Cost of living jumps 8.2%

The cost of living rose 8.2% in the December quarter, when people’s costs were compared with the same period a year before, Stats NZ has reported.

High spenders were hit harder than most by the most recent rises in living costs, it also found.

Stats NZ reported last month that annual inflation was 7.2% in the December quarter, which was unchanged on the inflation rate in the previous quarter.

But its measurement of the cost of living is more comprehensive in that it takes greater account of people’s housing costs.

It takes into account people’s mortgage payments, which have been rising sharply because of higher interest rates, though not the actual cost of new housing which is reflected in its inflation figure.

Stats NZ said the highest spending households – those who were ranked in the top 20% for their spending – experienced an average 9.4% increase in their cost of living over the year.

The lowest spending 20% of households saw their costs rise on average by 7.1%.

The average rise in the cost of living for Maori was 8.1%, for beneficiaries it was 6.9%, and for superannuitants 7.4%.

Stats NZ indicated the main explanation for the differences was that the highest-spending households tended to spend more of their expenditure on interest payments than other household groups, and that those had been rising at a faster pace than other costs due to interest-rate rises.

Poorer households will have been disproportionately impacted by the rising cost of food, which has been rising faster than overall inflation and accounts for a greater share of their budget.

But that appears to have been offset by rent increases lagging inflation. Rents make up about a third of beneficiary’s expenses, for example, Stats NZ said.