21 Apr 2021

Data points to unequal recovery and entrenchment of poverty - Unions

5:11 pm on 21 April 2021

Recent inflation affected poor people more than the rich, with rises in everyday goods and falls in big ticket items, the Council of Trade Unions says.

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Fruit and vegetables prices are up 3.9 percent. Photo: RNZ / Richard Tindiller

The consumer price index (CPI) is at 1.5 percent for the year.

This means a basket of certain goods rose in price that much in the last 12 months.

The CTU says for the poor, high annual increase in rents (up 2.7 percent), fruit and vegetables (up 3.9 percent) and childcare (up 2.5 percent) outweighed the falling price of audio-visual (down 4.7 percent) and electrical appliances (down 11.6 percent).

"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," CTU Economist Craig Renney said.

"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.

"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," Renney said.

The consumers price index for the three months ended March rose 0.8 percent and the annual inflation rate ticked up slightly to 1.5 percent.

Leading the increase, Stats NZ said, petrol prices rose more than 7 percent in the three months - the most in more than five years.

The costs of building a new house, rents, and vehicles also rose, while electronics, furnishings and some food items were cheaper.

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