20 January 2016

Low inflation provides opportunity to tackle big economic problems

Low overall inflation provides ideal economic conditions for the Government to tackle snowballing housing costs, stagnating wages, and increasing climate pollution, the Green Party said today.

The Consumers Price Index released today showed 2015 experienced the lowest level of annual inflation since 1999, at just 0.1 percent.

“Relatively high GDP growth, low inflation, and low interest rates have created good conditions for the Government to invest in tackling the big economic issues like climate change and inequality,” Green Party finance spokesperson Julie Anne Genter said.

“National often says that low inflation helps households’ purchasing power but what they don’t say is that nearly half the workforce didn’t get a pay rise last year and housing costs have skyrocketed, especially in Auckland.

“The economy has become unbalanced and now is the right time to rebalance it with a capital gains tax (excluding the family home) and more affordable housing developments, and to raise incomes for struggling families by increasing the minimum wage.

“Low inflation and the low oil price means now’s the perfect time for a more effective carbon price to kick-start the transformation to a clean economy.

“With low inflation meaning the cost of things like fuel, vehicles, and computers is low, giving staff a pay rise should be an affordable option for many private and public sector organisations right now,” said Ms Genter.

ends

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