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Kiwis to feel impact of higher living costs in 2019

8 January 2019

Kiwis to feel impact of higher living costs in 2019

New Zealanders face another year of higher living costs in 2019 as the impact of bad Government decisions ranging from increased taxes, wasteful spending and poorly thought through regulation start to bite, National’s Finance spokesperson Amy Adams says.

“In its first year, the Labour-led Coalition made decisions that drove up living costs including rents, petrol and electricity prices.

“It will only get worse in 2019 if the Government continues with poor policies which mean it takes more from the wallets of hard-working New Zealanders.

“This is the season when renters are typically back in the market looking for a place to live. That task is more difficult this year because in 2018 the Government made a series of decisions which are driving up rents. Tougher regulations on landlords, higher taxes and the impending capital gains tax are all discouraging the supply of rentals and driving up rents.

“The introduction of ring-fencing of rental losses is expected to raise $190m of tax from landlords when fully implemented. This change alone could add an extra $300 to the average annual rental if the extra tax is entirely passed through.

“Thanks to this Government, Aucklanders are already paying 15 cents a litre more in petrol tax every time they fill up their vehicles. And to make matters worse, there are two more national petrol tax increases scheduled before the next election.

“The Government’s costly policies also extend to the electricity market. New Zealand’s biggest electricity retailer, Genesis Energy, plans to lift prices at least 3 per cent this week, reflecting factors including the ban on new oil and gas exploration. The shift to 100 per cent renewable energy will also inevitably increase prices as less costly generation is displaced.

“This Government has been quick to dismiss negative business confidence but unhappiness over its performance also comes from its own support base. The CTU’s 2019 cost of living and income survey shows 70 per cent of those polled say incomes aren’t keeping up with living costs. Those polled by the CTU are also looking wistfully across the Tasman, saying New Zealand is less affordable than Australia and wages are worse.

“The Labour-led Coalition is slow to learn that being in Government doesn’t give you an open cheque book. The Government’s tax and spend policy approach means the Government has more while New Zealanders have less.

“The Crown accounts show the Government plans to take an extra $17.7 billion of tax from New Zealand families over the next four years compared to projections under the previous Government, even as economic growth forecasts have fallen.

“National wants New Zealanders to keep more of what they earn. We promise not to introduce any new taxes in our first term in Government. Instead we will focus spending on core services such as health, education and transport while eliminating wasteful spending that doesn’t contribute to better outcomes for New Zealanders and their families.”

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