Continued support for working people is needed in the wake of the latest financial data, says New Zealand Council of Trade Unions.
Today, the Official Cash Rate was increased to 2.5%, the highest rate since 2016. Food prices rose 6.6%, and overall rent prices increased by 4%.
NZCTU Economist Craig Renney said that those with already tight budgets will feel the greatest squeeze.
“Wages are continuing to grow at rates well below these price increases and so will place further pressure on low- and middle-income households.
“The increase in the Official Cash Rate will translate into higher repayment costs for those with debt.
“The OCR, food and rent are unavoidable costs for most New Zealanders and will result in reduced spending elsewhere.
“This data also demonstrates that the worst thing a government could do would be to follow the National Party’s advice and provide an unfunded tax cut for the highest income earners – those earning more than $180,000,” said Renney.
“A tax cut for the top 3% of earners would likely fuel higher inflation, fail to help those who need it the most, and would come from cuts to public services.
“Price pressures will mean greater demands on essential public services such as state housing and health.
“Sustained investment in these services will be critical to managing the impacts of currently higher prices. It also means that the Minimum Wage will need to increase so that low-income workers don’t fall further behind,” said Renney.