‘Extraordinary’ living costs rise not going away soon - economist

Source: 1News

A top economist is urging the Government to help put more in the pockets of low income New Zealanders as the cost of living rises.

"We've already seen an extraordinary increase in food costs, in housing costs, in fuel costs and those are not going to go away anytime soon," Shamubeel Eaqub told Breakfast.

"I think food costs in particular and housing costs are going to create a lot more pressure for those people."

Aannual food prices have increased by the highest amount in over a decade, Stats NZ announced last month, with a 5.9 per cent increase from January 2021 to January 2022.

Eaqub says the Government should seriously consider measures in this year's Budget to help those on benefits and low incomes.

"What I really want to see is we can't ask for personal responsibility for poor and vulnerable New Zealanders to be able to absorb these costs," he said.

Read more: Vegetables could soon be 'priced off the table' - Horticulture NZ

"What we need to see is when the Government does the budget in May, that we need to have a serious conversation about lifting benefits, lifting incomes of low income households."

"We need to think very carefully about what are we doing with our housing policies because we've got a massive and growing wait list for emergency and social housing, the accommodation supplement is simply not enough for people to I guess live comfortably with the cost of housing where it is," he said.

Read more: Tax reform, productivity key to curbing cost of living - Luxon

Eaqub said that 10 years ago high living costs were mostly problematic in cities, "but now it's getting into the provinces of New Zealand where there are fewer job opportunities and incomes are much lower".

"It is feeling a lot tougher and we've seen with the fuel tax change this week that the Government can be very quick when it wants to be, but the crisis is actually wider and much broader.

"I don't want to see blanket things that affect everybody because the rich and well-off in New Zealand are fine," he explained.

"I think food costs in particular and housing cots are going to create a lot more pressure for those people."

On Monday the Government reduced fuel taxes and halved the cost of public transport for three months.

"We are in the midst of a global energy crisis. Last week prices for all three fuel types rose to the highest amount on record”.

“We are in a wicked, perfect storm and it is a storm that is impacting people’s lives,” Ardern said, as Russian’s invasion of Ukraine impacts global fuel prices.