“Over the last year, households with lowest incomes were hit hardest by price increases,” says CTU Economist Bill Rosenberg, commenting on the Household Living-costs Price Indexes released this morning by Statistics New Zealand.
“Looking at the whole year, rising housing costs have meant that lower income households, beneficiaries and superannuitants have seen greater rises in costs.”
“While high income households have seen higher increases in the last three to six months those increases have been driven by luxury items such as package holidays, international travel and new cars.”
“This information adds to the picture of a Government which isn’t dealing effectively with rising costs of rent, housing construction and the cost of existing houses, and with the imbalance in our economy”, Rosenberg says.
Different types of household experience different increases in the cost of living because they buy goods and services in different proportions. For example housing costs are a larger proportion than average of costs facing low to middle income households, whereas items like new cars and international travel are a larger proportion than average of the costs to high income households.