“After nearly six years as Minister of Finance, Grant Robertson must take responsibility for above target inflation rolling into its 10th quarter at six per cent, twice the maximum allowable rate. He can’t blame COVID, Putin, the last Government, or the tooth fairy. He’s been Minister of Finance for six years and the chasm between tradable (5.2) and non-tradeable (6.6) inflation is catching him out,” says ACT Leader David Seymour.
“Labour is responsible for fiscal policy, monetary policy, and the regulatory environment Kiwis face. In all three areas, they have failed badly and fed inflation. Labour has failed; the solution is an ACT Government to cut waste and deliver efficient, effective spending on essential services.
“Grant Robertson needs to listen to Chris Hipkins who said in April "It's not right for households to be tightening their belts if the Government isn't also being seen to be doing the same." Well, Kiwis are certainly tightening their belts but not this Government.
“New Zealand’s inflation rate is becoming a global outlier. As inflation plummets in other countries, now back down to three per cent in the United States, New Zealanders are facing ongoing cost increases. The 12.5 per cent increase in the cost of food in the year to June hurts kiwi families.
“The greatest relief for kiwi families is the price of petrol being down, but that’s no thanks to Grant Robertson or Labour. The simple fact is that petrol is refined from oil, and the price of that is down. By over a third since it peaked mid last year.
“Labour inherited an economy where the Government spent $27 out of every $100, or 27 per cent of GDP. This year it is forecast to spend $33 out of every $100, or 33 per cent of GDP. The Government takes up a bigger share of the economy, but produces less.
“The Government now spends 25 per cent more per person than it did five years ago, even after adjusting for inflation. The simple question is ‘what have taxpayers got for the extra money?’ When I’ve asked Chris Hipkins and Grant Robertson, their go to answer is free school lunches, but Treasury says they failed to improve attendance or learning.
“The truth is that the Government is spending more for the same or worse results, and that is inflationary. They have failed on fiscal policy and their waste is pushing up inflation and interest rates.
“Labour also fail on monetary policy. Labour gave the Reserve Bank a dual mandate, focusing on employment as well as inflation. ACT said at the time nobody can reach two goals with one tool, being the interest rate.
“Inflation is now out of control. Labour has failed on monetary policy, with the Reserve Bank and the Governor it appointed to follow its policies having pumped New Zealand full of cash now hitting the brakes hard and painfully to fix their own mistakes. Labour must take responsibility for the state of monetary policy in New Zealand.
“Costs also rise when people spend more time in compliance activity and less time in productive activity. The current Government has put layer after layer of red tape on business. Labour locked the country down for two years, borrowing and printing to make up for it, the economy is still recovering from their heavy handed and often hapless COVID response. The half billion dollars of surplus RATs being stored at a cost of $100,000 per day is just the latest example of that.
“Even beyond COVID, the orange cone pandemic puts real costs onto everything Kiwis do. To take one organization, Auckland Council is now spending $145 million per year on temporary traffic management. The CCCFA regulations paralysed lending for the best part of a year. Early Childhood Education centres report that they need to comply with 303 regulations before they open.
“Kiwi families are hurting under an inflation marathon and Grant Robertson needs to stop blaming others and own it. A better option is ACT, to cut wasteful spending, get the Reserve Bank back on target, and cut red tape so life is affordable again.”