The Nats are trying to take credit for the fact that annual inflation in the year to September was the lowest since 2004. What exactly did they do? Dig into the numbers and the cause of the lower inflation is a weak global economy, not National. Already, inflation is climbing, 1.1% this quarter, and will break 5% next year thanks to the GST hike.
The most significant upward contributions came from higher prices for cigarettes and tobacco (up 14.5 percent), petrol (up 5.8 percent), milk, cheese, and eggs (up 10.1 percent), and electricity (up 3.7 percent).
The most significant downward contribution came from lower prices for audio-visual equipment (down 24.6 percent) and meat and poultry (down 3.5 percent).
Did National do anything to make audio-visual equipment, meat, or poultry cheaper? Nope.
And, no, National hasn’t kept down increases in government charges:
For the year to the September 2010 quarter, the non-tradable component increased 2.5 percent. The most significant upward contribution came from cigarettes and tobacco.
The tradable component increased 0.3 percent for the year to the September 2010 quarter. The most significant upward contributions came from petrol and from milk, cheese, and eggs.
Can anyone point to the policies that this government has undertaken that have affected inflation? No, of course not because they don’t exist. What really happened is that prices in the trade-exposed portion of the economy didn’t climb due to the weak international economy. Nothing to do with National at all. But then what do you expect from a do nothing government other than for it to take credit for something it didn’t do?
It is as stupid to credit National with low inflation caused by a lacklustre global economy as it is to blame Labour for the last oil spike, which pushed inflation to 5% in 2008.
And anyway, the last quarter’s inflation was actually high at 1.1%. The prime reasons for the increase? “The most significant upward contributions came from higher prices for vegetables (up 19.7 percent), local authority rates and payments (up 4.4 percent), other private transport services (up 8.4 percent), electricity (up 2.8 percent), and milk, cheese, and eggs (up 5.2 percent)”
One thing National has done is increase GST, and as a result inflation will surpass 5% in the next year. I wonder if they’ll be leaping to take credit for that.