It’s thought that it was Mark Twain who said, “There are three kinds of lies: lies, damned lies, and statistics.” It’s become a commonplace phrase for describing the persuasive power of numbers, especially statistics, when used to strengthen someone’s argument or point of view.
As National’s spokesperson for statistics, I can vouch for the important role that statistics play in our understanding of New Zealand’s people, the economy and our environment.
StatsNZ is the Government agency responsible for collecting data. It does so through the national Census, held every five years, plus additional surveys and questionnaires conducted by other Government agencies.
After crunching the numbers, StatsNZ then provides feedback to the Government, the public and organisations on such issues as the supply and affordability of houses, our communities and mix of ethnicities, our rates of employment and unemployment, health and wellbeing, the supply of public infrastructure including schools and hospitals, economic growth, and the distribution of New Zealand’s population.
From this information, the Government can make decisions on how and where to spend money on health, education, infrastructure, welfare and so on.
But it’s how you present the data that is the issue.
In early August, StatsNZ released its quarterly report on the labour market for the three months to June 30, which showed that the unemployment rate fell to 4 per cent in the June quarter (from 4.6 per cent in the March quarter), the lowest rate since December 2019. In the same period, wage rates increased 2.1 per cent, average weekly earnings (for full-time equivalent employees, or FTEs as they’re termed) increased to $1,360.62, and average ordinary time hourly earnings rose to $34.76.
“The Government’s efforts to secure the recovery has seen more Kiwis in jobs and higher wages, with unemployment falling to pre-Covid levels and more people in work,” Finance Minister Grant Robertson said at the time.
But here’s where the statistics come in. You only have to dig into another report from StatsNZ, the household living-costs price index, to find that inflation is rising faster than wages – at 3.3 per cent for the year to 30 June 2021. This is the highest it has been in just under a decade, and is a cause for concern for all Kiwis, who are seeing more and more of their pay packets being eaten up by basic day-to-day living costs.
The spiralling costs of transport, namely fuel, and food are the main drivers, along with higher prices for housing, rent and household utilities. And the households most seriously affected? Low- to middle-income earners, superannuitants, and Māori.
Renters are only too aware of the increase in rents – on average $100 or more a week since four years ago. This is in part due to the Government’s inability to build affordable homes. Unfortunately, both Treasury and Inland Revenue are warning that the Government’s new proposed tax on property owners is likely to see rents rise further still. By pushing ‘mum and dad investors’ out of the housing market, and with no supply-side measures coming any time soon, it is apparent that renters will continue to suffer.
Fuel taxes have gone up 28c per litre in Auckland since Labour came into power in 2017, costing a typical family an extra $650 every year. We can expect this to get even worse when the car tax comes into force early next year.
The cost of doing business has also soared, with the Government heaping costs onto business owners without realising this will eventually flow through to consumer prices.
With our borders closed, businesses are unable to get the skilled workers they need from overseas, and with the Government pushing up costs – through unsustainable minimum wage hikes, extra employer-funded holidays, and unworkable regulations – business owners have little choice but to put their prices up.
And there are other major price pressures on businesses that are less obvious to the average consumer. There has been a rapid escalation in wholesale energy prices, not helped by the Government putting an end to new offshore oil and gas exploration – cost pressures that manufacturers, importers, and other businesses have felt all too well.
There are major supply constraints and bottlenecks for the delivery of products and materials, which are not expected to iron themselves out for another twelve months. The cost of transporting a 40 foot shipping container has increased from about US$1200 two years ago to almost US10,000 now. Companies are having to invest heavily in holding stock, where they can, rather than continuing to adopt the more efficient ‘just in time’ approach.
All of this has meant businesses are faced with two options: either increase prices or lose money.
So what’s the answer? We need to take a serious look at what can be done to alleviate some of the skills shortages and regulatory constraints and costs that are holding our businesses back from making their own contribution to getting New Zealand moving again.
We need a coherent energy strategy, and urgent reform of the Resource Management Act to open up land supply.
And we shouldn’t be hitting businesses with $2.8 billion of costs from additional holidays and sick leave that will be taken whether the employee is sick or not.
The Government has been happy to fund a consumption-led recovery over the past 18 months since Covid first reared its ugly head. But there are going to be consequences when our Government is borrowing $110 million a day – every day – as we are currently doing.
Ultimately, consumption-led recoveries leave low-income families and beneficiaries significantly worse off as a result.