Thursday, May 04, 2017



Inflation and poverty

The CPI is out today, and it shows that the poor are getting poorer:

A recent jump in the cost of living hit the lowest paid Kiwis much harder than the big spenders, new figures show.

In the first three months of the year, inflation for all households jumped one per cent, bringing annual inflation to 2.2 per cent, the highest since 2011.

On Thursday Statistics New Zealand released the household living-costs price indexes, giving a breakdown of how price increases hit different groups.

The figures showed that the rise hit the lowest earners the hardest. Beneficiaries saw their overall costs rise by 1.4 per cent, almost three times the increase faced by the 20 per cent of households with the highest spending.


This is a long-term trend. Since National took office, inflation for poor households has been nearly twice that of rich households. Meanwhile, benefits are indexed to the CPI, but since that's lower than the actual inflation rate for people at that income, beneficiaries are legally forced to fall further and further behind.

That's unfair, and its easily fixed. Graeme Edgeler has drafted a bill to fix it, and the sooner an MP takes it and it is drawn from the ballot and passed, the better.