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Poorer Households Face Higher Inflation

Poorer Households Face Higher Inflation

Living costs for low-spending households increased 2.6 percent in the year to September 2017, Stats NZ said today. This was 1.1 percent more than for high-spending households (up 1.5 percent).

Poorer households experienced a greater impact from increased prices for rents, insurance, and cigarettes and tobacco. In contrast, high-spending households experienced more benefit from decreased prices for telecommunications services, and audio visual equipment.

“Prices increased over the year for essential items like rents, food, and petrol, while they fell for some luxury items,” consumer prices manager Matthew Haigh said.

“Households with more discretionary income have received the most benefit from cheaper high-tech products.”

Living costs for superannuitants and beneficiaries both rose 2.3 percent in the year to September 2017. These two groups also tend to have lower spending habits.

Rising rates and insurance affect superannuitants the most

Superannuitants experienced the highest inflation of all household groups in the September 2017 quarter, driven by rising prices for rates, and insurance. Their overall costs rose 0.9 percent, compared with a 0.6 percent rise overall for households.

“Nearly nine out of ten superannuitants own their own home, so they bear the brunt of rising homeownership costs,” Mr Haigh said.

“In September, rises in local authority rates and home insurance had the greatest impact on this group.”

Local authority rates rose 3.4 percent across HLPI groups in the September 2017 quarter. Rates are set annually and the effects are mainly seen in this quarter. For superannuitants, the cost of rates is a larger proportion of total expenditure than it is for other groups.

Rates account for around 7 percent of expenditure for superannuitants, compared with around 3 percent for high-spending households.

Superannuitants also experienced the largest effect from price rises for health insurance (up 3.1 percent across groups).

Explore living-costs in New Zealand in more detail using our new interactive app.

For more information about these statistics visit

Household Living-costs Price Indexes: September 2017


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