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Household Expenditure Statistics: Year ended June 2016
Embargoed until 10:45am  –  02 December 2016
Commentary

Changes to the survey

For 2016, we made changes to the Household Economic Survey (HES). The changes improve the quality of the data, decrease respondent burden, and improve the ability for survey respondents to answer the questions accurately. Expenditure and income types affected by the main changes are mortgages, travel, health, household maintenance, contribution schemes, and self-employment.

See Improving the household income and expenditure statistics for a summary of these changes. 

Household spending increases in most expenditure groups

Between the years ended 30 June 2013 and 30 June 2016, average weekly household expenditure increased by $190 (17.1 percent) to $1,300. Although most expenditure groups increased in average weekly spending, the rise was largely driven by increases in housing and household utilities, and other expenditure (eg interest payments, contributions to savings, and money given to others). Average annual household expenditure for the household contents and services and the communications groups remained flat or had minimal change.

Costs associated with owning a house were behind much of the increase in household expenditure. Housing and household utilities (up $61) had the largest dollar change in average weekly expenditure of all expenditure groups. This included mortgage principal payments (up $24). Mortgage interest payments contributed a $22 increase to the total expenditure of $32 in the 'other expenditure' category.

See Improving the household income and expenditure statistics for information about methodology changes that may have affected this data.

Housing and household utilities continued to be the largest component of total average weekly household expenditure for the year ending June 2016, making up more than one-quarter (25.6 percent) of household spending, followed by food (16.8 percent) and transport (15.0 percent).

Graph, Average weekly household expenditure, by expenditure group, year ended June 2013 and 2016.

Housing costs

Housing costs include expenditure on rent and mortgages (both principal and interest repayments), property rates, and building-related insurance. This information is collected every year.

In the 2015/16 year, New Zealand households spent an average of $327 per week on housing costs, up 10.7 percent on 2014/15 .

This increase was mostly due to households spending more on mortgage payments (up 16.9 percent) and property rates (up 11.3 percent). In comparison, renting costs over the same period increased by 5.1 percent.  

Food

Average weekly household expenditure on food increased by $27 (14.0 percent) in the three years to 30 June 2016, to $218.

All five food subgroups had increases in average weekly household expenditure over the three years. Of these, three were significant: restaurant meals and ready-to-eat food (up 28 percent), fruit and vegetables (up 12 percent), and grocery food (up 10 percent).

Average weekly spending on restaurant meals and ready-to-eat food increased from $49 in 2012/13 to $63 in 2015/16, and drove half the change for food – expenditure on restaurant meals alone increased 50 percent over this period, to $25 a week. The proportion of households that reported eating out increased from 43.3 percent to 51.5 percent. As well as more people eating out, the increase in restaurant meal expenditure could also reflect the increased price of restaurant meals – the consumers price index indicated restaurant meal prices increased 5.2 percent from June 2013 to June 2016.

Graph, Average weekly household expenditure, by food subgroup, year ended June 2013 and 2016.

Transport

The transport group contains expenditure on vehicle purchases, private transport supplies and services, and passenger transport services. It includes spending on petrol, vehicle parts and servicing, and travel by rail, road, air, and sea.

In 2015/16, average weekly expenditure on transport was $195, up $37 (or 23.4 percent) from 2012/13. This was largely driven by increased expenditure on vehicle purchases and passenger transport services.

Graph, Average weekly household expenditure, by transport subgroup, year ended June 2013 and 2016.

The amount spent on purchase of vehicles accounted for most of the increase in the transport group, up $27 from 2012/13. One-quarter of households (25.7 percent) reported buying a vehicle in 2015/16. However, more money was spent on purchasing second-hand motor cars than in any other vehicle group – an average of $45 of weekly household expenditure.

Expenditure for passenger transport services has increased 89.0 percent since 2012/13, and was reported by nearly two-fifths of households (39.6 percent). This increase was driven by international air transport, up 171.7 percent. While the number of New Zealand residents leaving the country for less than 12 months increased 15.1 percent between the 2012/13 and 2015/16 period, international airfares dropped 7.3 percent. Spending on domestic air transport increased 66.4 percent over the same period.

See Improving the household income and expenditure statistics for information about methodology changes which may have affected this data.

The amount spent on private transport supplies and services decreased over the three years, largely driven by expenditure on petrol. Households spent, on average, $6 less on petrol a week in 2015/16 than they did in 2012/13. This is likely to be due to petrol decreasing in price by 11.9 percent over the same period. 

