The National-led coalition, under Chris Luxon and Finance Minister Nicola Willis, has failed to address the cost of living crisis, with the price of butter in particular an affront to household budgets, instead offering hollow platitudes and tax tricks while the ability of voters to purchase basic necessities worsens. It’s time to demand real relief, starting with making butter affordable again.
On August 6, Stuff reported:
The Global Dairy Trade (GDT) revealed that butter prices had dropped 3.8%, but what does that mean for shoppers?
Butter prices are up around 47% annually in the past year according to Stats NZ, with the average price of 500g sitting upwards of $8.
A tub of butter worth a whopping $18.29 was even spotted at an Auckland supermarket in early July.
Brad Olsen, Chief Executive and Principal Economist of Infometrics, said butter prices dropped or held steady during the last three GDT auctions, declining around 8.6% since the second half of June.
So if global prices have fallen, will we start to see cheaper butter?
Nowhere, not immediately at least.
New Zealand’s dairy industry, led by Fonterra, is a global powerhouse, yet ordinary Kiwis are paying international prices or higher for a staple produced in their own backyard. Export parity pricing means we’re hostage to global market rates, driven by demand from China and the Middle East, despite our five million dairy cows grazing local pastures and polluting local rivers. We're paying a premium to ship our own dairy products abroad.
This system prioritises Fonterra’s yearly NZ$22.82 billion revenue over the needs of New Zealanders struggling to afford the basics.
Nicola Willis, whose past ties to Fonterra as a senior manager raises questions, has become conspicuously silent on challenging this dishonest pricing model. Her refusal to consider a fairer two-tiered system, where domestic consumers pay less than export markets, smacks of loyalty to corporate interests over constituents, and flies in the face of their pre-election promises.
Willis’ claim that supermarkets, not Fonterra, set retail prices dodges the core issue: a lack of competition in the grocery sector, dominated by Foodstuffs and Woolworths, allows unchecked margins to inflate costs further. But all we get from the coalition of chaos is promises of doing something, not any real quantifiable action.
The National-led coalition’s broader economic mismanagement has only worsened the cost-of-living crisis. Luxon’s repetitive mantra, “people are doing it tough,” rings hollow when paired with policies that fail to deliver any tangible relief. Two-thirds of New Zealanders, according to ConsumerNZ, have low confidence in this government’s ability to tackle the affordability of basic necessities...and they're not wrong.
Removing GST from dairy, as some have suggested, was dismissed by Willis due to a supposed $3.3bn–$3.9bn revenue hit, an excuse that prioritises fiscal optics over struggling families, struggling families that will still spend any savings from cheaper butter on other basic necessities. In effect there's no net loss for the government in making butter prices cheaper for consumers, raising a valid question about whom exactly Nicola Willis serves?
The coalition’s tax cuts, touted as relief, have done nothing for low-income households facing skyrocketing prices for essentials like butter, which isn't just a spread but a cultural staple in Kiwi baking and cooking.
In a country that produces enough food to feed 40 million people, no one should be going hungry. Yet 500,000 New Zealanders are accessing food banks or food support services each month, indicating a complete failure by the current system to distribute the nations wealth equitably. Impoverished kids, people the Prime Minister views as "bottom feeders," cannot simply make a Marmite sandwich when their school lunches are inedible if there's no butter in the house, Mr Luxon.
Small businesses, like Kayes Bakery in Southland, are being crushed, forced to import cheaper Australian butter or raise prices, risking declining revenues and closure. This irony, importing butter into a dairy nation, highlights the absurdity of the status quo, and the absurdity of National's neoliberal policies that ensure many New Zealanders miss out.
Consumers are resorting to desperate measures, from driving hours to Costco to churning butter at home, reflecting a deep frustration with a system that feels entirely rigged.
Then there's the environmental cost of intensive dairy farming (polluted rivers, cancer causing aquifers and increased climate emissions) adding insult to injury, as Kiwis pay a premium while bearing the ecological fallout and costs.
The high butter prices aren't helping to pay for the cleanup. Instead, they're effectively subsidising the dairy industry’s massive profits and increased farmer payouts, which aren’t being spent in the struggling economy. Instead, much of these profits service debt, which only enriches foreign-owned banks.
Luxon’s rhetoric and Willis’s inaction are emblematic of a government out of touch with ordinary New Zealanders. We need bold action: regulate supermarket margins, explore domestic price controls, remove GST off of essential items and challenge Fonterra’s export-driven model that is turning New Zealand into a wasteland, all while providing dairy products only the wealthy and sorted can afford.
Willis’s Fonterra connections demand scrutiny...her reluctance to confront the dairy giant suggests a conflict of interest that undermines public trust. But the crux of the matter is that butter should be cheaper in New Zealand, not just for affordability but as a matter of fairness in a dairy-rich nation.
