Stats NZ reveals that the latest Consumer Price Index (CPI) showed a 1.8% increase in prices over the March quarter, taking the annual inflation rate to a 30-year high of 6.9%. This has been attributed to the global economic challenges that New Zealand is hardly immune with significant increases in food and fuel prices hitting all nations. Inflation is at a 40-year-high of 8.5% in the United States and a 30-year high of 7% in the United Kingdom. Additionally, Chinese ports have been shut for long periods, adding to supply chain disruptions
Against this backdrop, Michael Barnett, Chief Executive of the Auckland Business Chamber, said, ‘Government needs to move on the stifling immigration settings so employers can bring in the skills to meet demand and build productivity and competitiveness.’
‘Individual businesses can help themselves, reassess their cost settings to bridge the flow on pressures from hikes in minimum wages to inputs from transport to fertilizers to keep their offerings affordable and sustainable,’ he added.
Along with a proposed revamp of immigration policies to bring in highly skilled workers, a careful and balanced approach to future spending is what New Zealand Finance Minister Grant Robertson proposed. The focus will be on meeting the core needs in health, education, housing, and investing in the skills, infrastructure, and industries the region needs to grow higher-paying jobs.
He also said, ‘There are no silver bullets for dealing with a situation like this. The Reserve Bank has the job of managing inflation in our system, and they are using their tools to try to bring it back into the target range of one to three per cent over the medium term. Most economists are now forecasting for inflation to peak in the second quarter of the year and then start coming back down.’