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Source: New Zealand Parliament – Hansard

Question No. 2—Finance

2.BARBARA EDMONDS (Labour—Mana) to the Minister of Finance: What recent reports has he seen on the New Zealand economy?

Hon GRANT ROBERTSON (Minister of Finance): Statistics New Zealand reported last week that the Consumers Price Index for the June quarter was up 1.7 percent, taking the annual rate to 7.3 percent. This level of inflation is putting pressure on households in meeting their costs of living. The quarterly rate of 1.7 percent was lower than the March quarter and economists believe that June will represent the peak of the inflation cycle, albeit that inflation is expected to remain elevated above the levels we’ve seen in recent years, for some time. New Zealand is not the only country experiencing higher prices driven by global factors. Inflation is at 9.4 percent in the UK, 9.1 percent in the United States, 8.1 percent in Canada, and at an average of 9.6 percent across the OECD. We are well positioned to support New Zealanders dealing with the global cost of living pressures, thanks to our economic plan and responsible fiscal management that have delivered record low unemployment and debt levels that are among the lowest in the OECD.

Barbara Edmonds: What steps is the Government taking in response to the impact of global cost of living pressures on the economy?

Hon GRANT ROBERTSON: The Government is acutely aware that many New Zealanders are doing it tough, and we are taking action to support them. We’ve boosted the incomes of seniors, students in low-income families, while a million New Zealanders are receiving the winter energy payment. From next Monday, the targeted cost of living payment will deliver around $27 a week for low and middle income New Zealanders aged 18 years and over who don’t get the winter energy payment. In response to high fuel prices, which have been significantly driven by the war in the Ukraine, we have cut the fuel excise duty and road-user charges and halved public transport costs. Last week, we extended these reductions until the end of January next year to give people certainty over the coming months as prices continue to move around at the pump. As we’ve acknowledged many times in this House, 2022 is a tough year and it is a volatile and uncertain environment for Kiwis. However, we are in a strong position to deal with this and we are supporting those most in need.

Barbara Edmonds: What measures are being taken to address the underlying causes of high prices and its impact on the economy?

Hon GRANT ROBERTSON: We are doing what we can to ensure New Zealanders are paying a fair price. For example, we’re taking action in the supermarket sector to boost competition and get better outcomes at the checkout, we’re closely monitoring margins in the fuel market to make sure savings are being passed on at the pump, and we are looking to the longer term by reducing our dependence on volatile commodities like oil by decarbonising our transport fleet, including through initiatives like the clean car discount. We have also put in place our immigration reset to allow us to attract workers to get the skills we need. And we have restarted schemes such as the working holiday visas to help the recovery in tourism and hospitality. The Commerce Commission is carrying out a market study into building materials and this will confirm what many New Zealanders believe, I am sure—that we do pay too much for our building supplies—and we do need to take action in this space as well. There is no single or easy solution when it comes to cost of living pressures and the impact of the global inflation spike here in New Zealand, but we will continue to support New Zealanders to respond to these challenging times.