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CPI driven by local government price hikes

Thursday, July 15th, 2004

CPI driven by local government price hikes

Blame your local council if your mortgage rates rise again soon, the Employers & Manufacturers Association (Northern) says.

"The annual CPI would have been only 1.8% for the June quarter if central and local government charges were excluded," said Alasdair Thompson, EMA's chief executive.

"The biggest cost increases driving inflation over the past 12 months have come mainly from local councils putting up their rates and fees.

"While the cost of buying and building a new home has gone up 8.8%, the related costs such as real estate agents fees, lawyers, LIM reports, and building inspections have gone up 16.5%.

"Council rates went up 10.4%.

"Water and refuse charges, mostly delivered by your local council, went up 10.3%.

"Central government benefited strongly through its ownership of most of electricity supply - electricity went up 10.4%.

"Price rises beyond New Zealand's control such as petrol - up 19.1% - and steel on their own would not have been enough to push inflation beyond the Reserve Bank's comfort zone.

"Over the past 5 years the government's tax take has gone up 35% compared to Australia's 17.5%."


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