Money and the cost of living
The Cost of Living
New migrants are somtimes surprised at the high costs of goods in New Zealand. We have a relatively small population which can mean fewer economies of scale, and our physical location means it sometimes costs more to get things here.
Pricing can also reflect the high value of New Zealand goods internationally. For example, sheep farmers require local wholesalers to match global prices. International exchange rates can mean that the prices paid here are high relative to the cost of living.
However, our fresh produce is of the best quality in the world, and there is very little that cannot be obtained at a fair price here if you are prepared to shop around.
To see the cost of some basic items in New Zealand visit the Statistics New Zealand New Zealand in Profile webpage. This information is also available in Chinese and Russian
Cash
New Zealand has a decimal currency system – with money broken down into a mix of coins and notes. The smallest coin is 10c, then there are 20c, 50c, $1 and $2 coins. New Zealand also issues $5, $10, $20, $50 and $100 notes. Smaller notes are more commonly used.
Rounding
Many items are priced by retailers to a figure other than the nearest 5 cents. This can also happen when GST (Good and Services Tax) is added to or removed from a sale price.
If you pay cash for something with an price that does not end in 5 or zero cents, most businesses round the amount up or down using the Swedish rounding system. That is if the amount is ends in 1c/2c/3c/4c/5c – round down, and if it ends in 6c/7c/8c/9c – round up
However if you pay by cheque, EFTPOS or credit card, then the amount you pay is the amount on the price tag.
Other payment methods
The usual international credit cards are available - VISA, Mastercard, AMEX and Diners - and are offered through local trading banks.
Debit, or EFTPOS (Electronic Funds Transfer Point Of Sale) cards - nowadays usually just called a ‘Cashcard’ are very popular and widely used. New Zealand was the first country to introduce this payment system in 1986. When you open a New Zealand bank account you will be offered a cashcard.
Credit
The usual credit options exist; bank loans, credit cards, and some short-term credit suppliers. Hire purchase is offered by many retailers on higher value items.
When entering into any credit or hire purchase agreement it is very important to read and understand the terms of the contract - in particular if English is not your first language. If you need someone to help you understand a contract, contact your nearest SSNZ or Citizens Advice Bureau.
Pricing
Prices are similar throughout the country. Short-term discounting is common and it may be worthwhile getting several prices from different suppliers before making any large purchase.
GST – Goods and Services Tax
GST of 15% applies to all retail transactions. If you are in business, maintaining your GST account with the tax authorities (The Department of Inland Revenue) is very important as there can be substantial penalties for missed or otherwise incorrect payments.
Debt Collectors
Creditors who have not been repaid may engage the services of a Debt Collector. However, even if you cannot pay a sum that is due you still have rights. A good short summary of these rights is available from consumer.org.nz
Consumer Rights
New Zealand has a very active and successful consumer advocacy organisation.
Consumer NZ is an independent, non-profit organisation established in 1959 with the aim of getting New Zealand consumers a fairer deal.
A good level of information is available from their website free of charge, with more detailed reports available to annual subscribers, or for a one-off fee.
