Highest Inflation In Over 30 Years Hitting Kiwis Hard
The Finance Minister must rein in his spending to avoid adding more fuel to the inflationary fire that is hurting everyday New Zealanders, National’s Finance spokesperson Simon Bridges says.
“At 5.9% for 2021, inflation is the highest it has been in three decades. It’s a thief in New Zealanders’ pockets, and it’s the least well-off Kiwis who will be doing it the toughest.
“Parents will have to put food back at the supermarket, workers will only be able to partly fill up at the petrol station, and there’s even less hope for young people trying to buy their first home.
“With wage growth of only 2.4%, well under half of inflation’s growth, New Zealanders are going backward. At the same time, we’ve got rising interest rates and record amounts of government spending.
“Grant Robertson’s spending has been 40% higher throughout his time as Finance Minister than it was under National. This year he’s planning to increase that to a staggering 68% at $128 billion, with $6 billion in new spending.
“While elevated spending was appropriate through much of the pandemic, some easing off and greater focus on the quality of spending is now required.
“The big spend increasingly won’t achieve anything in a constrained economy where each public dollar is just competing with New Zealanders’ investments in scarce resources and workers.
“Even worse, big spending now will simply push inflation higher, which will act as a double whammy, hitting New Zealanders in the pocket twice through the inflation effect and as the Reserve Bank is forced to continue hiking up interest rates, higher than would otherwise be necessary.
“Grant Robertson’s glib response on inflation in the past has been that ‘it’s international’. If that’s a complete answer, then he needs to explain why the domestic part of New Zealand’s inflation is also rising and why Australia’s is considerably lower than ours at 3.5% over the same period.
“More importantly though, he needs to act by focusing on the quality of his spending and reining it in so that everyday Kiwis don’t keep getting burnt by price rises that far outstrip wage increases.”