How many families would be able to afford asset sales shares?
The National Government must front up over exactly how many ordinary New Zealanders it expects would buy shares under its asset sales programme, Green Party Co-leader Metiria Turei said today.
Mrs Turei's challenge came after John Key said the typical family has an income of "$80,000-$90,000" and "there is not a lot left over but in the order of about $1000, there would be many people who would be able to afford that". In fact, the latest Statistics New Zealand data show that the median household income is $67,000 (ie half of families have incomes less than that amount) and the median household has $1,700 in the bank. The household savings rate is 1% of disposable income, or around $600 a year for the typical family.
"Kiwi families do not have thousands of dollars sitting around to buy shares in companies they already own," said Mrs Turei.
"With low wage rises and continuing job losses, families are finding it hard just to make ends meet, let alone having enough spare to play the stockmarket.
"If families do manage to put a bit aside, they're better off putting it on the mortgage for a tax-free return of 6% than chasing a 4% before-tax dividend.
"Only the wealthy, who have received expensive tax cuts from National, would be in a position to buy shares," said Mrs Turei.
Treasury documents show banks have been told to expect up to 250,000 retail investors, which implies at least 93% of New Zealanders wouldn't buy shares in the companies.
"Mr Key needs to explain exactly how many ordinary New Zealand families he thinks would have the money to buy shares under his asset sales programme, and how many would not.
"He must confirm Treasury's figures showing that only a well-off 7% of New Zealanders would buy shares in his asset sales, or explain where the millions of Kiwis on middle and low incomes are going to find the money to buy back what already belongs to them," said Mrs Turei.
Additional Information:
Median Household Income, Statistics New Zealand's New Zealand Income Survey
Budget 2012 document showing household savings rate of 1% of disposable (ie after-tax) income