Grant Robertson is right, 6.9% inflation spike isn’t Government’s fault, but it soon will be!
As TDB has been predicting, the second wave of Covid is the economic maelstrom it is creating and the inflation figures released to day see it surging to 30 year highs…
Cost of living soars: Annual inflation hits 6.9pc
Annual inflation has hit 6.9 per cent for the year to March 31, the largest movement since a 7.6 per cent annual increase in the year to the June 1990 quarter, StatsNZ said today.
The figure was lower than some economists had feared with forecasts of up to 7.4 per cent.
The New Zealand dollar fell by just over a quarter of a US cent to US67.86c in the minutes after the CPI’s release. Bond yields were unchanged.
The quarterly inflation rate was 1.8 per cent.
…Grant’s position is, ‘it wasn’t me’…
Finance Minister Grant Robertson doesn’t think Kiwis blame him for inflation and instead believes New Zealanders understand that this is a “global phenomenon”.
As Shamubeel Eaqub points out, extra Government spending in the next budget can’t impact inflation now because the money hasn’t been spent yet, so Grant is right that much of our current spike in inflation is being driven offshore…
As the World Bank and the International Monetary Fund kick off their spring meetings this week, both are sounding a warning: The global economy, they say, is quickly losing steam.
What’s happening: The World Bank has slashed its forecast for global growth in 2022 to 3.2% from 4.1%, anticipating a sharp deceleration from estimated growth of 5.5% in 2021. The IMF’s latest outlook arrives later Tuesday.
World Bank President David Malpass told journalists that “severe overlapping crises” are weighing on the recovery.
“There’s Covid-19, inflation and Russia’s invasion of Ukraine,” he said on Monday.
Developing countries, many of which are facing high levels of debt and a plunge in the value of their currencies, as well as soaring food prices, are of particular concern, he added.
Breaking it down: Around the world, engines of growth are sputtering as prices rise and the war in Ukraine wreaks havoc on strained supply chains.
…however, the Governments decision to pump billions into the banks to fund property speculation has seen the wealthiest amongst us $1Trillion richer, and Grant is responsible for that…
Wealthy nearly $1 trillion richer since Covid began – Hickey
An economic and political commentator says since the Covid-19 pandemic reached Aotearoa, the rich have become richer and the poor have become poorer – in part due to the Government’s policies.
…if we can look after the rich, we have an obligation to the poor.
Here’s the reality, the inflation spike is not a transitory phase, it’s the new reality.
Nearly 400 million people across 45 cities in China are now under full or partial lockdown as part of China’s strict zero-Covid policy. Together they represent 40%, or $7.2 trillion, of annual gross domestic product for the world’s second-largest economy
…add the Ukrainian war and the instability to wheat and base line manufacturing in metals prices alongside the impact on developing economies…
Smaller countries are also struggling. Many borrowed heavily over the past decade to deal with the effects of the 2008 financial crisis and the pandemic. Now, interest rates are starting to rise, just as the prices of essentials like food and fuel leap.
…and you have geopolitical shockwave after geopolitical shockwave hitting us and snapping neoliberal free market global supply chains.
Grant and Labour can be blamed for what’s happening now, but they will be blamed when things get worse by the end of the year because of the predictability of these black swans all landing at the same time.
This is why the Government must seize the possibility of fully funding universal services as a means to counter the cost of living crisis.
Free public transport, free lunch and breakfasts at school and breaking the Supermarket duopoly by setting up a new 30% player will do more to lower the cost of living than any tax cut.
Labour must have courage and vision to make fundamental bold policy changes that directly impact the pockets of renters and first time home buyers alike.
If they don’t they will get blamed come December.
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Some serious rent controls would do the most to cut the cost of living.
Actually, in a sense, I do blame Grant Robertson for this period of high inflation as I do see at least a part of it to be a direct consequence of both economic and social policies that his government has chosen to, or chosen not to, implement.
For example, this Labour government has curtailed the price of petrol but only for three months and only after at least two years of high petrol prices which have made it difficult on the majority of Kiwi families.
