Putting Fiji's Cost of Living in Perpective

Complaints about the cost of living are not unique to Fiji as the poster on the left demonstrates.

With the cost of living likely to be an important influence on how people vote in September, I thought it would be useful to put some of Fiji's costs in perspective by drawing comparisons with New Zealand costs.

An overall comparison, of course, would show NZ to have a much higher standard of living than Fiji. Its average disposable wage after tax, for example, is over five times higher, and its pensions and social welfare system is more highly developed. NZ's minimum wage is over NZ$15 an hour and Fiji's a mere F$2. There can be no doubt that poverty, however defined, is far more extensive than in NZ.  Fiji is not a "First World" country.

But none of these things are in dispute in Fiji's election campaign. What is in dispute, if the SODELPA campaign is anything to go by,  is the "unreasonable" price of food items and, by implication,  Government's assumed mismanagement of the economy.

Official figures suggest a 60% increase in Fiji food price since 2006, at least partly caused by the 20% devaluation of the Fiji dollar. Mick Beddoes says food prices have risen by over 80% during the same period.  I have no way to determine which estimate is correct, but world food prices have have not been stationary since 2006.  I put the question of the increase in NZ food prices to the most shrewd supermarket shopper I know, my wife. Her off-the-cuff answer was 40%  and much more for some items.

Figure 1

The graph (Figure 1) compares the cost, in Fiji dollars, of ten food items in Fiji and New Zealand. The Fiji data were obtained from www.numero.com, an international specialist on food and other cost comparisons, from multiple sampling at Suva's supermarkets. For the NZ data, I checked the Numbero NZ data, based on Auckland,  against the most recent weekly New World Supermarket mailer and I used their prices if they were cheaper. No "specials" are included in the graph, and the chicken breasts noted were boneless and skinless.  Beer, of course, is not bought in 500ml quantities, and I've no doubt cheaper beer, and chickens, can be bought in both countries. Numbero's task was to compare like with like normal prices. It should also be noted that June is winter time in NZ when prices for fruit and vegetables are much dearer than at other times in the year.

Now for the comparison: the food prices graph shows a mix of prices, but of the ten items listed only two were dearer in Fiji. I would put this down to the higher cost of imports, the economy's smaller scale,  restrictions on the powers of the  Consumer Council,, and most of all to the lack of competition compared with New Zealand.  Others may see the sinister hand of an ineffective government but if this were the case, New Zealand, with its generally higher prices, must have an even more ineffective government,

I also compared the costs of rent for one- and three-bedroom dwellings, electricity, water and garbage collection, presuming the Fiji figures do not include informal housing, which would show Fiji costs even lower. The Fiji and NZ Monthly Charges graph (Figure 2) shows the results.  In all cases,  the NZ household pays more.

Figure 2

One last statistic. Numbero put the Fiji (Suva) average disposal monthly wage/salary after tax at F$1,070, and the NZ equivalent, as I noted in opening is over five times higher,  at F$5,722 and F$5,788 in Auckland. But this is income; not expenditure and the cost of food. With a higher income you can buy more food, but it will not alter its cost. I suspect income inequality is far greater in Fiji, and the "average" household much poorer. But purchased food in Fiji is cheaper than it is in New Zealand.

So there you have it. Some facts to weigh against the political arguments.  Happy voting.  -- Croz