An increasing number of New Zealand families are feeling the pinch from the rising cost of living, as the inflation rate remained at a near three-decade high in the three months to December.
Stats NZ revealed the annual inflation rate in the December quarter remained stubbornly high at 7.2 percent.
This was driven by housing construction and rental costs, followed by increased costs of food.
In his first post-cabinet briefing as New Zealand prime minister, Chris Hipkins said he would be shifting the government’s focus towards “immediate priority issues,” particularly cost-of-living pressures.
He added that the Labour government was already taking action to help households at the pump and supermarkets through fuel tax cuts and improving supermarket competition.
“I do want to acknowledge one of the pressures that New Zealand and Australia are both feeling around food prices at the moment is caused by the weather, and there’s a limited amount that the government can do,” he said.
“But we will continue to strive to look for everything that we can do in that space.”
Hipkins acknowledged the current level of inflation was not sustainable and said the government would do “everything we can bring inflation down in New Zealand.”
International Pressures No Longer Primary Reason for Inflation: National
National party’s finance spokesperson, Nicola Willis, said rates of inflation in the United States and global fuel prices had fallen, indicating that domestic, rather than international factors, were the major drivers of inflation in New Zealand.“Tellingly, in the final part of last year, New Zealand’s non-tradeable (domestic) inflation rate was higher than the international factor.”
Willis criticised Labour’s cost of living payment scheme, which had been budgeted at over $800 million (US$520 million) and sparked controversy when it was revealed that deceased and overseas New Zealanders had also received payments.
“The government can’t keep applying band-aids to this festering sore. Instead, substantive solutions are needed,” she said.
Willis noted that while lower-income families were being “absolutely smashed” by inflation, increasing the minimum wage was no longer a viable option.
Meanwhile, Finance Minister Grant Robertson believes that inflation has passed its peak.
The quarterly inflation increase was 1.4 percent, lower than the previous quarter’s growth of 2.2 percent.