So Frank now property prices coming down is a bad thing? I know it is for Luxon that’s why he wants to bake in the spike by killing the bright line impact. From memory he also made noises about a bad time for interest rates to go up.
As for COVID disruption that’s a way too simplistic summation as it implies if the government didn’t do anything we would be sweet. Look around globally and you’ll find those economies that were “living with it” basically had supply chain disruption and more dead people.
I have to agree with your take on the election.
They responded to transport costs correctly and fast. Well done. But good luck putting that tax back on fuel, it is not going to happen without definite vote losing consequences!
They always fail to mention their direct involvement in housing inflation and nearly 4 and a half years of timid tinkering is now biting them quite rightly in the arse. Not grabbing the bull by the horns is their fault.
And stuffing about with the piss weak supermarket recommendations from the Commerce Commission is another failing. Food will carry on going up and up and the duopoly will carry on getting even richer!
Time is running out.
I agree wholeheartedly.
Thank you for your insight, and I have noticed a streak of inspired intellectualism from most of your comments.
Minister Robertson also allowed the changes to the RBNZ taking its focus off just inflation which has led to an utter cluster happening under Orr awful leadership. Then let’s consider masses of really shit spending on daft things like the MAMIL’s bike bridge, that train to nowhere, etc. on top of banana’s increases in the minimum wage.
So yes, there’s inflation across the world but Minister Robertson will knows that he’s poured so much fucking petrol onto an already raging dumpster fire of an economy that he’s made it far far worse than it needed to be. If he doesn’t then that’s actually worse.
Of course he’s going to deny it as he has to – to admit it would seal his fate and confirm what we all know but many here won’t ever admit which is that Labour in NZ always drive our economy into recession and blow every budget they can on stuff that doesn’t do anything other than make them feel good about themselves (or in Helen Clark’s time, buys an election)
Frankie, please don’t tell me you agree with Nationals 5 point plan because if things are bad now and Labour adopt Nationals 5 point plan, then be sure of one thing, be sure to bring a good supply of body bags!
https://www.stuff.co.nz/opinion/128414424/national-on-inflation-dont-blame-overseas-the-answers-are-at-home
It’s either Grant Robertson’s fault or Adrian Orr’s fault and Grant Robertson said he was happy with the RBNZ’s actions during COVID which means Granty boy, it is ALL your fault. He is totally out of his depth, and it shows.
96% govfnment failure. They have been running a sort of double entry book – high inflation on the basic – housing and low inflation on the rest. Guess who gets hit the most, the poor are punch drunk. Get the wages up, gradually in steps but transfer some money to where it can’t be grabbed by other parts of the government, landlord included. Just do it ..gggggggggggggggggggggggggggggggggggggggggggggggggggggggggggggrrr
Government has ultimate control over the currency. Therefore it is responsible for inflation of the currency even if it delegates responsibility to the Reserve Bank.
It is absurd for a Labour government to blame external influences when it was a Labour government which decided to completely open the domestic economy to foreign trade and investment and, to a large degree, to foreign persons and a Labour government which clings tenaciously to that policy.
“Inflation is a global phenomenon” the Prime Minister informs us. But it isn’t. It is a phenomenon that affects “the states we like to compare ourselves with”, that is the imperial/colonial states which are in headlong economic, cultural and moral decline.
The apologists for the colonialist regime are desperately casting around for excuses and solutions where there are none to be found.
Geoff what do you mean “inflation of the currency”? I am not sure who we should be comparing to. I would question what countries are not seeing inflation increasing. The OECD might only be 38 countries but I hardly think others would be immune.
I used that phrase “countries we like to compare us with” because it is beloved of New Zealand politicians. The countries they like to compare themselves with are, of course, countries that are doing no better than themselves, or preferably a little worse, with respect to whatever indicator or parameter is at issue.
If you look you will see that China and Japan and many other nations have much lower rates of inflation than New Zealand or the United States. So in this context China and Japan are not “countries we like to compare ourselves with”.
The term “inflation of the currency” is to distinguish the phenomenon from other forms of inflation, such as inflation of a tyre or inflation of a balloon.