Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Superannuitants experience highest inflation

Superannuitants experience highest inflation – Media release

8 November 2016

Superannuitants experienced the highest inflation over the past eight years or so, Statistics NZ said today. Their overall costs increased 19 percent when looking at their typical spending patterns. This was more than double the rate of inflation experienced by New Zealand's highest spenders (up 9.1 percent).

The inflation figures come from Statistics NZ's new data series – the household living-costs price indexes (HLPIs). These look at the inflation experienced by 13 different groups, including beneficiaries, Māori, superannuitants, and 10 other groups of people who have varying income and spending patterns.

"Superannuitants typically spent more than other groups, relative to their income, on rapidly rising costs for expenses such as insurance, local council rates, and energy bills," consumer prices manager Matt Haigh said.

Home-ownership rates are high for superannuitants (about 88 percent own). Most have paid their mortgage (less than 12 percent are homeowners with a mortgage) so their experience of inflation is largely unaffected by changes in mortgage-interest rates.

In comparison, the average weekly earnings used to index super payments increased 27 percent over the last eight years or so.

Overall, price changes for cigarettes and tobacco, rent, and household energy were greater than the general increase in prices over the period. Household groups that spent more on these goods and services experienced these price increases to a greater extent.

Interest costs actually fell over the past eight years as the Reserve Bank dropped the official cash rate. This meant that household groups spending a greater-than-average proportion on interest experienced
this decrease more.

People in the highest-spending group saw prices in the basket of goods they typically buy rise just 9.1 percent. In part this reflected a big fall in mortgage-interest rates – 83 percent of households in this group were homeowners.

Inflation for Māori households rose (up 13 percent) at almost exactly the same rate as for the average household over the last eight years or so.

For the lowest-spending group (lowest expenditure quintile), prices in their basket rose 18 percent over the eight years to the September 2016 quarter.

Difference between the HLPIs and the CPI

"We're often told that CPI does not reflect people's own experience of inflation. These new series should be more meaningful to individual households as they reflect the typical expenditure patterns of different groups in our society," Mr Haigh said.

The HLPIs are different from the overall 'basket' of inflation that the consumers price index (CPI) measures. The CPI measures price changes that New Zealand households overall experience. The CPI is a national average, so it does not reflect price changes seen by different groups in society. The HLPIs
also include mortgage-interest payments in place of the construction of newly built houses.


For more information about these statistics:

• Visit Household Living-costs Price Indexes: September 2016 quarter
• Open the attached files



© Scoop Media

Business Headlines | Sci-Tech Headlines


Commerce Commission: Latest Broadband Report Confirms Improved Performance Of Premium Fibre Plans

The latest report from the Commerce Commission’s Measuring Broadband New Zealand programme shows that the performance of Fibre Max plans has improved substantially. This follows a collaboration between the Commission, its independent testing partner, ... More>>

Air New Zealand: Capital Raise Deferred

Air New Zealand has decided to defer its planned capital raise to later in 2021 allowing more time to assess the impacts of recent developments on the airline’s path to recovery. 'We’ve seen some clearing of COVID-19 clouds recently, with ... More>>

Commerce Commission: Cartel Conduct Now Punishable By Up To 7 Years’ Jail Time

Cartel conduct can now be punished with a term of imprisonment of up to 7 years, after the Commerce (Criminalisation of Cartels) Amendment Act 2019 came into effect today. Cartel conduct includes price fixing, market allocation and bid rigging (see ... More>>

Stats NZ: Auckland Population May Hit 2 Million In Early 2030s

Auckland’s population may rise from about 1.7 million currently to 2 million by early next decade, Stats NZ said today. “Auckland will likely have the highest average annual growth of New Zealand’s 16 regions over the next 30 years, from ... More>>

Stats NZ: March Card Spending Rebounds Despite COVID

There was a lift in retail card spending in March following a fall in the lockdown-disrupted February month, Stats NZ said today. Seasonally adjusted retail card spending rose by $53 million (0.9 percent), compared with February 2021. Visit our website to read ... More>>

PwC: Outcome Of Review Into Air New Zealand Gas Turbines Business

Air New Zealand has received the report into its Gas Turbines business from independent external advisers PwC. Air New Zealand Chairman Dame Therese Walsh says the report identified a range of effective controls in the Gas Turbines revenue contracting ... More>>

LPG Association: Renewable LPG Achieves Emissions Budgets With No Need To Ban New LPG Connections

Renewable LPG can supply New Zealand’s LPG needs and achieve the emissions reductions proposed by the Climate Commission without the need to ban new connections, a new study shows. The investigation, by leading consultancy Worley, was prepared for the ... More>>