Kerre Woodham: Can you see a light at the end of the cost of living tunnel?

There's a story in the New Zealand Herald this morning about a young couple in Hawke's Bay who are earning good coin, above the average between them, but they're barely able to make ends meet. This is the cost of living election – at least that's what the media outlets are telling us. But I don't know if you heard Enda Brady on with Mike this morning. Have a listen to what he had to say around the British budget. 

"People are worried about energy bills, cost of living, food. I went to the petrol station earlier on to get petrol, so I looked at the prices specifically for you, Mike. We are looking at $4.02 a litre for diesel, and I pay $3.52 for unleaded." 

The British Government releasing the budget said they just want to be able to give ordinary working families breathing room. This is a budget for, in the UK, for the immediate future. It's not setting the country up to recover, it's just trying to give your ordinary working family breathing room. Things are tight there and they have been for a while. People are finding out what they can do without and what are necessities. They're doing that here, but they're also doing it around the world.  

Post-Covid and the money printing, nations who went for that strategy are paying the piper and it's grindy. The prices paid for everyday items such as food, energy, transport, and household bills have risen by between 59% and 78% since the year 2000 in France, Italy, Spain, and Portugal. Between 2021 and 2023 prices increased by 12 to 15% in the four countries. Wages didn't keep up and because prices don't fall back once inflation eases, many households are still feeling the squeeze today. It would be the same in the UK as well.  

In Australia, one in three households are going hungry as the cost of living crisis bites, according to a charity. Many people are reducing meal portions to make ends meet and they're being forced to cut the use of shampoo, toothpaste, and soap. Really cutting it right back down. In Australia, inflation data to be released this week is expected to confirm ongoing price pressures for household essentials, prompting a further interest rate hike from the Reserve Bank when it meets at the start of next month. The biggest increase in prices over the past year has been in petrol, up by almost 14%, but steep lifts in other essentials that Aussies consider their own, like beef 9.4%, lamb 10.1%, milk 8%. Sound familiar?  

Is there anywhere in the world that is doing just fine? I know we have a number of listeners who listen from various points of the globe. Is this the same story where you are? Are governments really finding it tough to meet their obligations, to meet their commitments, to look after those citizens who are not doing well, trying to find jobs for young ones? Again, Enda Brady referred to that in the UK – they've got more than a million young people who aren't in education, training, or jobs. People are really struggling to pay the basic household bills. Same in Europe, same in Australia.  

Doesn't make you feel any better, I suppose, if you're wondering how the hell you're going to pay the household rates, but this is not particular or peculiar to New Zealand. Economies are correcting and contractions, as at least half the population knows, are painful. There are signs that things are getting better globally. A lot of it will be dependent on the situation in the US, Iran, Israel, and that calming down. But even above and beyond that, there are signs things are getting better. Xero reported more business confidence, more sales, more employment, more jobs advertised and people employed. And this has been, this wasn't a blip in the data, this has been ongoing. So things are slowly, slowly improving.  

But in the meantime, in your house, what are you doing without? What have you found is a non-essential just to get by until things improve? Insurances, have you kept all the insurances? A young family I know who should be doing just fine, they concede that as much as anyone, but it's the power, it's the rates, it's the insurance, it's all those. They gave up their pet insurance and what does Sod's Law say? Sod's Law says the moment you do that, in their case I think it was a week, a week after doing that their beautiful cat who had never had a moment's ill health in her long and happy life needed emergency vet care and it was $750 for the first night and rising, it will be a bill that will be big. And of course that's what happens when you give up the insurance.   

Are there insurances you've given up? Are there gym memberships you've sacrificed and you're going online? Are, you know, what is it that you have done to tide you over until things do in fact get better and you see that reflected in the prices you're paying and the wage that you're earning? What have you not been able to afford to give up?  What have you decided to commit to and keep? We were discussing this in the office and a couple of the women said hairdos, getting the hair done, getting the hair coloured, cut, treated, $300 to $400 every eight to nine weeks. They're trying to push it out a bit longer. They're saying no, happy to give up going for a night out if it means we can get the hair done.  

Do you see things getting better? Xero sounded a voice of optimism, a voice of hope going into 2027. I'm not even going to come up with a silly little motto after "Thrive in '25" turned out to be such a dud. Let's not do that again. But do you see things getting better and have you found that you can live without a number of things you thought were absolutely essential? Love to hear what's going on in your house and if you're any of our listeners from around the world, I'd love to hear what it's like where you are. Is it the same story repeated in many languages, in many countries right around the world?