The Council of Trade Unions is concerned that today’s consumer price index (CPI) data shows that for the poorest New Zealanders the cost of living continues to rise well ahead of the official headline increase rate of 1.5%.
CTU Economist Craig Renney says: “The data presented continues to show faster increases in the cost of essential items, like fresh produce, rent, and childcare.
“These hit the poorest hardest and demonstrate the need for faster than CPI adjustments to the Minimum Wage, and for higher wage increases for the lowest paid employees.”
The annual increase in costs for fruit and vegetables (+3.9%), rents (+2.7%), and Early Childcare Education (+2.5%) were offset by falls in audio-visual equipment (-4.7%), telecommunication equipment (-9.3%) and some electrical appliances (-11.6%).
“These cheaper items tend to be one-off or discretionary purchases, made more often by those with higher incomes. The cost of living for them is not rising at the same pace as those on more meagre budgets,” says Renney.
“Today’s data supports other recent economic data – be it on unemployment, wage growth, or housing – that shows we have an uneven recovery from the economic impact of covid-19.
“This ‘K-shaped recovery’, where those doing well enjoy economic growth whilst the poorest continue to suffer, cannot be allowed to take root in New Zealand. Ensuring that those on the lowest incomes do not fall further behind must be at the heart of building back better.”