Health

Between 2013 and 2016 there was a significant increase in average weekly expenditure on health – up 42.6 percent to $39 a week. Dental services increased 64.8 percent, to $8 a week, while expenditure on pharmaceutical products, and on therapeutic appliances and equipment increased to $9 (up 29.6 percent) and $5 (up 173.1 percent), respectively. 

See Improving the household income and expenditure statistics for information about methodology changes which may have affected this data. 

Contributions to savings increase

Despite New Zealand households spending more, we are also managing to save more than previously. Average weekly household expenditure on contributions to savings increased 61 percent between 30 June 2013 and 30 June 2016, from $21 to $33. The bulk of this was personal KiwiSaver contributions – which made up three-quarters of all contributions to savings. Nearly half of households (46.3 percent) reported contributing to their savings in the 2015/16 year.  

Income for households and individuals

The following income figures refer to gross (before-tax) annual income. They represent people or households who received that type of income.

Average household income increased 2.1 percent (to $95,898) between the year ended 30 June 2015 and the year ended 30 June 2016. For the same period, personal income increased 1.5 percent (to $48,233). Neither of these increases was statistically significant.

In the three years to 30 June 2016, average household income from all regular sources increased 11.7 percent. This is influenced by households receiving higher income from each source (except 'other government benefits', down 7.5 percent) and by more people moving into paid employment.

Personal income is similarly influenced by these factors. In the three years to June 2016, personal income from all regular sources increased 8.4 percent (to $48,233). People in paid employment are more likely to have above-average income. On average, people receiving wages and salaries earned $50,477 in the year to June 2016, and on average the self-employed earned $57,849.

A large number of people who are not in paid employment receive income from NZ Superannuation and war pensions. Since 30 June 2013, income from NZ Superannuation (including supplementary benefits) has increased 14.5 percent (to $18,556). Over this time the government adjusted NZ Superannuation rates by just over 5 percent. The number of people receiving supplementary benefits with their NZ Superannuation has also increased. 

More income spent on housing costs

The housing-costs-to-income ratio is calculated by dividing total housing costs by total regular income for all households. It is often used as a measure of housing affordability.

In 2015/16, on average, New Zealand households spent 17.3 percent of their income on housing costs. Since the beginning of the series in June 2007 the housing-costs-to-income ratio has fluctuated, but the overall trend has been upward. This means that, on average, households are spending a larger proportion of their income on housing costs. The increase in the ratio for 2015/16 was particularly strong – up 1.3 percentage points. However, this increase is partly due to our changes in mortgage payment calculations.

See Improving the household income and expenditure statistics for information about methodology changes which may have affected this data. Even without the latest year’s data we still see an upward trend in the housing-costs-to-income ratio.

Some households spend more than 17.3 percent of their income on housing costs. In the year to 30 June 2016, about 31 percent of households spent one-quarter or more of their total income on housing costs. For households not owned by the usual residents, almost half (49.3 percent) spent one-quarter or more of their income on housing costs, compared with 22.5 percent of households that were owner-occupied (with or without a mortgage).

Graph, Housing costs as a percentage of total household income, by household type, year ended June 2016.

Life satisfaction on the up

In the year ended 30 June 2016, most people were satisfied or very satisfied with their lives: 

  • 81 percent of respondents were satisfied or very satisfied
  • 13 percent were neither satisfied nor dissatisfied
  • 6 percent were dissatisfied or very dissatisfied.  

This is an overall shift in satisfaction since the 2012/13 survey, as shown in the graph below.

Graph, Life satisfaction, by households, year ended June 2013 and 2016.

Generally, life satisfaction increases with income. For households with income in the lowest 20 percent of the population, 74 percent of respondents said they were satisfied or very satisfied with their lives. This increased to 93 percent of respondents where household income was in the highest 20 percent of the population. 

Most people say they have enough income

Respondents were asked about their capacity to spend money on accommodation, food, clothing, and other necessities. Sixty-four percent reported their income was enough or more than enough to meet their everyday needs. In contrast, 36 percent of respondents said their income was just enough or not enough to meet their everyday needs. 

For households where income was in the lowest 20 percent of the population, slightly less than half (48 percent) of respondents still considered their income was enough or more than enough to meet their everyday needs.

Graph, Adequacy of income, by household income quintile, year ended June 2016.

For more detailed data see the Excel tables in the ‘Downloads’ box. 

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