
Pushing our buttons to loosen our wallets
The offerings couldn't be more different.
New World shoppers collecting stickers to grab cast iron cookware … Woolworths giving out tin Disney Discs for kids to … well, it's not really clear what kids do with them once they have them.
At Pak'nSave, it's just business as usual – it doesn't do giveaways.
In the past, these campaigns have created social media frenzies, with New World's knife promotion, miniature shops, and little gardens being bit hits. During the so-called 'Summer of Smeg', shoppers took to Trade Me to complete their full set of knives. There were 39,000 searches for them on the site in the seven days after the promotion's launch.
But there's a suggestion that the cost-of-living crisis has taken the excitement out of the offerings.
Reddit users are divided between wanting New World's knife promotion back, or just wanting lower grocery prices instead.
'It feels to me like these promos, people are getting less excited about them as they go along,' says RNZ's money correspondent Susan Edmunds.
'When we started off with the Smeg knives and the little gardens and stuff, it seemed like everyone was talking about it and swapping things, and there was lots of chatter about it online, and I'm not seeing that as much now. '
Is the thought of some flash cookware enough to change a shopper's behaviour, or get them in the door of a different supermarket?
Probably not, says Edmunds.
'We're such creatures of habit when it comes to supermarket shopping that this is more likely to be rewarding loyalty with people who are already shopping there.
'There wouldn't be that many people who are going 'Oooh, Woolworths or New World'? and I'll be swayed to New World by the Smeg giveaway. But I suppose that would happen if you had one on one side of the road and one on the other.'
Kids' pester power is probably worth a lot.
'As more of us shop online, that's less of a factor, because kids don't get any say on where you're online shopping. But I suppose if you've got your kids nagging you to go to a particular shop, then that probably would sway you … but people are so committed usually to 'their' supermarket that they're comfortable with and know where everything is,' Edmunds says.
Having said that, her kids are collecting the Disney Discs and she's 'finding them all over the house – probably Smeg dishes would be more useful'.
She says the New World tie-up with Smeg is helping the higher-end brand to get established.
'This will help their brand recognition. People will start to get more familiar with it and maybe feel more comfortable if they're shopping, and they maybe want a fridge, and they see a Smeg fridge. This all helps with that.'
The cookware being offered at New World doesn't seem to feature in retail stores, although there's plenty of similar, and expensive, equipment.
'But not that stuff, so I feel like this is probably a promotional play for Smeg to try and broaden its potential market, and build up its brand name, and it's got the power of New World behind it. Everyone loves these New World promotions, so it's a win for them [Smeg] from a marketing perspective, and it's a win for New World because you get these quite high-end products at a relatively cheap price … and then I guess it's a win for consumers who get to stock up on – what is it – utensil holders and baking dishes and all sorts.'
Dr Saira Raza Khan (left) and Dr Pragea Putra (right). Photo: Alexia Russell
Dr Pragea Putra is a lecturer in marketing at the University of Auckland Business School.
His shopping behaviour is currently being dictated by the demands of his seven-year-old son, who is collecting the Disney Discs from Woolworths.
He tells The Detail that while New World tends to attract shoppers who are a bit more established, value quality and want nice things in their kitchen, Woolworths is tapping into the family market – parents with kids in tow.
But he thinks Woolworths has missed a marketing trick with its failure to emphasise that the discs it's giving away aren't plastic – they're recyclable aluminium – and that there are games you can play with them instead of just collecting them to look at.
Putra's colleague, Dr Saira Raza Khan, looks at a different form of button pushing; she's an expert in consumer behaviour.
Her research has looked at the best way to get public health messages through, and it suggests that consumers are sick of having the fear factor used against them to get them to change their behaviour.
Khan says gratitude is an underused, but powerful, motivator, and health practitioners should be looking at it more often.
Check out how to listen to and follow The Detail here.
