21 Apr 2022

High cost of living confirmed by record consumer price index rise

From Checkpoint, 5:07 pm on 21 April 2022

Social service providers are concerned about the impact of the country's largest inflation rise in more than 30 years, saying many people are struggling with rising costs.

The consumer price index increased 6.9 percent in the year ending March, scraping in just below expectations but still the largest annual rise since the year to June 1990.

The main driver was rising prices for construction and housing rentals, fed by supply chain issues and demand, with transport costs following behind. 

This was no surprise to people on the streets of Wellington on today.  

Johnny said the rent on his property had just gone up about $40 per week, "which is pretty heavy increase if you're, sort of already scraping to get all your food and get everything going really [sic]".

Rebecca said it was "insane" when she recently filled up her vehicle from near-empty and it cost more than $150. 

"It was the largest amount of money I'd ever put in."

The grocery bill was also on people's minds, most mentioning they were having to make more conscious decisions at the supermarket.

Samantha said she would make an effort to travel to shops were she knew produce was often cheaper, such as local fruit and vegetable stores or weekend markets. 

She would even make choices around what supermarket she went to "just to save a few dollars" so she did not have a big bill just for basics.

"And obviously it's quite hard to kind of eat healthy if prices of healthy food go up."

Diane said her and her husband had mainly stopped consuming as much meat as usual but weren't too worried overall because they were retired.

"Those with children I feel really sorry for," she said.

Social services are seeing a new group of people head through their doors as a result of the rising cost of living, most notably a number of low and middle income earners looking for help.  

Newtown Budgeting and Advocacy Services manager Gary Sutton said people were paying so much to keep a roof over their heads, they were left with limited funds for other bills.

"Most of them are struggling with just getting food on the table - particularly families.

"We're getting an increasing number of families coming and telling us that they were able to make it before, but recently they can't and they need help with their budgeting with loan repayments and things like this," he said. 

Sutton had a message for anyone finding it tough: "These things can be managed in a way that you can make it and take care of your family, take care of your mortgage, and all these different things; please access the service that can help you". 

Wellington City Missioner Murray Edridge said for those facing the worst of it, life was becoming "almost impossible".

"Most of us moan about the prices, most of us don't like the price of petrol or are concerned about the grocery shop. For people who are doing life hard, this is not just an inconvenience or a frustration - this is catastrophic."

Edridge said there were cumulative factors that have gone unchanged for years, like increasing rentals costs in substandard housing, which can impact someone's health and add to already expensive costs.

He worried there was an "invisible" group of people in communities needing help. 

Dunedin Budget Advisory Service executive officer Andrew Henderson told Checkpoint it was a "horrible situation" for many people. 

His service was seeing an increase in middle-income earners who may have over-leveraged in the past and were now struggling with debt, but it was low-income families who were really struggling. 

When asked what a reasonable weekly budget for food is, Henderson said it used to be $65 but is now $75-$80. 

"But if you think about it, it's not a lot of money to go towards food for someone for a week." 

It was meant to cover costs for a balanced diet - meat, fresh fruit and vegetables.

"Vut honestly, that is just not enough, so we are seeing more and more people having to live on unhealthy options like white bread, pies, noodles, $5 pizzas, fish and chips - those sorts of things.

"It's not good for people and it's definitely not good for children."

In Parliament, opposition parties are calling for the government to take some responsibility, and come up with a plan.

Finance Minister Grant Robertson said the government had taken steps to ease the pressure on peoples' pockets.

"So there are short-term and long-term things we can do to help New Zealanders through this, but fundamentally this remains an inflation situation that's driven by global factors."

The Reserve Bank is trying to control inflation through higher interest rates.