Will Budget 2022 tackle cost of living? Political pundits weigh in

Source: 1News

Labour needs to act quickly to curb inflation and the cost of living crisis if it wants to remain in power, according to one political analyst.

Matthew Hooton and Shane Te Pou.

Shane Te Pou believes there are mechanisms within the Government’s upcoming Budget, the largest spending allowance in New Zealand’s history, to help Kiwis currently doing it the hardest.

That includes, according to Te Pou, the Family Start programme and tax credits.

However, he admits that “it’s a hard road”, describing inflation as like “being served a beetroot sandwich in the afternoon".

“It permeates through everything,” Te Pou told Breakfast.

Fellow political pundit, Matthew Hooton says the Government appears “spooked” following its poor showing in recent polls and disagrees that Budget 2022 will do anything significant to provide relief for people feeling the pinch from rising household costs.

He says the Budget is “demand driven”, meaning the Government has very little say in where the money actually goes, and that the Government bears the brunt of the blame for letting inflation soar in New Zealand in the first place.

Read more: Consumer NZ launches petition to combat high grocery prices

“I think people realise now it was a mistake to ask the Central Bank to do anything other than control inflation and we’re seeing the consequences,” says Hooton.

However, he appreciates the dilemma that spending is inflationary by nature and therefore, any money doled out to try and provide relief for Kiwis will add “another cent or two on your broccoli”.

Te Pou believes inflation is mainly caused by offshore issues and that the Government is being blamed for something it can’t control.

He says providing more assistance to middle-income families will help but Hooton believes this will just make the problem worse.

Te Pou says the challenge for Labour is to make it clear how their policies are different to National, calling on the Opposition to be “more exact” about its policies.

Hooton believes this will be hard to do when the country’s two main political parties are in essentially the same thing, with only ACT and the Green Party providing points of difference.

He has described Greens co-leader, James Shaw’s, climate change plan as “historic”, while ACT is “pushing the boundaries of what we can talk about, which is useful”.

“At least these people are talking policy this week,” says Hooton.