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Otago Daily Times
18 hours ago
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How NZ's tax system compares with other countries
By Susan Edmunds of RNZ In recent months, Treasury, Inland Revenue and an organisation representing accountants have suggested New Zealand needs a rethink of its tax settings. Inland Revenue said taxes would have to increase to cope with an ageing population and CPA Australia said a capital gains tax should be considered. But do you know how much the average person in New Zealand pays, and how that compares to other countries? Infometrics calculated the average tax bill of a household with two median income earners, earning $72,900 per person before tax, not including any Working for Families credits. Chief executive Brad Olsen calculated that they would pay $39,800 to the government, made up about $14,100 in income tax each, and $11,600 in GST. They might pay another $3800 a year in local government rates. "Central government still collects the vast majority of money from households - at still over 90 percent of total funds collected by central or local government going to the Beehive coffers. The proportions have shifted slightly, in 2023 when we ran this same exercise, around 93 percent of tax or rates collected went to central government, and 7 percent to local government. "In dollar terms, we estimate that our median household scenario would be paying around $985 more a year in rates than in 2023, but $3182 more in income tax and GST." Rates rises were more noticeable because households received a direct notice in the mail telling them what they had to pay, Olsen said. "In contrast, most households don't track - or get a demand for - their taxes from central government. For income taxes, PAYE workers never see their income tax as their employer withholds the tax and pays it to IRD. For GST, you don't directly tally up your GST and pay it to the government - it's all part of your daily spending. The difference in how you pay - and how noticeable that payment demand is or not - does behaviourally contribute to how we talk about these various increases. "We spend a lot of time, fairly, on rates increases. That's reasonable scrutiny. But we spend a lot less time on tax payments than rates payments, even though tax payments are 10 times larger than rates payments. "That's also true, in my mind, around current discussions on rates capping. Presumably if it's good enough for central government to impose on local government, it would be good enough for central government to tax-cap itself? For every dollar of additional rates paid in the last three years, tax paid by a household has increased by $3.23." As people earn more through the PAYE system, their income tax bill increases. A report by consultancy OliverShaw in 2023 said those in the top two tax brackets at the time made up 21.2 percent of taxpayers and paid 68.5 percent of income tax in the 2021 tax year. Those earning $180,000 to $300,000 constituted less than 2 percent of taxpayers, but paid 9.3 percent of income tax. But while the dollar value of GST paid is higher for wealthier people, it may make up a smaller proportion of their income because they may save more, or put money into financial assets that do not incur GST. Some wealthier people may also be able to earn income in ways that does not attract as much tax. Simplicity chief economist Shamubeel Eaqub said people might be surprised to see that New Zealand is among the lower-taxed countries in the OECD. On a measure of tax-to-GDP, in 2023, New Zealand had a ratio of 34 percent compared to the OECD average of 33.9 percent. He said the country was only on the higher side of average because many countries had some significantly lower taxes on specific things, such as Ireland's low corporate tax rate. On an income tax wedge basis, New Zealand was third-lowest in 2024, behind Chile and Colombia on a comparison of total tax as a percentage of labour costs. This reflects the impact of Working for Families credits. "There is no right or wrong number when it comes to taxes," Eaqub said. "If we want less public service, we pay less tax, if we want more public services, we pay more." He said many countries had much higher tax bills - France has tax at almost 44 percent of GDP, Denmark at 43.4 percent and Italy at 42.8 percent. "Italy has to but that's why younger people are leaving. There's a cost - if you tax a lot and make younger people poor they might go somewhere else. You can't arbitrarily increase taxes if you're not giving the value people are looking for. You need to maintain the legitimacy of the tax system." New Zealand workers tend to shoulder more of the tax bill than those in other countries, because income tax on individuals makes up such a large proportion of the total tax take. "We have big areas where we don't have any tax," said Council of Trade Unions policy director and economist Craig Renney. "There are no capital taxes, no social security taxes. It means New Zealand's taxation structure looks very different to the majority of developed economies around the Western world. We tend to over-emphasise GST and PAYE. Labour is a smaller share of tax in other jurisdictions." Any conversation about tax changes needed to get away from winners and losers and instead encourage people to consider what outcomes could be gained from higher revenue, he said. "The way we historically structure tax conversations does not help." New Zealand's corporate tax rate is now one of the highest in the OECD, at 28 percent. NZ Initiative chief economist Eric Crampton said reducing the government's structural deficit would require a mix of reducing spending, boosting economic growth and increasing taxes. "I would focus on spending before looking at taxes. Increasing revenue to cover the cost of current spending should depend on decent evidence that current spending delivers substantial value. "If the government demonstrated that higher tax revenue was needed, increasing GST while shifting income tax rates and thresholds to compensate could make sense. Inland Revenue has been looking at different options for ensuring lower-income households would not be made worse off if GST increased. GST captures spending that comes from income that is harder to tax when it is earned, including income from capital gains, as well as spending by tourists. "But first priority ought to be ensuring value-for-money in spending, especially where an ageing population increases fiscal pressure."

