The 4% inflation rate vs thousands of jobs cut highlights a need to redesign the Reserve Bank inflation targets
Inflation Data Shows Need For A Plan On Climate And Population – CTU
Data today shows headline CPI inflation at 4%, continuing the fall begun in March 2023. Rises are concentrated in particular sectors – especially services. This data also shows that that the minimum wage increase will be half the rate of inflation this year, taking money out of the pockets of those with the least.
“Inflation was being generated by rents, (4.7%), rates (9.6%), and insurance (14%). Rents are rising at the fastest rate since they were recorded in 1999. Housing & vehicle insurance increased more than 20%. These are all in areas that working people can’t avoid,” said CTU Economist and Director of Policy Craig Renney.
“Pricing for goods that in the past have generated inflation such as food are now much more subdued. Vegetable prices have fallen nearly 15% annually according to this report.
“However, petrol prices rose by 12% from last year. This is worrying as petrol pricing tends to lead inflation data. The faster we can transition to an electric vehicle fleet the better.
“Inflation is now in sectors that don’t respond well to interest rate changes in New Zealand – such as insurance. This should give the Reserve Bank a reason to pause and reflect on its future interest rate path.
“Overall, this data suggests that inflation is continuing its long road back to the Reserve Bank rate. In the last three months, inflation was well within the 1-3% band being targeted.
“Inflation is still higher in New Zealand than it is in other comparable countries such as Australia or the USA, where economic and employment growth is also stronger on the back of strong infrastructure spending, government investment, and higher wages.
“Prices in New Zealand are responding to pressures such as population growth and climate change. The absence of both a plan and investment from government in these areas suggests an absence of action on future price rises,” said Renney.
Food prices have dropped because the damage from Cyclone Gabriel has diminished its impact on our food growing capacity but petrol prices are moving which is always a forward indicator of inflation.
The damage to jobs however of vicious OCR rises asks some hard questions about the Reserve Banks inflation range.
We are causing damage to the economy to get to 2% inflation, maybe, just maybe, we need to look at expanding that range to 3.5%?
We just lost 1000 jobs in one day in the Public Service with vast ramifications to the wider society so this Government can afford a $2.9billion tax break for the richest landlords.
How much more economic damage is the Reserve Bank prepared to cause to contain inflation to 3%?
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I really don’t like the idea of unelected bureaucrats being in charge of the economy. I’m willing to be corrected on this, but it just sticks and my craw are some reason.
Have you noticed how msm continually tracks indicators like stock markets and exchange rates and house prices and milk powder and how it’s good if all these rise.
Where are the continual indicators for median wage, rents and price of butter. And the celebratory good news stories for higher wages and lower costs. Hey maybe the TDB could track and publicise the real costs for ordinary people.
And why do journalists never ask the obvious questions of politicians, like what are you doing to bring down the consumer price of electricity? And when?
If the RBNZ weren’t wrecking the government fast enough, you can be sure this government would do the job for them.
Most of the job losses are nothing to do with the OCR, they are to do with government policy. This government will get unemployment up to 8% (the real number will be more like 15-20%) so they can smash the unions, smash collective bargaining and fair pay, smash minimum wages and any smidgeon of workers rights.
Every time National comes into power, well at least the last three times, they engineer a recession to drive down wages, destroy competition for trans-nationals and the monopolies, and drive down asset prices which they can then take advantage of as they have first dibs at increasing bank loans as the recovery begins.
It is almost certain though the RBNZ will delay cuts too long and unnecessarily deepen the recession, which is already heading for something far worse than the GFC in NZ, with probable housing price crashes and bank failures which are far closer than you think.
dont worry the land lords will cut rent by 10% soon and the new wellington tunnel will make it easier to escape the capital because there will be no one living there next year .The ferries will have sunk so anyone want to head over the straight will have to fly
winter is coming veges will be through the roof and fuel will be at record prices in the next 6 weeks .Bet these fuckers dont cut the fuel tax like the last government .
I just read on RNZ news that Minister of Ed said contractors will be employed to write changes to carriculum, replacing those who have just been made redundant. What a fucking dumb bitch.
2 of them will cost more than 3 current employees.