Inflation steals from us all

The last election took us back more than 25 years to a First Past the Post result and the government that gave us is giving us an increase in inflation from the same era:

The consumers price index rose 2.2 percent in the September 2021 quarter, the biggest quarterly movement since a 2.3 percent rise in the December 2010 quarter, Stats NZ said today.

Excluding quarters impacted by increases to GST rates, the September quarter movement was the highest since the June 1987 quarter, which saw a 3.3 percent rise.

Annual inflation was 4.9 percent in the September 2021 quarter when compared with the September 2020 quarter. This was the biggest annual movement since inflation reached 5.3 percent between the June 2010 and June 2011 quarters.

Excluding periods impacted by changes to GST rates, the September 2021 annual inflation was the highest since it reached 5.1 percent in the September 2008 year. . .

The Prime Minister who promised to address child poverty is leading a government that is fueling a sharp increase in the cost of living:

The Government needs to urgently recognise soaring inflation as the biggest medium-term threat to the New Zealand economy and halt its wasteful spending, says National’s Finance spokesperson Michael Woodhouse.

“Today, StatsNZ has confirmed what Kiwis all across New Zealand already know – the cost of living is rising fast under the Labour Government.

“In the past 12 months, the cost of living has increased by almost 5 per cent, meaning prices are now rising faster than they have at any time in the past 10 years.

“Grant Robertson has increased the size of government spending by more than 40 per cent in just four years. It is no surprise New Zealanders are now seeing costs increase all throughout the economy.

“Labour’s big spending is hurting the very people Labour claims to represent. The cost of renting a house has now increased 7.8% since just September last year, the biggest increase since records began.

“Prices of fresh fruit and vegetables have increased 9.3 per cent in the past 12 months.

“The increase in prices in just the last three months is the highest three-monthly increase since the 1980s, excluding the one-off increase in GST in 2010.

“The next big cost increase is unfortunately likely to now be mortgage costs as the Reserve Bank is forced to painfully increase interest rates as Kiwis and businesses try to recover from the current Covid outbreak.

“Grant Robertson needs to hit pause on any and all of his so-called Covid stimulus spending that is not fully committed. It makes no sense for the Government to be spraying cash at pet projects like the Green School when the biggest problems now facing the economy are inflation, labour shortages and Covid closures.

“The Covid Fund needs to be used to support businesses impacted by lockdowns and to ramp up the health response to Covid, not as Grant Robertson’s personal slush fund.”

The only winner from soaring inflation is the government that will collect more tax as pay increases push people into higher tax thresholds:

Responding to the revelation of 4.9% inflation for the last year, Taxpayers’ Union spokesman Jordan Williams says:

“Skyrocketing prices are an indictment on the Government’s print, borrow, and spend economic strategy. In general, Government spending is more inflationary than leaving money in taxpayers’ pockets, and Grant Robertson needs to shoulder some of the blame for today’s numbers.”

“The need to adjust income tax brackets has now become desperate. Inflation pushes our wages up into higher tax brackets even when we’re no better off in real terms. Grant Robertson might be pleased to get his hands on all this inflation-driven tax revenue, but during a pandemic this tax grab is unconscionable.”

 

 

It steals from us all, devaluing the real value of wages and savings by making everything more expensive.

It creates a vicious circle. When people know things will cost more in the future they are much more likely to buy more today. That feeds inflation which encourages people to buy more . . .

It will almost certainly force an increase in interest rates which will make mortgages unmanageable for the highly indebted and add to the costs of doing business which will in turn push up prices and that will feed into higher inflation and all of this will hit the poorest hardest.

One Response to Inflation steals from us all

  1. adamsmith1922 says:

    Reblogged this on The Inquiring Mind.

    Like

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