New data shows cost of living crisis worsening

Today’s increase in the Official Cash Rate and new food price data show the cost of living crisis is getting worse, National’s Finance Spokesperson Nicola Willis says.

“Inflation under this Labour Government is so out of control that the Reserve Bank is having to increase interest rates faster than at any previous time in New Zealand’s history. This is the first time ever that the Bank has increased the Official Cash Rate by 50 basis points three times in a row.

“This dramatic tightening means anyone due to re-fix their mortgage in the coming months will get hammered by rapidly rising borrowing costs. Under Labour, a family with a 80% mortgage on an average priced home will pay nearly $350 more per week in interest payments today than when Labour came to office. 

“Adding to the stress for families, Statistics New Zealand food price data out today shows grocery prices up 7.6 per cent compared with a year ago. Milk now costs 10.4 per cent more than last year, yoghurt 14.4 per cent more and potato crisps are up 11 per cent.  

“Wage growth is not keeping up with rapidly rising prices meaning Kiwis are going backwards under Labour, with the cost of living crisis set to bite deeper.

“Labour has no plan to do its bit to address the domestic drivers of inflation. Instead its economic mismanagement has made the cost of living crisis worse.

“Documents I have obtained show Treasury warned the Finance Minister in March that if he further ramped-up government spending that would worsen inflation and drive up interest rates. Instead of heeding this advice the Finance Minister launched a record spend-up in the May Budget.

“The Government’s addiction to spending and its unwillingness to fix immigration settings are making things worse for struggling Kiwis, putting more pressure on inflation and interest rates.

“The Government should adopt National’s five point plan to fight inflation – return the Reserve Bank to a single focus on price stability, reduce costs on business, remove bottlenecks in the economy, restore discipline to  government spending, and prioritise tax relief for workers.”