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April 3, 2017 | by  | in Opinion | [ssba]

The Living Costs Conundrum

Ever crack open your internet banking and wonder where the fuck your living costs have gone? I have.

StudyLink defines these living costs loans as “help to pay for day-to-day living expenses” including things like food, petrol, healthcare, and our old mate: rent. They are tied to New Zealand’s Consumer Price Index (CPI), which measures the average cost of a basket of goods to calculate inflation.

The CPI has had a grand 4.3 per cent increase in the last five years, indicative of very low levels of inflation for most of the things we buy. In the basket of goods, Treasury measures the price of things like durries, soy sauce, acrylic house paint, spa pools, nasal spray, and golf club memberships. What that means is if you bought a $200 basket of these goods in 2012, it would cost you $208.60 today.

An incremental, insignificant increase — resulting in an incremental, insignificant increase in living costs payments, from $172.51 on April 1, 2012, to $178.81 on April 1, 2017.

Compare this with the very significant 31.6 per cent increase in rental prices in the last five years for three and four bedroom properties. While living costs payments went up $6, the price of a $140 room went up by $44 per week. StudyLink’s atrocious “increases tied to CPI” policy will make up for a stingy 4.3 per cent of these rent increases. For the remaining 27.3, you’re on your own.

If you were one of the lucky ones that managed to actually get a flat in Kelburn or Aro Valley this year, on average you’ll be paying $202.50 a week just for a room according to the Ministry of Business, Innovation, and Employment. If you were like thousands of other Victoria University students that were forced to compromise with a remote outer suburb flat, you’ve also got substantial transport costs to grapple with. The long and short of it, wherever you are: bye bye “living” costs.

What makes this conundrum worse is that living costs are indeed a loan. Whatever baby boomers might proclaim while resting on their virtuous laurels, living costs are not a handout. A loan is an adult contractual decision to forgo future earnings for present use.

That means the government and voters gain nothing from withholding increased living costs from students, removing future value to New Zealand, and adding additional stress and hardship to an already tethered group of people.

The whole point of a living costs scheme is to even the playing field so each student has a competitive shot at achievement. For some students, whose parents’ pockets aren’t as deep as others, insufficient living costs mean that part-time work on top of full-time study is the only option to supplement the cost of living. Those students whose parents do have deep pockets, and are willing to help with the cost of living, do not face this same burden. Enter stage a cycle of inequality.

The work that the Victoria University Wellington Students’ Association is doing on transport costs is an important first step in acknowledging the unsustainable cost of living for students. The next step is for the Minister of Social Development to take responsibility for the welfare of students — the current state of affairs resulting from a housing crisis ushered in by her own Government’s regulatory and economic mismanagement.


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