Finance Minister Bill English. Photo / Mark Mitchell
We asked Finance Minister Bill English what he is doing to help people who are struggling with the rising cost of living. Here's his response:
We recognise that higher prices put an extra financial burden on households. That's why we are focused on lifting after-tax wages and limiting price increases - the two factors that contribute the most to improving the cost of living.
Many price rises are being driven from overseas, such as rising
world demand for food or political unrest in the Middle East. I have little influence on those things. Where the Government does have some influence, we are working hard to keep prices low. The best overall measure of price movements is the Consumer Price Index, which increased 4 per cent in 2010. About 2.2 per cent was the increase in GST, which every household was compensated for.
Ultimately, the true test for the cost of living is how wages, benefits and NZ Super rise compared with prices. Everyone's circumstances are different, but we know that:
* Benefits are lifted each year to match inflation, while tax cuts and annual adjustments have boosted the fortnightly married rate of NZ Super by $142.52 in just two years.
* The after-tax average wage increased from $39,518 to $42,214 last year.
* For many households their single biggest expense is their mortgage. Floating mortgage rates - at 5.7 per cent - are about half what they were in 2008.
This represents a saving of about $860 a month for a household with a $200,000 mortgage.
I can assure you, we are focused on increasing wages, limiting price rises and supporting jobs.
