Companies have hiked up the price of fuel, food and electricity this year, leaving families in Aotearoa and around the world facing increasing financial hardship. New Zealand companies are making huge profits in the midst of a cost of living crisis. Their profits have risen by 60% in the last two years alone.
New Zealand’s two main supermarkets are taking more than a million in excess profits every day from New Zealanders just trying to feed their families. Oil companies have been making record-breaking profits around the world. One of the energy companies here has posted a profit that jumped up by nearly 600% from the year before.
This cost of living crisis is driven by these profiteering and under-regulated companies, and it is inextricably linked to the climate and environmental crises. The solutions to bringing down the cost of living are green.
Here are five green things the Government needs to do to fix the cost of living crisis:
1. Make public transport free and build more rail, cycle and bus networks
At the petrol pump this year, many people found themselves anxiously watching the dollars climb as they filled up their tanks. The price of oil has soared, and that has hit New Zealanders hard because successive Governments have prioritised building roads instead of investing in rail, cycleways and public transport. This has all but forced many of us into our cars. The car heavy transport sector is not only getting more expensive to run, its fossil fuel dependence makes it one of New Zealand’s biggest climate polluters, second only to the dairy herd. Luckily, there are cheaper, cleaner options for transporting people and goods.
Now is the time for the Government to ditch plans for new big roads and instead scale up the investment in rail, cycle and bus networks. Along with that, they need to make public transport free, which is really common sense when it comes to dealing with the cost of living crisis. When the Government introduced half-price fares at the start of this year, the number of people using public transport leapt up. Together, these steps will make getting around cheaper and reduce emissions. They will also mean our cities will no longer have to be places full of parking lots, roads, exhaust fumes and noisy traffic jams. With more rail, cycleways and public transport, our cities can instead become places where both people and nature can thrive.
2. Make sure New Zealand’s homes are insulated, warm, dry and energy efficient
Everyone should be able to keep warm in winter without it costing the earth. But as electricity prices rose, many families living in cold, damp homes without curtains, insulation or efficient heating had to turn off the heaters to try and save on their bill. There are still around 600,000 under-insulated homes in Aotearoa. These houses expose families to increased risks of illness and are energy inefficient, costing a lot to heat up and causing more climate pollution. The Government needs to ensure all new homes are well insulated and energy efficient and provide support for retrofitting existing homes. The Government’s existing healthy homes initiative, which provides insulation, heating, curtains and more to lower socio-economic homes, has been an undeniable success story. It proves that the investment in warm, dry homes pays off. The initiative has saved millions more than it cost to implement and has kept nearly ten thousand kids out of hospital. To address the cost of living crisis, the healthy homes initiative and more like it need to be scaled up.
3. Scale up solar and renewable energy generation
The Government can further help New Zealanders save on their electricity bills by boosting homegrown, cheaper and cleaner energy. Transpower forecasts that our electricity production needs to increase by 68 percent by 2050 to meet the growing demand for electricity. The Government can take three immediate steps to accelerate the clean energy transition.
- Introduce a zero-interest loan for household solar and batteries.
- Provide finance and support for community solar and wind projects.
- Remove the regulatory barriers that prevent people from trading and gifting the energy they generate at home.
4. Transform the food system so that it feeds people, not the pockets of shareholders
Intensive dairying fuelled by synthetic nitrogen fertiliser is heating up the climate, making rivers unsafe to swim in and contaminating our drinking water with dangerous nitrates. In a country with six and a half million dairy cows doing all that damage, a single 1kg block of Fonterra’s Mainland cheese soared up to $21.50 this year. Meanwhile, the CEO of Fonterra extracted over $4 million from the food system in 2021, double his paycheck from the year before. Agri-chemical companies that have spent decades getting New Zealand’s farmers hooked on synthetic nitrogen fertiliser also made huge profits this year. Synthetic fertiliser is made from fossil fuels, so when the price of those fossil fuels goes up, as it has this year, those companies put up the price of fertiliser and up go their profits too.
Making huge profits by both harming nature and worsening the cost of living crisis isn’t just restricted to the dairy sector. As people face hard decisions about what to drop from the supermarket list, a single family continues to make themselves grotesquely wealthy off the sale of fish. Fish that their company, Talleys, catches using destructive bottom trawling, which is destroying precious ocean ecosystems. From the beginning to the end of the food system, a handful of people and companies are making themselves wealthy off of New Zealanders just trying to feed themselves and their families. Like the two supermarket giants, which are estimated to make $430 million a year in excess profits.
The Government’s lax rules let companies like Fonterra, Ravensdown and Talley’s destroy nature and take excess profits from everyday people just trying to meet their costs of living. It’s time to change that. The Government needs to start by phasing out synthetic fertiliser and supporting farmers to shift to regenerative organic farming so that the cost of food is no longer hooked up to the cost of fossil fuels, which aren’t getting any cheaper. Then it needs to redesign the rules of the food system so that it feeds the bellies of the many, not the pockets of the few.
5. Make the polluters pay for the transition to a cleaner, greener and fairer economy.
How can the Government afford to build all that public transport and make it free, as well as all the other infrastructure we need to decarbonise Aotearoa and get our farms off synthetic fertiliser? Well, luckily, there’s loads of money around; it’s just in the wrong hands.
On top of Fonterra’s CEO and his massive paycheck, the agri-chemical companies Ravendown and Ballance’s massive profits and Talley’s rich-list status, the oil, energy and banking sector are making excess profits out of raising the cost of living for all of us. BP NZ took $230 million after-tax profit last year, Mobil NZ took $183m, while Z Energy took $92m in just six months. The three big energy companies made a combined annual net profit of $1.35 billion. Genesis Energy’s profits increased by nearly 600%. The total profit of the country’s banks for just the first three months this year rose 8.1 percent from the previous quarter to a record $1.74 billion
The Government can start building up the coffers that we need to fund the transition to a greener, fairer society by bringing in windfall taxes (which are taxes on these big unexpected profits) on all these companies. One-off windfall taxes won’t be enough alone, though, the Government also has to make sure that polluters pay in an ongoing way for the costs they cause from their pollution. Bringing our biggest climate polluter – agriculture – into the Emissions Trading Scheme would be a good place to start.
With all these steps, it is possible for the Government to transition Aotearoa to a fairer and more sustainable place, where everyone can live without it costing the earth.
Join our call on the Government to go further than the Climate Commission’s inadequate recommendations and cut climate pollution from NZ’s biggest polluter: industrial dairying.
