Cost of living crisis: Up to 600,000 Kiwis a month relying on food charity

The new Government faces a big challenge in addressing the cost of living crisis. The New Zealand Food Network has seen a 20 per cent rise in demand for its food charity in the last six months, with up to 600,000 Kiwis a month relying on the charity. Prices are still rising, but this makes it harder for families to make ends meet. The consumer price index (CPI) is still up 1.8 per cent in the September quarter, for an annual rate of 5.6 per cent. The Reserve Bank has warned that in the fight against inflation, we would likely see an increase in unemployment. Families with mortgages also face ongoing pressure, with little indication of when those high interest rates will come back down. The Front Page podcast offers answers to these questions, including when and when the new normal will settle.

Opublikowany : 2 lata temu za pomocą Damien Venuto w Business

The financial situation remains tight for Kiwi families. Photo / 123RF

Inflation data this week showed that prices aren’t rising as fast as they once did, but that doesn’t make things easier for Kiwis already struggling.Prices are still going up, and families around the country are battling to make ends meet.

New Zealand Food Network CEO Gavin Findlay tells The Front Page podcast there has been a 20 per cent rise in demand for the service his organisation offers in the last six months.

The New Zealand Food Network works with growers, distributors and retailers to rescue food from landfills. Food that would otherwise have ended up slowly decaying in a landfill is instead diverted to families in need.

“Six months ago, we were estimated to be supporting about 450,000 people on a monthly basis who are struggling to put adequate nutritious food on the table, and that’s now ticked up to around 600,000,” says Findlay.

“It’s extraordinary that one in eight Kiwis are struggling at some point in the month. I don’t see that changing any time soon.”

While some analysts have been pleased to see inflation track downwards, the consumer price index (CPI) was still up 1.8 per cent in the September quarter, for an annual rate of 5.6 per cent. Every percentage increase places a little more pressure on the families struggling the most.

“It’s almost exponential, because if a family is working from week to week to week and budgeting down to the last $10, a very small shift in costs can actually make a big difference,” says Findlay.

“While inflation is coming down, food prices are still slightly higher. It is coming off the boil year-on-year, but it’s all relative. It’s still much higher than it was a year ago.

The Reserve Bank has warned that in the fight against inflation, we would likely see an increase in unemployment – which will only add to the pressure on these families.

“It’s not just necessarily job losses, but it’s numbers of hours as well. If you have five hours less work a week because there’s slightly less demand for your product in the marketplace, that can be $150 out of someone’s pocket.

“Because the margins are so tight at many families… it means the challenge of putting food on your table for your family is extraordinary.”

Families with mortgages also face ongoing pressure, with little indication of when those high interest rates will come back down.

NZ Herald Wellington business editor Jenée Tibshraeny says it remains unclear when inflation or interest rates will settle to normal levels.

“I’m not convinced that normal looks like what it did before Covid,” she says.

“Economists think the new normal could mean interest rates have to be slightly higher than before. Interest rates might settle at a level above what they were before Covid because some of the drivers in the economy are potentially inflationary.”

Climate change, volatile international relations and global uncertainty are all factors that could play a role in keeping inflation higher in the coming year. So what relief is the new Government offering? When can we expect to see this relief, and will this actually have the desired impact of keeping inflation down?

Listen to the full episode of The Front Page for answers to these questions.

The Front Page is a daily news podcast from the New Zealand Herald, available to listen to every weekday from 5am. It is presented by Damien Venuto, an Auckland-based journalist with a background in business reporting who joined the Herald in 2017.

You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify, or wherever you get your podcasts.

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