Beneficiaries hit hardest by rising rents
25 July 2019: We updated the graph “Proportion of household spending on rent, September 2017 quarter". The proportions in the graph were incorrect. We also changed the words “almost 30 percent” to “about 30 percent” in the third paragraph to reflect the corrected data. The corrections do not materially change the story. We regret the error and apologise for any inconvenience caused.
Beneficiaries faced the highest inflation in the June 2018 quarter (up 0.5 percent), Stats NZ said today.
In contrast, Māori had the lowest (up 0.2 percent), followed by superannuitants (up 0.3 percent).
Price rises for rent (up 0.7 percent), petrol (up 3.2 percent), and electricity (up 1.7 percent) were the main contributors to inflation for beneficiaries in the latest quarter.
“With rent making up about 30 percent of household expenditure for beneficiaries, rent increases this quarter affected this group more than any other household group,” consumer prices manager Geraldine Duoba said.
Lower prices for subscriber TV, second-hand cars, and audio-visual equipment were the main contributors in lowering inflation for Māori in the June 2018 quarter.
“Price falls for subscriber TV helped keep inflation low for all households. However, it was the superannuitants and lowest-spending households that received the greatest benefit,” Ms Duoba said.
Many superannuitant households are also low-spending households, which explains why both were strongly affected by the fall in subscriber TV prices.
Vegetable prices help lower annual inflation for all household groups
In the past 12 months, all households have had some relief from the high vegetable prices in 2017.
“Vegetables had large price increases in 2017 because New Zealand growers lost crops due to poor weather,” Ms Duoba said.
“With better weather conditions in the year to June 2018, prices have dropped to be more in line with what we expect for this time of year.”
Moderate spending households had the largest annual increase in inflation (up 2.2 percent). Inflation for this group was driven by higher prices for petrol (up 10 percent), mortgage interest payments (up 8.1 percent), and cigarettes and tobacco (up 11 percent).
The highest-spending households faced a 1.8 percent increase in the year ended June 2018. This was driven by price increases for mortgage interest payments, petrol, and accommodation services. The lowest-spending households had a similar level of inflation (1.9 percent), driven by increased prices for rent, petrol, and dwelling insurance.
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