RNZ News
19 hours ago
- RNZ News
How does NZ's tax bill stack up?
In recent months, everyone from Treasury to Inland Revenue and an organisation representing accountants has suggested New Zealand needs a rethink of its tax settings. Money correspondent Susan Edmunds spoke to Corin Dann. Tags: To embed this content on your own webpage, cut and paste the following: See terms of use.


Newsroom
4 days ago
- Newsroom
Pushing our buttons to loosen our wallets
It's child pester power versus high-end kitchenware versus 'just lower prices' at New Zealand supermarkets right now. The offerings couldn't be more different. New World shoppers collecting stickers to grab cast iron cookware … Woolworths giving out tin Disney Discs for kids to … well, it's not really clear what kids do with them once they have them. At Pak'nSave, it's just business as usual – it doesn't do giveaways. In the past, these campaigns have created social media frenzies, with New World's knife promotion, miniature shops, and little gardens being bit hits. During the so-called 'Summer of Smeg', shoppers took to Trade Me to complete their full set of knives. There were 39,000 searches for them on the site in the seven days after the promotion's launch. But there's a suggestion that the cost-of-living crisis has taken the excitement out of the offerings. Reddit users are divided between wanting New World's knife promotion back, or just wanting lower grocery prices instead. 'It feels to me like these promos, people are getting less excited about them as they go along,' says RNZ's money correspondent Susan Edmunds. 'When we started off with the Smeg knives and the little gardens and stuff, it seemed like everyone was talking about it and swapping things, and there was lots of chatter about it online, and I'm not seeing that as much now. ' Is the thought of some flash cookware enough to change a shopper's behaviour, or get them in the door of a different supermarket? Probably not, says Edmunds. 'We're such creatures of habit when it comes to supermarket shopping that this is more likely to be rewarding loyalty with people who are already shopping there. 'There wouldn't be that many people who are going 'Oooh, Woolworths or New World'? and I'll be swayed to New World by the Smeg giveaway. But I suppose that would happen if you had one on one side of the road and one on the other.' Kids' pester power is probably worth a lot. 'As more of us shop online, that's less of a factor, because kids don't get any say on where you're online shopping. But I suppose if you've got your kids nagging you to go to a particular shop, then that probably would sway you … but people are so committed usually to 'their' supermarket that they're comfortable with and know where everything is,' Edmunds says. Having said that, her kids are collecting the Disney Discs and she's 'finding them all over the house – probably Smeg dishes would be more useful'. She says the New World tie-up with Smeg is helping the higher-end brand to get established. 'This will help their brand recognition. People will start to get more familiar with it and maybe feel more comfortable if they're shopping, and they maybe want a fridge, and they see a Smeg fridge. This all helps with that.' The cookware being offered at New World doesn't seem to feature in retail stores, although there's plenty of similar, and expensive, equipment. 'But not that stuff, so I feel like this is probably a promotional play for Smeg to try and broaden its potential market, and build up its brand name, and it's got the power of New World behind it. Everyone loves these New World promotions, so it's a win for them [Smeg] from a marketing perspective, and it's a win for New World because you get these quite high-end products at a relatively cheap price … and then I guess it's a win for consumers who get to stock up on – what is it – utensil holders and baking dishes and all sorts.' Dr Saira Raza Khan (left) and Dr Pragea Putra (right). Photo: Alexia Russell Dr Pragea Putra is a lecturer in marketing at the University of Auckland Business School. His shopping behaviour is currently being dictated by the demands of his seven-year-old son, who is collecting the Disney Discs from Woolworths. He tells The Detail that while New World tends to attract shoppers who are a bit more established, value quality and want nice things in their kitchen, Woolworths is tapping into the family market – parents with kids in tow. But he thinks Woolworths has missed a marketing trick with its failure to emphasise that the discs it's giving away aren't plastic – they're recyclable aluminium – and that there are games you can play with them instead of just collecting them to look at. Putra's colleague, Dr Saira Raza Khan, looks at a different form of button pushing; she's an expert in consumer behaviour. Her research has looked at the best way to get public health messages through, and it suggests that consumers are sick of having the fear factor used against them to get them to change their behaviour. Khan says gratitude is an underused, but powerful, motivator, and health practitioners should be looking at it more often. Check out how to listen to and follow The Detail here. You can also stay up-to-date by liking us on Facebook or following us on Twitter.