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Source: MIL-OSI Submissions

Māori and beneficiary households feel the greatest impact from higher cigarette prices – Media release

30 April 2020

Higher cigarette and tobacco prices hit Māori and beneficiary households the most in the March 2020 quarter, Stats NZ said today.

Each quarter, the household living-costs price indexes calculate how inflation affects different groups in society, while the consumer price index (CPI) measures price changes for New Zealanders as one group.

Prices for cigarettes and tobacco rose 11 percent in the CPI this quarter as the annual tobacco tax rise took effect on 1 January (see Higher inflation in March quarter).

“The cost of cigarettes and tobacco was one key contributor to inflation for all household groups,” consumer prices manager Sarah Johnson said.

“Māori and beneficiary households felt the effect of this rise more than the other household groups we measured, partly because cigarettes and tobacco made up a greater proportion of their expenses.”

Cigarettes and tobacco made up more than 4 percent of all expenses for beneficiary and Māori households, compared with less than 3 percent for all households as a group.

Rent prices also rose in the March 2020 quarter.

Rent made up more than 30 percent of beneficiary households’ expenses compared with about 11 percent for all households.

Higher rent and cigarette and tobacco prices saw beneficiary households experiencing the highest inflation in the March 2020 quarter (up 1.4 percent). This compared with a 0.8 percent rise for all households.

Annual increase in cost of living for lowest-spenders reaches near 9-year high

In the year to the March 2020 quarter, inflation increased 3.1 percent for the lowest-spending households, the largest increase for this group since September 2011. In contrast, inflation increased 1.6 percent for the highest-spending households over the year.

“Rent increased 3.7 percent in the CPI for the year, but households experienced rent increases differently,” Mrs Johnson said.

See Consumers price index: March 2020 quarter for more information on annual and quarterly price increases.

The lowest-spending households felt rising rental costs more over the year (up 4.6 percent). This compared with a 3.8 percent rise in rent for the highest-spending households.

This difference between household types was mainly due to how much each group sp