NZ Perspectives: 2023 and beyond

Many issues are causing major problems among the working classes.

 

Inflation peaked at around 7% and has gone down slightly to 6%, the highest rates for well over thirty years. The banking sector is warning that inflation could increase even further, possibly reaching 9\%. The inflation rate, like the rapidly increasing cost of living in general, has been driven by many factors.

 

 

In itself, the conflict between Russia and Ukraine has not impacted upon New Zealand directly. However, the country’s geographic isolation means it relies upon air and shipping services for both imports and exports.

 

Transportation is a major consumer of oil, which has experienced price spikes as a result of that conflict and the ongoing instability in the Middle East.

 

Oil price hikes always result in the cost of transporting goods increasing. Also, many products we take for granted, like car tyres and plastic, are manufactured from oil by-products. As costs are passed onto the end user or consumer the result is the price of goods increases, often quite dramatically.

 

 

Another key factor is supply chain issues. Although the world economy is recovering from the effects of Covid-19, many airline, shipping and trucking companies did not survive Covid-19. Neither did many of the factories, distribution companies and smaller contracted suppliers that provided many of the parts needed to make so many of the products we take for granted. This not only means that it’s much more difficult to get goods transported efficiently but, in situations where various products are required at once, delays are caused because certain products are arriving late or not at all.

 

 

All of these things contribute to price increases.

 

 

Those price increases would not be so much of a problem if it wasn’t for the cost of housing in New Zealand and the woefully inadequate wages being paid to New Zealand workers.

 

 The New Zealand minimum wage is $22.70 an hour before tax. The median rent in New Zealand is now $600 a week (according to Newshub in an article on March 23rd, 2023). It does not require a calculator to work out that a person on the minimum wage, working an average of 40 hours a week, would struggle to pay such a rent. 

 

 

Mortgage interest rates have also risen to around 7% on average. At this rate a typical mortage payment will blow out to over $1000 per week.

 

 

Even a small increase in the cost of basic utilities like power and telecommunications (phone and Internet) and basic food items like fruit, vegetables and milk have pushed many families into hardship as they try to feed, clothe and shelter themselves on wages that simply don’t keep up with the cost of living. Indeed, it was recently stated in a survey that around 40% of families are worse off now than they were a year ago.

 

Curiously, neither Labour nor National appear to have any solutions beyond National's tedious call for tax cuts for the landed gentry elites and Labour’s utterly inadequate subsidies for things like public transport. This is largely because neither major party appears to grasp just how much the changes within the workplace are impacting upon the lives of working class New Zealanders.

  

The days when people worked for five days a week from 8 or 9am to 5pm are long gone. Large segments of the working age population are working in casual jobs where they find themselves either working too many hours or not enough, often late at night and during weekends. Many minimum wage  workers are doing two or three jobs a week just to make ends meet. Their rights are often uncertain, especially in regards to annual, sick and bereavement leave. 

  

Others work from home where the line between work and home is increasingly blurred by employers expecting workers to be contactable 24 hours a day, seven days a week. The atomisation of workers working from home makes it increasingly harder for workers to discuss workplace issues, let alone mobilise for any sort of militant action.

 

As the cost of living skyrockets, the ability of renters to pay $600 a week or more is already being severely tested. Considering how many of these renters are, in effect, paying the mortgages of property investors the consequences of a sizeable number of renters either defaulting on rent payments or simply moving into caravans or similar accommodation are very serious.

  

New Zealanders tend to invest in housing as it is a low risk, high yield investment; but that can only continue if there are people who can afford to pay the same or more than the investor paid for the properties. When not enough people can afford to buy properties the price of that property begins falling. We are already seeing this happen in many parts of the country. 

 

Usually when property owners cannot sell properties in a hurry, or there’s a downturn in prices, then they rent out the properties. With the numbers of people who can’t afford the rents on offer increasing daily this is putting investors---and the banks who lent the investors the money for their mortgages---in a precarious situation as it is becoming harder to find renters. The hikes in mortgage lending rates and the tougher criteria to get a mortgage are signs that the banks are getting nervous about the housing market.

 

Climate change is also making its presence felt. No longer is it an abstract thing that environmentalists rant on about. Various storms that have struck the northern and eastern parts of the North Island, including Cyclone Gabrielle, have revealed both serious shortcomings with New Zealand’s infrastructure and heavily impacted upon food prices because much of the vegetable and fruit crops grown in New Zealand are in these areas. It’s also impacted upon our exports.

 

One of the consequences of global climate change is that the sea around New Zealand is getting warmer. Destructive storms that are created in the Pacific Ocean near New Caledonia and Vanuatu normally lose most of their power because of the colder seas surrounding New Zealand. However, as Cyclone Gabrielle demonstrated, the warming of the seas around this country means that the power of these storms is being sustained when they reach northern New Zealand.

 

These storms and the warming seas are starting to impact upon our fishing and agricultural sectors. As a country almost entirely dependent upon agriculture for export revenue, the changes in our climate will determine what crops can be grown and what livestock can thrive the best.

  

On the international scene, New Zealand’s foreign policy has largely ceased directly mirroring that of the United Kingdom and the United States. Most trade is now within the Asia Pacific region, with China and Australia being our biggest trading partners. This has also resulted in changes in New Zealand’s foreign policy that has seen New Zealand establishing closer political ties with China. 

  

One of the first foreign visits made by the new Prime Minister Chris Hipkins was to China. This growing closeness to China has alarmed certain xenophobic elements in New Zealand and our traditional allies including Australia, the United Kingdom and the United States. However, our growing economic dependency upon China and the growing influence of the rapidly growing Chinese community within New Zealand (who make up approximately half a million people out of a total population of five million) means that these closer political ties will be driven largely by realpolitik considerations rather than any principles. But human rights and principles such as a `Nuclear-free NZ' are convenient tools for carrying out a diplomatic balancing act between the rival imperialist powers.

 

To a large extent it will be irrelevant as to who wins the 2023 elections. The crises facing New Zealand are largely the result of factors outside the control of the politicians in this country as long as they embrace capitalism. While they can make some cosmetic changes to offset some of the negative impacts of things like supply chain issues and climate change they show little inclination towards addressing the more important bread and butter issues, especially the shameful state of our housing market that has led to the emergence of slumlords, mega-landlords and widespread homelessness.

  

Class issues are at the forefront of people's minds---the cost of living, housing, healthcare, and wages. The Labour government is dampening down expectations while the National party confines itself to taking pot shots at the government---four ministers have either resigned or been fired. The election campaign has been rather muted as both Labour and National try to avoid the important issues. There is a general alienation from politics, and a surprisingly large increase in support for minor parties (ACT, the Greens, the Maori Party and NZ First).  

 

Until August 2023 a hung Parliament was a distinct possibility but the most recent polls indicate that the Labour vote has all but collapsed.  The only questions now are how badly Labour is going to be defeated and who National will form a coalition with.

 

Regardless of the election outcome, the movement of the working class will be the main feature of the coming period. 

  

There have been a number of strikes by teachers, bus drivers and some hospital workers. The class struggle is picking up but not enough to reach a turning point. We are in the calm before the storm. Union leaders will not be able to excuse their inaction by telling workers to be patient and wait for a Labour government to be elected. 

 

Increasingly, working class New Zealanders are looking for alternatives to the status quo. Socialism is the only realistic and practical alternative to the situation that New Zealand faces.