Back in October last year the Nats, in a sea of bad news on the economy, latched on to the low inflation rate as something that they could claim “credit” for:
Govt claims credit for six-year inflation low
The Government is claiming credit for low price rises, saying people have more money in their pockets on the back on low inflation and increasing wages.
Data from Statistics New Zealand (SNZ) released today showed the annual inflation rate is the lowest it has been since March 2004 – at 1.5 per cent.
Low inflation? We were in the depths of a recession, no one was spending. Increasing wages? Just a statistical trick, when lots of low waged lose their jobs the “average” (mean) wage goes up. The excellent Kieth Ng at Public Address tore the Nats a new one over both of these ridiculous claims.
Still and all, the Nats did try to claim credit for low inflation, so I have no doubt that they will be just as quick to step up and accept the blame for increasing inflation now. In fact, inflation is projected to hit its highest point in 20 years:
Economists forecast inflation rise to 5.5pc
Soaring fuel prices and the lingering impact of the GST hike are likely to send inflation to the highest level in more than two decades this year, hitting households hard.
Rises in the cost of food and school and university fees have also been identified as contributing to pushing up the cost of living and inflation rates.
This morning, Statistics New Zealand will publish the consumer price index for the first three months of the year, which is expected to show that prices rose on average 4.6 per cent in the year to March 30.
The movement in prices was having a substantial impact on consumers, with rises “heavily weighted towards the goods and services that we can’t really avoid” such as fuel and food, said Steven Toplis, head of research at Bank of New Zealand. …
Economists expect annual inflation to rise as high as 5.5 per cent in the year to June 30, the highest since 1990, a year after the Reserve Bank of New Zealand made controlling inflation the main focus when deciding the official cash rate.
So when can we expect a press release from the Nats accepting blame for the high inflation rate? Don’t hold your breath. But here’s what Key did have to say:
Prime Minister John Key said oil prices internationally were concerning but beyond the control of the Government. “That is putting pressure on inflation and of course that feeds through to every product we buy,” he told TVNZ’s Breakfast this morning. He said the Government’s tax package had helped as would reduction in government spending.
Ummm – no John. Your tax package didn’t help at all. The increase in GST is responsible for about half of the current inflation rate. That’s about the stupidest thing you could have said really. And as to the price of oil — what is your government’s plan to cope with that situation? Building more highways isn’t going to help. The cost of oil is going to keep going up and up. So what is your plan?