to change business confidence.
Speaker 2 (11:30):
I saw that when the change was announced, though Treasury
said it expected eighty percent of the employer costs to
be met by lower than expected pay rises. Is that
just being quite cynical or well, I.
Speaker 3 (11:42):
Suppose it's realistic. If you're working for a relatively small
business with just a handful of staff, you don't want
them to go to the wall. They've got to actually
be able to, you know, and they're facing all sorts
of costs, then yeah, you could end up wearing it
through it slightly lower pay rise, hopefully a bit of
(12:04):
give and take. Maybe it's not the full zero point five,
you know, it's sort of shared a little, but you know,
basically it's about sort of making that leap. Because the
way salaries work is that once you're you know, once
you've adapted to what your salary is. You don't think
about it, like keep we savers, like income tax, you
just don't think about it. You get what you get
(12:26):
and you paypack it. But so much better than income tax,
which you know, we could say income tax is great
because it's for building schools and roads. But key we saver.
It is in your balance. It's your your your account,
and it's going to be your money eventually, or it
is there is your money if you ever get into
terrible trouble and you know that sort of thing, or
if you could want to use it for a first home.
So I think it would be wrong to think of
(12:48):
this as having money taken off you. And if in
any way, shape or form, you can afford it, do it.
I appreciate that maybe some people who are just struggling
and doing it so tough right now that it's pretty hard,
but you know, it's about breaking that cycle of you know,
getting out of that position where you're living week to week.
Speaker 2 (13:09):
Well, three point five percent actually seems I mean they
could have well done four or four point five, right,
Why did they land at three point five?
Speaker 3 (13:16):
Well, I think they're trying to move in a direction,
so doing it in increments makes it less painful, but
they want to move to four and four and then
there's I don't think it's plugged in yet, but there
is talk from both major parties of trying to keep
going and get up to that sex and sex which
is closer to Australia over time. So you know, I
(13:38):
wouldn't be surprised if we see more legislation increasing those
contributions over the next ten years. And again it's just
the government's sort of the political parties have to hold
their nerve as well and not think, God, this is
too tough for employers and people right now, it's going
to be unpopular because we have whatever crisis it is,
(14:03):
and you know it won't be this crisis in a
few years, it'll be something else.
Speaker 2 (14:08):
Well, that's presumably why we're still at about three three
point five right because of consecutive crises and the government
not wanting to rock the boat.
Speaker 3 (14:16):
It's also we have a more generous like national super
than Australia, for example, in some respects like they means test,
we don't everybody gets it in New Zealand, and so
we've tended to rely more on on that national super
I mean, all all the parties that I'm aware of,
apart from New Zealand first seem to understand that we
(14:38):
can't afford this long term, and you know, something will
have to change, whether it's putting up the retirement age
or means testing the pension, and so you know you
can bet that is going to change in the next
ten years or so. And so as a counter to that,
we want to have New Zealanders with a really good
(14:58):
buffer in their KI saver accounts.
Speaker 2 (15:01):
So you mentioned the adult minimum wage rate increasing by
two percent to twenty three dollars ninety five an hour. Also,
the living wage has increased to twenty nine point ninety
up from twenty eight ninety five.
Speaker 1 (15:16):
That's a three.
Speaker 2 (15:17):
Point two eight percent increase. Tell me living wage employers
have until September first to implement these increases. But what
is the living wage? Who makes it up and who
buys into it?
Speaker 3 (15:28):
Yeah, it's a it's a conceptual thing in a way.
It's like it's kind of like it is accredited by
the government. You join the living wage scheme or concept
or whatever, and you get you're credited as a living
wage employer. So there therefore you in order to remain accredited.
You have to have to meet these changes, but you
don't have to be a living wage employer. The minimum
(15:49):
wage is the minimum wage. So in a way, this
is kind of like I'm just say well, I'm going
to say that. I'm not going to say it, but
virtual sigling, I mean, you know, it's saying well, it's
like a blue tick.
Speaker 1 (16:01):
It's like a rainbow tech.
Speaker 3 (16:02):
For a health tech or getting official health stick on
your food product or something like that. The government's monitoring it.
It is a way for you know that the upside
for employers as it says, we're a good employer, Come
and work for us. You know, we look after our people.
And there's a number of big organizations and big corporates
that do subscribe to their living wage mantra. And yeah,
(16:26):
so they will, they'll they'll lift that. You know, it's
pretty good. It's pretty good if you're a kid living
at home and you work for one of those places
part time. I got to say, I know some people
know some kids working for bummings they get a living wage.
Speaker 2 (16:39):
Yeah, yeah, well, and the living wage as well just
takes into account. It seems in the rise of inflation,
a lot of companies that are looking at the bottom
line do not.
Speaker 3 (16:53):
Yeah, I mean, I guess you know, companies will make
that choice about what the benefits are for them in
terms of al for workers, for attracting new staff, all
that sort of stuff. I suppose there's some sense of
ethical choice in there as well. But yes, and other
companies are really either they just cannot they think they
(17:17):
think they can't afford it, or they are employing a
lot of, like I say, a lot of kids and things.
So you know you've got your KFC workers and your
McDonald's workers and things starting out on minimum wage.
Speaker 1 (17:30):
Tell me about crypto tax.
Speaker 2 (17:32):
So there are major changes to New Zealand's crypto tax
regime coming in from today which will make it effectively
impossible for investors to avoid declaring their activity. So if
I'm out here with my crypto wallet buying things and stuff,
has the government not been able to see what I'm buying?
