Robertson: Inflation has not peaked yet

Grant Robertson Photo: RNZ / Angus Dreaver.

UPDATE: Finance Minister Grant Robertson expects the official inflation figure to rise when it is released later this week.

The Reserve Bank earlier this month stepped up the battle against inflation with an increase of half of a percentage point in the Official Cash Rate (OCR) to 1.5 per cent, with a warning that further rises are coming.

Food prices were 7.6 per cent higher in March than the year before - the biggest annual increase in more than a decade.

With the inflation figure for the first quarter due to be announced on Thursday, Robertson is unwilling to speculate on what the figure might be but says inflation has not peaked yet.

Robertson told Morning Report all commentators are predicting an increase in the inflation figure this quarter, and potentially the second quarter as well.

"I expect that it will be rising as it is right around the world.

"The amount that it rises by is obviously what everyone is debating."

He says the cut in the fuel excise duty and road user charges may keep inflation in check but it's a global phenomenon driven by supply chain constraints, the impacts of Covid-19 and the war in Ukraine.

In the US and UK the inflation rate has now topped eight per cent.

He agrees some households are facing a crisis with the rise in prices for food and petrol.

A substantial package from the government that took effect on April 1 to help low and middle income households, plus the cut in the fuel excise duty, was relieving some of the pressure, he says.

The package provided significant increases for those on Income Support and people receiving the Family Tax credit, with the fuel initiative adding some more relief.

Winter energy payments begin on May 1 for those on the lowest incomes plus superannuitants, he said.

He rules out removing GST from some food items.

"I acknowledge this is a challenging time for many people but it's hard to come through a 100-year economic shock caused by Covid without some impacts."

Robertson says Prime Minister Jacinda Ardern's first overseas trip in two years is very significant.

Singapore and Japan are New Zealand's fourth and fifth biggest trading partners, so the trip is a chance to talk trade and tourism with the prime minister accompanied by representatives of the dairy, energy, food and technology sectors.

"It's a great opportunity to get out there and sell New Zealand."

In Japan there is a chance to explore opportunities around renewable energy, building on cooperation between companies in the two countries on hydrogen.

"We think there's a real opportunity for us to partner with a very large market there on how those technologies develop."

It's the beginning of several trips that Ardern and Ministers will make as the country reconnects with the world.

He disputes Export New Zealand's view that the country has become a hermit kingdom, and says the export sector has played its part with some support from the government in helping New Zealand to prosper through the pandemic.

EARLIER:

Mortgage interest rates have hit 6 percent for four-year fixed terms.

Finance Minister Grant Robertson speaks to Morning Report about rising rates and inflation.

The Reserve Bank of New Zealand (RBNZ) earlier this month stepped up the battle against inflation with an increase of half of a percentage point in the Official Cash Rate (OCR) to 1.5 percent, with a warning that further rises are coming.

Food prices were 7.6 percent higher in March than the year before - the biggest annual increase in more than a decade.

More to come...

-RNZ.




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8 Comments

6.9%!!!

Posted on 22-04-2022 12:51 | By morepork

Those are figures for today, the 22nd, April. ANY government should be hanging their heads in shame and shuffling their feet uncomfortably... But the sound of the presses printing more money is drowning any sobbing out...

The silent thief.

Posted on 20-04-2022 13:33 | By morepork

That robs all of us. Inflation. Your savings are diminished, prices for imported goods rise, and nobody wins. The worst part is that we have no control over it. There is nothing that YOU can do to lower the inflation rate. You have to trust the Government... Did you do that? Will you do that again at the next general election? Think on it.

To long shutdown

Posted on 19-04-2022 14:25 | By Kancho

It’s the economy stupid. Our hermit country shut down so much of the economy it is still trying to recover, some of it won’t. We took many needless months to get sufficient supplies for nurses safety equipment, ventilators , vaccines etc and still not ready. So we bought time with total shutdowns but squandered and be time. For heaven’s sake only one vaccine, no antigen testing for over a year even stealing the antigen tests kits ordered for businesses . Meantime they increased businesses costs in many ways, all inflationary as costs are passed on . So yep Australia had covid longer but got through, did much better with the economy and also inflation . Policies have caused a lot of lost productivity and jobs. We have not done any better but it cost more . People still refuse vaccine so move on.

Tom Ranger

Posted on 19-04-2022 14:23 | By Tom Ranger

Orr has just reminded Grant that govt need to change what they are doing to give RBNZ a chance to meet inflationary targets. Stop printing. Stop unnecessary spending. Stop increasing taxes.

Yeah right

Posted on 19-04-2022 11:09 | By Potofstu

According to Grant Robertson this government has nothing to do with the inflation hike.roll on the next election

The usual

Posted on 19-04-2022 09:49 | By Kancho

Yet many economists say inflation is both international and locally generated by government spending. Australia has half our inflation rate and we are still as Jaccinda likes to say " world leading " but we are one of the world leaders in inflation. He says it has not peaked yet and as interest rates rise and the temporary fuel tax reduction come to an end guess we will find out. As for the relief package touted I’m sure most will be saying it’s already gone on cost increases. Roll on election time.

Wow, who would have thought

Posted on 19-04-2022 08:59 | By an_alias

Your just amazing, possibly a genius Grant. Who would have thought spending $68B and getting nothing in return would be inflationary. Who would have guess that killing the oil industry without any alternative would cause inflation and massive importing.

Reckless

Posted on 19-04-2022 07:55 | By Slim Shady

This lot have borrowed and printed more than EVERY country in the OECD apart from the US. They try and kid you that it’s a global issue but the fact is that our inflation is double that of some countries who were less reckless. Same old Socialist plan - borrow and spend, give away some short term sugar hits, inflation kicks in and everyone is worse off than they were before. Now this bloke is trying to put the blame on the Reserve Bank, sayig it’s their job to control inflation. It’s like setting a house on fire and blaming the fire service for not putting it out.

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