pn 934. Which kind of country do we want to be? One way or the other, Government needs to do something

Inequality

Big firms' profits jump as households face bigger bills

Daniel Smith, in Stuff. Aug 31 2022

At the start of the Covid-19 pandemic, experts warned of a “K-shaped” economic recovery in which the wealthy became richer while those on low incomes missed out.

Craig Renney

Council of Trade Unions director of policy Craig Renney​ said that was now playing out, with clear winners and losers.

Massive profits

The massive company profits reported by companies this month occurring alongside a cost of living crisis was a sign the K-shaped recovery was well and truly here, he said.

“Overall New Zealand company profit has jumped 60% in the past two years. It is certainly the case that the big end of town has done really well and is not struggling in the same way as many SME businesses,” Renney said.

Most energy companies made large profits this year, led by Genesis Energy’s 600% profit increase.

Major construction manufacturers such as Vulcan Steel (91%) and Fletcher Building (42%), also reported big profit gains, as did fuel companies and supermarket chains.

But at the same time, workers were trying to cope with increasing costs of living, high inflation and a lack of meaningful wage increases, he said.

“Workers are falling further behind. The things that are getting more expensive are non-discretionary, which means workers don’t have a choice but to pay them. They are ending up with less choice and less money,” he said.