South Taranaki Star
In the blue corner
Inflation sky-rocketing to nearly 6 per cent last year is going to make life even harder than it already is for New Zealanders. The past two years have been hell on earth for most Kiwis, and the inflationary pressure that has arrived on top of the lockdowns and the closed borders will mean we are far worse off economically, and the back pocket of every New Zealander is going to get lighter.
Inflation has not been this high for 30 years. To put that into context, 38 per cent of New Zealanders are under the age of 30 and hence have not seen inflation at this level in their lifetimes.
Of little surprise to many, just under half of those aged under 30 do not own their own home, and median rents have increased
$125 a week under Jacinda Ardern’s watch.
With these numbers, how can we say that we are improving the lives of young New Zealanders when inflation and rental increases are depriving their ability to save and eventually own a home?
Making matters worse, wage growth is stunted at 2.4 per cent. So as inflation drives up the cost of our weekly meals and our petrol, our wages are not increasing at the same rate.
The inability of Grant Robertson to take control of inflation means that the buying power New Zealanders have is going to diminish significantly.
A core contributor to rising inflation is Government spending and while some of that spending has been vital to recover from the lockdowns, much of it has not.
Robertson needs to seriously rethink how the Crown is spending taxpayer money if we are to calm inflation. Spending has been 40 per cent higher throughout his time as Finance Minister than it was under his National predecessors, and this year he is planning to raise that to a staggering
68 per cent more at $128 billion, with $6 billion in new spending.
The fact is that much of the additional spending has nothing to do with recovering from the pandemic and all it does is stoke inflation along, and force the hand of the Reserve Bank to increase interest rates higher than would otherwise be necessary.
When the borders start to reopen we will lose our best and brightest to Australia, because inflation there is half what it is here. That means those moving to Australia will be able to earn an hour’s New Zealand wage in just 44 minutes.
In 2008, we were losing a rugby stadium of people to Australia each year and I fear we are heading back to those times and the only people coming the other way will be
Ultimately, inflation hits everyone, but it hits the least well off Kiwis the most.