Making ends meet —that is today’s household name for the game

Press, 13 April 1978, Page 17

Making ends meet —that is today’s household name for the game

New Zealand’s economic recession ha-. united in a common battle the keepers of home treasuries. Regardless of political persuasions, social pretensions, or income brackets, almost every householder or flat dweller has been trying to make the dwindling dollar stretch further.

But just Low much elastic does this tiny, brown and white, rectangular, crumpled piece of paper hold? How soon before, like tired old knicker elastic, it snaps under the strain?

In these difficult times, when more and more people are finding it harder to make ends meet, there are few families who are not practising some sort of economies.

And it’s not just the lower-income or single-in-come families who are struggling, although they are the hardest hit. Somehow, the more money a family has com-

ing in, the more seems to be committed — generally in bigger mortgages at higher interest for a more expensive house, higher council rates, or cars that are sometimes costly to run. Even double-income families are finding it hard to break even, let alone save for a rainy day.

Eventually, something has to give; inevitably, it will be the standard of living.

New Zealanders are certainly not living as well as they did five years ago. How can they? Inflation was a record 14 per cent last year, the cost of living has risen to an alltime high, and wages have lost their relativity to living costs.

Industrial cutbacks have led to the loss of overtime work, cutting vital extra dollars out of workers’ paypackets. And, -worse still, unemployment has increased drastically, with

little prospect of an im* provement. How, then, are New Zealand families managing to make ends meet?

According to a survey carried out last year, only 6.6 per cent of New Zealand housewives were not trying to economise in some way or other on groceries, and 74.6 per cent said that they had no plans to buy new home appliances within the next six months. The survey of 1000 New Zealanders aged 15 and over also showed that 55 per cent felt the country’s economy could only get worse in the next year — the highest percentage to hold this view since the last election. And, according to the survey, only 22 per cent felt that the economy would improve — the lowest percentage since the last election.

Of those who said they were economising at home, the greatest. number (62 per cent) said they

were cutting out luxury foods. The next highest priority (60 per cent) was shopping around for specials:

Others were economising by growing their own vegetables (55 per cent), by making more economical dishes (53 per cent), by doing more home baking (52 per cent), by buying meat tn bulk (42 per cent), by using less meat (19 per cent), and by baking their own bread (11 per cent).

New Zealand’s average wage is $124 a week gross. With tax deducted, this is an average takehome pay of $97 a week for a man with a wife who is not working. If they have children under five, the net pay is $lO6.

Out of this comes, first, the rent or mortgage repayments, depending on

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FELICITY PRICE

whether the couple own their home or live in a flat or State house. Mortgage repayments are likely to be $35 to $4O a week for low-income families qualifying for the housing Corporation’s low-interest rates and long-term loan, but unless they were lucky obtaining a reasonable second mortgage interest rate, their repayments might be higher. Rental is likely to be about the same unless families are living in State houses, in which case the rent is one-sixth of their income, provided it is under $lOO a week. In addition, families living in their own home will have to pay rates ctf about $4 a week, and house and contents insurance of about $3 a week. Food is the next essential. Those families pre-

pared to live on a no-lux-ury, well-balanced diet can get by, according to the Household Budget and Advisory Service, on $31.15 a week (calculated to provide sufficiently for two adults and two children — a boy of 14 and a girl of 10).

But this is a minimum figure, based on budgetbuying, with no luxury, non-essential groceries, and

it was applied in June of last year. Inflation Will have altered the figure since , then. Tn fact, most families would find it very hard to cut b.ack to such a diet. More typical weekly shopping budget for groceries would be about $45 or $5O.

(The New Zealand “Herald” publishes a weekly “Shopping Basket.” column, based on an average household grocery budget for two adults and two children. When the column started, in 1974, the weekly total for meat and fish,

fresh fruit and vegetables, food and non-food groceries, was about $35. Now the figure, for the same items, has reached $57.)

Other essentials are heat and light (about $lO a week on average, taking into account seasonal variations); dentist and doctor’s bills (about $2 a week); and clothing, which can demand considerable expenditure some weeks, especially at the beginning of the school year when uniforms have to be bought, but which can be practically ignored in other weeks.

Clothing, in fact, is the first essential that suffers when the family budget starts to show signs of going into the red. A weekly allowance of $lO to $l2 for clothing a family of four would be far from extravagant and would certainly not keep up with the latest fashions. On such a clothing budget, they would need to rely on hand-me-downs,

seconds, home sewing, and knitting. Our imaginary "average New Zealand family,” therefore, has alreadv spent its net wage of $97 on housing, food, heat and light, clothing, and health care — and then only by a careful budgeting on a no-luxury basis. They have nothing left over for transport, education, telephone, repairs and maintenance, or furniture, let alone such luxuries as entertainment, holi= days, newspapers and magazines, pocket money, or hire purchase repayments.

Obviously, unless the breadwinner is on a net wage of more than $l9O a week, ends just have no chance of meeting. No wonder so many women are rejoining the workforce.

Accoring to the Household Budget and Advisory Service, a family with two children aged four and six would be able to get by on a no-luxury grocery budget of $26.41 (as at June, 1977). This, added to their bigger net income on account of a lower tax rate, would give them $l4 more a week than a family with two older children.

Nevertheless, it is an uphill struggle for all of them. And the running costs of a car —- generally considered in the past an absolute necessity for every New Zealand family — would soon absorb any spare cash.

How does a single-in-come family on the average wage or below it manage to afford a telephone, new furniture or houses hold effects, life insurance, holidays, Christmas and birthday presents, a television licence, newspapers and magazines, not to

mention beer and cigarettes, or a night out at the pub or movies? And if a family of four finds it hard, how does the family with three, four, five or more children

manage on the average wage? If the mother doesn’t go out to work, even parttime, the household-budge-ter must be a miracleworker.