As the US presidential election date approaches the pundits are confused – polling shows Trump is scoring way ahead of Biden on the economy, despite the economic indicators out of the US being almost exclusively positive under Biden’s watch. Why is this so?
While every economist in the country can tell you you’re better off and the economy is scoring ‘A1 healthy’, how can you possibly believe them when your pay check doesn’t go anywhere near as far as it did five years ago and you’re no longer able to make ends meet?
As a voter when I am told that I am in good shape because GDP is at an all-time high, I contrast the Economist’s version of GDP (Gross Domestic Product) with my own measure of GDP (Grocery Day Pain).
At present in the US there seems to be a disconnect: traditional GDP is high – well, GDP of $28trillion certainly seems a lot to me anyway – yet Grocery Day Pain is by all accounts still crippling for the average American.
It is of little solace to us here in New Zealand where our interest rates remain stubbornly high and GDP growth is still well below target that we are not being told that the economy is looking healthy – we already know what our Grocery Day Pain level has been telling us for some time now: it is still really hard for the average Kiwi to make ends meet.
At a time when we fear our mortgage repayments could sink us next month and we are assured interest rates will not come down anytime soon, at least we have a competitive banking structure that will ensure we are on an equal footing with our overseas trading partners … don’t we?
And at a time when the average Kiwi family no longer goes out for dinner because food is so expensive that they can’t afford to, at least we have a competitive retail supermarket structure that ensures we get the best possible grocery prices … don’t we?
In a country the size of New Zealand, where we aspire to have a standard of living similar to that of other larger Western economies, limitations of scale can be challenging – all the more reason to ensure our economic regulatory infrastructure is highly tuned and well managed.
For those tens of thousands of Kiwis struggling to pay the mortgage and still afford their weekly grocery shop, the need for improved competitiveness in the banking and grocery markets is urgent and imperative.
There is a sense amongst mortgage-paying Kiwi grocery shoppers that politicians and regulatory authorities who are tasked with ensuring competitiveness in those areas need to be more decisive and changes need to come sooner … much sooner.
Although high levels of Grocery Day Pain are a global phenomenon, here in 2024 New Zealand we need change soon. Repeated lengthy government enquiries, industry working parties, green papers and future plan position statements do little to give confidence to average Kiwis that they will be getting the best deals any day soon when it comes to housing finance affordability and food prices.
There is a feeling amongst average Kiwis that when we’re doing it tough, we all need to pull together, but some sectors such as banking and grocery retail seem immune to this ethos.
They may pay lip-service … “we’re here to help” … but rarely do we see their profit levels fall whilst those of their clients and suppliers are squeezed, sometimes terminally.
Maybe it’s time the ‘free market’ wasn’t license for a ‘free ride’. We certainly can’t rely on the health sector to ease our Grocery Day Pain.
