Hon Grant Robertson

Minister of Finance

The Government will sharpen its focus on supporting New Zealanders dealing with cost of living pressures in a difficult global environment as annual inflation remained unchanged.

“We know it is hard out there for New Zealanders in making ends meet. As the Prime Minister has said, the Government’s focus will narrow to support New Zealanders struggling to pay their grocery bills and mortgages,” Grant Robertson said.

“The Government is committed to addressing the bread and butter issues in front of New Zealanders and the cost of living is top of that list.

“The Government is also doing its bit by bringing spending down to more normal levels and reduce overall demand in the economy. The Treasury is forecasting real Government consumption will fall by 8.2 percent over the next couple of years, which they say indicates that fiscal policy is supporting monetary policy in dampening inflationary pressures.

“Stats NZ reported the Consumer Price Index was 1.4 percent in the December quarter compared with 2.2 percent in the previous quarter and indicating that inflation has peaked. The annual inflation rate was unchanged at 7.2 percent and below the Reserve Bank’s forecast of 7.5 percent.

“Inflation is continuing to be heavily influenced by global factors, including higher international airfares and imported food and building materials prices. The prices for vegetables, fruit, milk, cheese and eggs are set globally, with tradeable inflation higher than the goods and services that don’t face international competition.

“Domestically, bad weather is also unfortunately continuing to affect food prices, with adverse growing conditions contributing to a 20 percent rise in fruit and vegetable prices.

“Many economies around the world are feeling the effects of a global environment that is putting pressure on prices, with New Zealand’s inflation rate of 7.2 percent below the OECD average of 10.3 percent. Economists are forecasting New Zealand’s inflation will remain elevated for an extended period compared with what has been experienced in recent times.

“There’s no overnight fix to the cost of living. We’re taking a range of actions to ease the pressure on families. We’ve extended fuel tax cuts and half price public transport. We’re also increasing support for seniors, students, beneficiaries and those on Working for Families from 1 April, along with making it cheaper for more families with our childcare package.

“We’re also tackling the underlying causes of high prices. We’re taking action at the petrol pump and supermarket check out to improve competition and ensure Kiwis pay a fair price. We are also moving to reduce our reliance on volatile global energy markets through our climate change investments, including initiatives like the Clean Car Discount to decarbonise our transport fleet.

“The Government will be making further decisions soon on its priorities and policies that will make a real difference in the long term to middle and low income New Zealanders and the small businesses who are doing it tough.

“Our strong economic and financial management has put New Zealand in a strong starting position to face what will be a difficult 2023. Unemployment is near record lows and incomes are rising, public debt is substantially below that of most other countries, exports are growing, tourists are returning and more people are arriving to live and work in New Zealand long term than leaving, helping ease worker shortages and rebuild the economy.

“We have taken a balanced approach that has ensured the economy is in the best possible shape as we steer a pathway through a period a high inflation followed by projections of a shallow recession. Our economic plan is working,” Grant Robertson said.

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