According to ASB senior economist Mark Smith, inflation will peak at close to 6.3% in early 2022. That’s a level that will be felt by every household on the North Shore. And remember, that increasing cost of living is building on top of the price rises consumers had to endure throughout last year – petrol prices went up 10% in just the last quarter of 2021.
These will be worrying times for families facing the uncertainty of Omicron. Especially as the inevitable impact the virus will have on businesses is going to weigh heavily on employers and their capacity to retain staff through yet another downturn.
It’s a tragic combination of events for ordinary New Zealanders and yet Grant Robertson’s response at a time when families and businesses are having to tighten their belts is to massively increase spending by 68%! Over $6 billion is going into new spending. This is despite most of the country’s economists warning of the significance of home-grown factors in our inflation. These economists are also saying that high inflation is likely to be longer lasting than originally thought.
Despite these warning signs there’s little evidence the government is taking note and adjusting its strategies.
Grant Robertson’s plans for the 2022 budget include: "significant investments in establishing the new entities that will replace District Health Boards". Unbelievable. Our health system is under immense pressure and Labour’s response is more bureaucratic tinkering with systems instead of providing desperately needed services.
Robertson is also promising "billions of dollars over the next four years to help meet our Government’s climate goals". Climate Change Minister, James Shaw, is going to get a $4.5 billion windfall from the Emissions Trading Scheme to splash out on his favourite projects.
Where is all this money coming from? Robertson is helpful there too: "our largest polluters are finally paying a proper price for their climate pollution". Doesn’t he realise that these are businesses that have struggled through two years of a pandemic, that they are trying to hold onto employees, and that the last thing they need is an extra tax burden?
It's time to get real, Robertson, and stop behaving like nothing has changed. The hopes and plans of lots of Kiwis have been derailed by the pandemic, we have all had to make adjustments and it’s time the government did the same. Blindly pursuing ideology at a time when the country needs astute financial management will condemn us all to needless hardship during this year and into the future.