blogging it real

Rates increases you say?

I few months ago Waitakere City Council sent out a decent sized flash looking questionaiire on what services we think they should provide, how important things are to us, what our priorities are, would we be willing to pay more etc.

Well it looks like they have taken the results and run a fucking marathon with them because they are set to go up astronomically which is going to leave this household eating stale bread and muddy water.

Here's the budget at the moment:
Monthly Income after tax (for someone with 6 years of tertiary education in a VERY IMPORTANT JOB - namely a secondary teacher a few rungs up the pay ladder)
$2650 (minus retirement scheme and PPTA fees)
minus mortgage repayments
$1441
minus power bill
$1349
minus phone
$1272
minus internet
$1225
minus food
$526
minus petrol
$345
minus house/car insurance + rates (Waitakere City and ARC)
42

So we have 42 dollars to see us through the month assuming the car doesn't need fixing and the house doesn't have repair 'issues'. So roughly $1.40 a day.

It sounds like one of those ads on TV for sponsoring a child. Of course that's after we have laden our table with fine foods like spaghetti, toast and refresh drink mixes.

Our rates bill at the moment is $1210 annually and the prediction is that the bottom level by about 2010 will be $2,700 in Waitakere City with the upper limit being around $4,100 (a mere 14% or so of your average wage after tax in New Zealand, remember you have already paid 12,000 tax and have to pay regional rates on top of that, so that hypothetical NZer would be paying over 16,000 of their 42,000 to the government to run the country). But back to us because after all I only worry or care about myself. Basically we will be losing money and in debt without much choice, forget about not saving and not being disciplined and all that crap. We won't have a choice.

I pity all those young folk out there who are educated (or not) and have got decent jobs and have been working hard for years. Basically if you are buying in the Auckland market (or other main centres) you are, to put it mildly absolutely screwed financially. I was able to buy a cheap house by Auckland standards in a good wee deal, and put quite a lot down as a deposit after saving IN KOREA (I, in my wildest dreams could not have saved 10% of the same amount in New Zealand) so our mortgage isn't too huge although it will take 22 more years to pay off, but when you tack on the repayments to the ever increasing rates you can forget words like 'disposable income'.

I was going through my documents at home and here's a nice summary of what the bank has sent me in the past two years

Dear Mr and Mrs $%&@%#$$!

We wish to advise you of a change in the interest rate charged on your term loan.

New interest rate 7.75% p.a (effective 31 May 2004)

2 months later another letter saying it's up to 8.00%

1 month later another letter saying it's up to 8.25%

2 months later another later saying it's up to 8.50%

1 month later another letter saying it's up to 8.75%

A 5 month reprieve before a nice letter says it's up to 9.00%

A 7 month rest (they must have run out of paper for letters teling customers of interest rate hikes) before a letter saying it's up to 9.25%

Now fully stocked with stationary again they send out another letter in January informing us that the rate is now up to 9.55%

I'll keel over dead when we get a letter in the mail saying that interest rates are dropping.

So quick summary.
Wages are piddling up at speeds of 3.3% (artifically inflated by the likes of Cullen and CEO's no doubt) (And Cullen, prepare yourself for a teacher strike next year old fulla).

Meanwhile rates are set to go up by over 100 dollars a month
and petrol has gone up by about 50 dollars a month

You would need an average wage increase of about 4.35 merely to cover those two alone let alone all the other increases in electricity, regional rates and water rates.

Not that I'm complaining or anything (oh yes I fucken am). I'd rather be living this life than life in any of the other 20 odd countries of been through.

But just for good measure in the herald:

Middle-New Zealand feels pinch
Sunday July 16, 2006
By Miles Erwin

Skyrocketing household costs are squeezing even comparatively wealthy New Zealanders out of their homes.

One Auckland debt advisory service said it has been inundated with enquiries following rises in household bills and petrol prices. And it's not just people on lower incomes struggling to make ends meet.

Pam, of Auckland Central Budgeting, told the Herald on Sunday she is seeing people on $100,000 a year. "We have people on $2000 a week who can't survive. They're definitely feeling the pinch with the increase in petrol and energy bills."

She said some middle-income families have only $40 a week left after paying their bills[ah that would be bliss I tell you], . Increased power prices council rates and fuel are the main culprits.

