Glanced over to the NZ Herald stand at the petrol station yesterday. The first thing I noticed: it was proudly proclaiming to be NZ's best newspaper and had the accolade at the very top above the masthead. Eye-roll. Then I looked to the right of it - the price is now $2!
I speculated when the Tories reneged on their tax pledge and put GST up last year that the Herald - for some time at $1.90 would finally reach $2. It is a psychological barrier and it seems they have waited until they got a gong to crow about to sneak the raise in.
Problem is that it's two dollars regardless of whether there is any news or not - today there isn't any, for example, and you'll have to pay whatever the cost of the Weekend edition is now.
As a rule the Herald costs roughly as much as a single stage bus ticket - it's always been that way for as long as I can remember. The infuriatingly deliberately evasive and complicated Auckland Transport bureacracy continues to hide how much a bus fare costs, so I can't even tell you, but the trains at least are at $1.70. The bus is probably 20c dearer, so $1.90 - but I'm guessing because they don't want us to know and they've done a stirling job in making it impossible to find. Wankers.
Speaking of stirling... the NZD is at 50p now - back to the technical parity that existed in the depression when the RBNZ was formed (taking into effect the 1967 dollar conversion split). The first thing the RBNZ did in the 1930s was to devalue against Stirling by 20% to encourage exports, so we are back to the point even before that. With floating rates and massive liquidity behind forex deals it seems going back to setting rates is a financial impossiblity and an historical folly, and yet that was the norm. The UK has achieved (if that is the right word to use?) devaluation by running massive debts. The standard of living in the UK will have to trend down.
What will happen to NZ with a relatively high exchange rate? It has cushioned us against already high US$100/bbl oil but what happens on the down-tick? Externally-inflicted inflation. We have enough internal pressures already to cope with, esp. after the spike from the GST rise. We are seeing it at the low end of standard mass consumption necessities: the bus fares, the petrol, the electricity... the paper. These are the basic units and their relentless rise is what has real effects on living standards. How is Treasury's 4%, 5%, 6% growth forecasts going to have on pricing in the near future?