Cost of living increases: Who is being hit hardest now?
Beneficiaries and people on NZ Super are experiencing faster increases in the cost of living, while the biggest spenders are getting some relief, new data shows.
Stats NZ has released data for the September quarter, which shows the average New Zealand household experienced a cost-of-living increase of 2.4 percent over the previous 12 months.
That is less than the 3 percent rate of inflation, because it includes a 15.4 percent drop in mortgage interest payments.
Mortgage interest payments were the main contributor to highest-spending households recording the lowest annual inflation, Stats NZ said.
Their annual inflation rate was 0.8 percent, compared with 3.9 percent for superannuitants, who are less likely to be paying mortgage interest. Beneficiaries had costs increasing 3.4 percent and the lowest-spending households had an increase in costs of 4 percent.
Rents increased 2.6 percent over the year to September. Rent makes up 29.5 percent of beneficiary household expenditure. This compares with 13.1 percent for the average household, and 5.1 percent for highest-spending households.
Council of Trade Unions policy director Craig Renney, a former adviser to then-Finance Minister Grant Robertson, said it had historically been the case that people on the lowest incomes had the highest rates of cost-of-living increases.
That had changed after Covid when home loan rates increased sharply but now the situation had reversed. He said it was likely that the impact would continue to be felt in this way.
Council of Trade Unions (NZCTU) policy director and economist Craig Renney.Craig Renney. Photo: Stuff / ROBERT KITCHIN
"Much of the challenges are in administered costs, rates, electricity, going to see the GP, which are rising faster than general inflation."
But Satish Ranchhod, a senior economist at Westpac, said it was important to note that some of the lower-income people who were experiencing higher rates of inflation would be young people in the earlier stages of their careers, who had not yet reached a point where they could buy a house.
"It's misleading to say they're getting hit, they're just at a different place in the lifecycle."
But he said times were still tough for many households, including many lower-income earners.
He said people who had mortgages had experienced large increases in recent years and a much bigger squeeze on their incomes.
The relief they were experiencing was likely to continue as the impact of falling interest rates filtered through to more people, he said.
Other significant increases were an 11.3 percent increase in electricity on average and an 8.8 percent increase in rates.
How are cost increases felt?
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Inflation experienced in the 12 months to the September 2025 quarter:
all households 2.4 percent
beneficiaries 3.4 percent
Māori 2.4 percent
superannuitants 3.9 percent
highest-expenditure household group 0.8 percent
lowest-expenditure household group 4 percent.
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Even Australians get it - so why not Kiwis???
“Ten years ago, if a heatwave as intense as last week’s record-breaker had hit the east coast, Australia’s power supply may well have buckled. But this time, the system largely operated as we needed, despite some outages.
On Australia’s main grid last quarter, renewables and energy storage contributed more than 50% of supplied electricity for the first time, while wholesale power prices were more than 40% lower than a year earlier.
[…] shifting demand from gas and coal for power and petrol for cars is likely to deliver significantly lower energy bills for households.
Last quarter, wind generation was up almost 30%, grid solar 15% and grid-scale batteries almost tripled their output. Gas generation fell 27% to its lowest level for a quarter century, while coal fell 4.6% to its lowest quarterly level ever.
Gas has long been the most expensive way to produce power. Gas peaking plants tend to fire up only when supply struggles to meet demand and power prices soar. Less demand for gas has flowed through to lower wholesale prices.”
Full article: www.theguardian.com...
If even Australians see the benefit of solar - then why is NZ actively boycotting solar uptake? The increased line rental for electricity was done to make solar less competitive and prevent cost per kWh to rise even more than it did - and electricity costs are expected to rise even more. Especially as National favours gas - which is the most expensive form of generating electricity. Which in turn will accelerate Climate Change, as if New Zealand didn’t have enough problems with droughts, floods, slips, etc. already.
Time to Tickle Your Thinker 🧠
If a zookeeper had 100 pairs of animals in her zoo, and two pairs of babies are born for each one of the original animals, then (sadly) 23 animals don’t survive, how many animals do you have left in total?
Do you think you know the answer? Simply 'Like' this post and we'll post the answer in the comments below at 2pm on the day!
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Poll: As a customer, what do you think about automation?
The Press investigates the growing reliance on your unpaid labour.
Automation (or the “unpaid shift”) is often described as efficient ... but it tends to benefit employers more than consumers.
We want to know: What do you think about automation?
Are you for, or against?
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9.5% For. Self-service is less frustrating and convenient.
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43.3% I want to be able to choose.
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47.2% Against. I want to deal with people.
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