According to Statistics New Zealand, energy bills have gone up 4.6 per cent since last year. Fuel costs are a whopping 23.5 per cent higher, and local authority rates are 7.6 per cent up on last March. Households charged for water face a bill 13 per cent higher than last year.

This compares with overall wage increases of only 3.3 per cent.

The high cost of housing is part of the problem. Ms McKenzie said many families have recently bought expensive houses and are juggling a hefty mortgage with the ever-increasing costs of running a home. She describes these people as living on the edge of their finances [is there such a thing as an inexpensive house anymore?].

"People have over-committed themselves. A marriage break-up or redundancy can really throw people. Because of the value of the house, you can keep borrowing against it - now a lot of people don't have the equity because it's all borrowed."

Mortgagee sales are on the rise - a trend noticed by real estate agents. Paul Humphries of Barfoot and Thompson said top-end mortgagee sales are becoming more common. "We are seeing more higher-value houses in mortgagee sales this year and a decrease in cheaper houses. That's been really quite noticeable."

Bank of New Zealand chief economist Tony Alexander said there has been a significant increase in the number of mortgagee sales. He said the main problem for middle-income New Zealanders struggling to meet budget is local authority rates.

"People are getting especially concerned about rates because there's nothing you can do. You can drive less, you can eat fewer anchovies, you can buy fewer CDs. But with local authority rates there's nothing you can do but shift house."

Escalating household costs leave less for the finer things in life. Restaurant patronage is down, pubs are short of drinkers and hotels are struggling to fill rooms [restaurants? pubs? hotels? what the fuck are they?!].

Bruce Robertson, chief executive of the Hospitality Association, said the industry is down about 10 per cent on last year. And the "churn rate" - the number of people leaving the industry - is at a high, around 22 per cent.

"There are more properties turning over and that's because people are finding it tough. We've seen a lot of money disappear into the petrol pump and power bills," he said.

Alistair Rowe, chief executive of the Restaurant Association, agrees. "What we are hearing from industry is it's pretty quiet. If you're putting $90 into the petrol pump instead of $50, something's got to give.

"They won't go for a coffee and they won't go for brunch. People just don't have the disposable income to spend," said Mr Rowe.

And if it wasn't for big hit New Zealand films such as The World's Fastest Indian and Sione's Wedding, the country's movie industry would be suffering, too.

Joanne Watt, chief operating officer at Village SkyCity, said the movie audience was about the same as last year, with the Kiwi films giving the industry a welcome boost.

The big squeeze will have serious economic effects on families who will face the choice of cutting back on expenditure or watching their savings whittle away.

But with a reported household savings rate estimated to be minus-18 per cent - the lowest among developed nations - Mr Alexander said there's only one likely outcome.

"If people's income are being squeezed, they will look at cutting back their casual spending - or they'll dis-save. That's the New Zealand way," he said.

Family sick of living in the rat race

It's been a hellish 12 months for the Barretts - mum Dawn had a skin cancer operation, then a car accident. Last week dad Mark had an operation on a carcinoma.

Dawn's brush with cancer forced the family of five to re-evaluate what's most important in life. "It was a bit of a struggle. We got in such a rut - just to pay bills and work," she said. "We weren't putting anything aside and just felt we were sick of living in the rat race," said Mark.

So Mark cashed in his 20-year super scheme to reduce the mortgage and have a holiday. "We thought: 'let's not be a slave to our mortgage and spend more time with our kids'."

Dawn's illness pre-empted the changes. "We considered downsizing the house. Or we might have gone back to Christchurch, where it's cheaper."

Most of the Barrett earnings go on the kids - Felix, six, Max, four, and Toby, two. Mum and Dad's only indulgence is takeaway pizza once a week.

Mark works in insurance and Dawn works part-time at Auckland Hospital. Their combined yearly income is about $85,000. The super scheme helped cut the mortgage bills from $1000 a fortnight to $300. But even then it's a bit of a struggle - they still don't put any cash away. The latest round of bills has cost the family $1301. And Mr Barrett's policy? Close your eyes. "They all seem to be about the same from rates to water to telephone. You don't look after a while."

When Dawn crashed the car, Mark paid $2000 for an older model car just to get him to work. "But I still pay $77 a tank - I don't know where it goes."

The family has been able to supplement its income, though. They now have a German exchange student, paying $200 a week, which helps pay the bills. "It's also nice for the kids to have someone from a different culture around," said Dawn.