Speaker 3 (17:51):
Well, no, that's the whole point of crypto. So I'm
not claiming to be an expert on this either. And
I guess this is based on what's being done. It's
an OECD framework, so you know, we're picking up on
an international framework which says it makes it impossible. It's
just a little bit skeptical about that because the crypto
(18:12):
world is all about using this blockchain to avoid detection.
But yeah, I mean, if they're confident enough to say
it's impossible, then probably it's very difficult to avoid it.
And also, you know, unless you're a really sort of nefarious,
kind of obscure crypto going under the radar, the big ones,
(18:35):
the bitcoins and the ethereum and all that sort of
stuff want to be acknowledged and you know, be above
ground and legitimate in countries they're trading, and so I imagine
that that's part of it, and so yeah, just to
make it less of a black market type operation. So
you know, in their search for legitimacy, crypto currency is
(18:57):
trying to get away from the idea that it's base
just for you know, illegal activity and stuff that stuff
that's sort of outside the eyes of government. So I
think it's probably a choice to come into the tent
by some of the major crypto players. And yeah, it's
been worked out by the OECD. It's an international thing
(19:17):
and hopefully it works in New Zealand too.
Speaker 5 (19:27):
Electricity bills a rising nationwide line charges are increasing again.
From today, average households will see a bill increasing by
about five dollars more every month. There's no single price increase.
What households will actually see on their power built will
vary a lot depending on where you live, what plan
(19:49):
you're on, and what retailer you're with. Some householders will
see a small increase, some will see a large increase.
Some are going to be hit by an extra twenty
dollars a month. Time is that by twelve and see
if you can afford that? Right now?
Speaker 2 (20:07):
And also from today, LAMB, there'll be new border clearance
levees for all commercial shipments entering or leaving New Zealand.
It might mean shopping in New Zealand on online platforms
like TEAMU or something may become a bit more expensive.
Speaker 1 (20:21):
Why is that?
Speaker 3 (20:22):
Yeah, Well, the official reason for it is just that
there's more and more of this happening. So the logistics
of handling all this stuff and processing it by customs
is getting harder and it's becomes a bigger operation. And
so this is to cover the costs. Okay, fair enough.
(20:42):
A potential upside though, and I guess local retailers bricks
and mortar retailers or people within New Zealand are very
aware that of the sort of loss of you know,
income to the likes of TMU, Amazon and so on,
and so if it actually balances things a little bit,
(21:04):
I don't think it's it's it's not specifically aimed at
doing that, but it may just help balance up some
of the pricing differential. People might look a bit more
closely at a local competitor or just going down to
their local shops, you know. But but I guess, you know,
it's just we see the larger, larger chunk of retail
(21:25):
is going through these international operations and it's it's not
you know, it's hard to it can be quite hard
to see and pick up how much is happening as well,
if it's not being accounted for by you know, customs
at the border, we don't see it in the electronic
cards transaction data, so we don't see, you know, there's
(21:47):
a big chunk of stuff. We're not seeing how much
Keiwis are spending. And it's money that leaves the country,
you know, one way or the other. It doesn't get
handled inside and you know, help boost our retail sect
and all that sort of stuff.
Speaker 2 (22:01):
Yeah, and I suppose Timu's the one that we talk
about the most when it comes to these border changes,
because it looks like goods worth one thousand dollars or
less will attract charges of two dollars twenty one for
air freight, two dollars nine cents for sea freight, while
inward international mail will be one dollar twenty eight per
kilo home.
Speaker 1 (22:21):
Basically, if you're buying.
Speaker 2 (22:22):
A two dollar potato peeler from TIMU, because it's two dollars,
it's now got doubling in price.
Speaker 3 (22:29):
And look if someone in an office somewhere has to
process something related to that, even if it's just pushing
pushing a button, just the sheer volume of it, you
can understand why there's there's a cost aspect. Yeah, I
don't think it's it's designed to be especially punitive towards
it's what they call low you know, it's sort of
low value exports. It's aimed at individuals buying and stuff
(22:52):
directly rather than people buying goods to on sale in
New Zealand.
Speaker 2 (22:58):
And lastly, Lamb, I understand at the government's coming up
with an announcement to alleviate cost of living pressures. Basically
giving cat owners fifty dollars a week to spend it
locally in their local pet stop or animates.
Speaker 1 (23:16):
What do you think of that?
Speaker 3 (23:18):
I'm just looking at the time. You know, there's a thing,
is there April Fool's flos to finish at twelve? Oh yeah,
it sounds quite good. I mean as a cat owner.
Yeah yeah, I mean why not? But well, I mean
with probably like if you're talking about economic incentives more cats,
(23:39):
there's a native birds thing. It's very controversial.
Speaker 1 (23:43):
Yeah, yeah, yeah, thanks for joining us, Liam cheers. That's
it for this episode of the Front Page.
Speaker 2 (23:51):
You can read more about today's stories and extensive news
coverage at enzid Herald dot co dot enz The Front
Page is hosted produced by me Chelsea Daniels. Caine Dickey
is our studio operator, Richard Martin, our producer and editor,
and our executive producer is Jane Ye.
Speaker 1 (24:10):
Follow the Front Page on the iHeart app or wherever
you get your podcasts, and join us next time for
another look beyond the headlines.
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