Editorial: Tough times to test our mettle

Photo / APN

The stories of ordinary New Zealanders' struggling to make ends meet, which fill our Insight section today, make sobering reading. When food prices are spiralling and it costs almost $100 to fill up a modest medium-size family car, spending cuts become the order of the day. Put simply, in the country which has always prided itself on being the best place in the world to bring up kids, feeding, housing and clothing a family is being priced out of the reach of those who are doing it.

The October GST hike didn't help and, for most, was inadequately compensated for by targeted cuts in income tax that in retrospect were questionable. But the rise in GST affected only the final quarter in which inflation hit four per cent.

No matter how you slice the statistics, the arithmetic looks ugly. Those who remember the inflationary years of the Muldoon era might be excused for feeling a sense of déja vu - though the difference is that in those days there were wage increases too, and more workers have seen a pterodactyl than have seen a decent pay rise in the last couple of years.

Kiwis have adopted different tactics to deal with the tougher times. Some of the stories they tell us this morning are painful to read, such as that of the man who needed an operation to remove cataracts from his eyes: he has had one eye done and will get the other done later when funds allow.

Others are emotionally affecting for other reasons: a couple cancelled "a big white wedding" in favour of a small ceremony at home: "It was a perfect day, no less special and very romantic," they wrote.

Plenty of sacrifices have an upside. People who are using the car less and using public transport or walking more are doing a favour to themselves and the planet. But such assessments must be tempered with caution, because every piece of expenditure forgone by one person is a piece of income denied to another.

Sure you can save a lot by making your own lunch each day rather than buying it, but if everyone stops buying lunch, lunchbars go out of business. Jobs are lost; tax takes drop; the spiral continues.

The same goes for perfumes and clothing, overseas trips, out-of-town weekends away: they may be luxuries, but the sectors that provide them are part of an economy whose parts are interdependent.

Economising will save you money - but at what cost to others?

It's another way of saying that we're all in this together. The forces that have brought us to this pass - global financial crisis and tectonic shifts in Canterbury - are beyond our control. But certain things are not.

The case becomes more urgent every day for the Government to revisit the avenues it has for revenue, including reconsidering the tax cuts. A national levy would disproportionately hurt those on struggle street.

And as individuals we can begin to rediscover one of the virtues that, before the market-driven reforms of the greedy 80s, made this country great: looking after others as well as ourselves. Tough times can bring out the best in good people. Christchurch has shown us that. We could all take the lessons of Canterbury on board, because the cost of not doing so is too much to pay.