Home and food costs rise, but annual inflation stays at 7.2%

Wed, Jan 25

The latest figures from Stats NZ reveal the annual inflation rate has remained relatively steady over much of 2022, with a 7.2% annual increase in the September 2022 quarter and a 7.3% increase in the June 2022 quarter.

The big driver of the most inflation rate was rising costs associated with housing and household utilities, due to rising construction prices and rentals housing.

Stats NZ said the prices for building a new house increased 14% in the 12 months to December 2022 – rental housing prices also increased 4.4%.

Grocery prices – up 10.2% over the year - also continued to cut into household budgets.

“Higher prices for ready-to-eat food, vegetables, and meat and poultry drove the overall increase in food prices,” Stats NZ consumer prices senior manager Nicola Growden said.

The cost of flying also jumped for both international and domestic flights.

NZ’s annual inflation rate remained comparable to other countries, with Australia most recently recording 7.3%, the United Kingdom 10.5%, Canada 6.3%, the United States 6.5%.

Food banks “feeling the pressure”, 100% increase in demand

Food banks are getting so busy due to the cost of living crisis they are sometimes having to shut their doors due to running out of food.

"We start dispatching food parcels between 9.30am and 10am but on some mornings we’ve had people lining up at 8am,” said Kerrie Palma, centre manager at Salvation Army Manukau.

“We’ve been so busy; we’ve actually reached capacity and haven’t been able to do food parcels and we’ve had to turn people away.”

This January was 100% busier than last January, and Palma said they were “feeling the pressure”.

“We are finding it really challenging, we’ve had to max out our staff, I’m a centre manager usually around the back but I’m now often in the food bank.”

She said the intensity of the cost of living was biting hard, especially for those who are on the benefit.

“When they hit a bump the only discretionary income is what they might have spent on food and there is just nothing left... benefits are not high enough to cover basic cost of living increases,” she said.

"The other trend we have noticed is more working people through the doors, and people who have assets like a home and starting to struggle and need assistance.”

Cost of housing was also a common issue for their customers.

She is calling for more government support, saying it was using foodbanks as a way of avoiding increasing benefits.

“It’s not fair”

Some companies were trying innovative ways to offer cheaper food products to Kiwis who are finding it harder to pay for groceries.

New start-up Teddy today said it was selling 1 litre Meadow Fresh milk for $1 and Nature’s Fresh bread for $2.

“Food prices have gone up over 10% in the last year, but our incomes haven’t,” said founder Chaz Savage.

“It’s not fair.”

The company launched in Auckland and Queenstown and opened a Christchurch hub ahead of schedule.

Savage said that while the company would not necessarily make money from those deals, it was important to offer them to Kiwis.

“Inflation sucks and everyone is feeling the pinch,” he said.

We wanted to set this up to see if we can put a bit of pressure on the incumbents.