Figures out today show wages continue to rise faster than the cost of living, Acting Finance Minister David Clark says.
Statistics NZ said today that Consumers Price Index (CPI) inflation was just 0.1% over the final three months of 2018 as food and petrol prices fell, and remained at 1.9% annually in the year to December – in line with the Reserve Bank’s target.
“The inflation figures out today are further evidence of New Zealand’s solid underlying economic fundamentals. We are now seeing income growth higher than increases in the cost of living,” David Clark said.
“Data from Statistics NZ shows household incomes up 5% annually, and the latest Quarterly Employment Survey also shows growth in individuals’ average hourly earnings of around 3% from the year before.
“The Coalition Government’s plan includes a number of key economic policies focussed on lifting the incomes of New Zealanders to help them face the cost of living.
“The Families Package will deliver an average $75 a week to 384,000 low and middle income families when fully rolled out, the minimum wage is rising by $1.20 an hour to $17.70 on 1 April 2019, and new policies like the R&D tax incentive, the Green Investment Fund and the Provincial Growth Fund are designed to encourage businesses to invest to improve productivity.
“We are also focussing on boosting the skill levels of all New Zealanders through policies like Fees-free, Mana-in-Mahi/Strength in Work and Micro-credentials, which again will lead to higher wages.
“The latest CPI data also shows annual rent rises in Auckland were the lowest in four years. This follows Auckland’s largest real estate agent, Barfoot and Thompson, saying rent increases trended down through 2018, and that December figures showed “the lowest rate of change yet”. It also fits with nationwide median rent data for December showing the annual increase was lower in December compared to November, with the median rent flat across the final three months of 2018.
“The low quarterly inflation number came as food and petrol prices fell during the December quarter. Statistics NZ said petrol prices fell 0.6% in the December quarter, despite the regular annual fuel tax increase on 30 September. By the last week of December, petrol prices were 8.3% below the average over the quarter.
“This is further evidence that the main drivers of New Zealand petrol prices are external factors like the international oil price and the exchange rate, in contrast to the Opposition’s constant negative scaremongering,” David Clark said.