Fact Checking Attorney General Parker
Newshub has reported how David Parker has slammed National Party Finance Spokesperson Nicola Willis for saying his government is responsible for a significant chunk of the high inflation rate in NZ.
Parker said, "What the Opposition is trying to do is say this inflation has been caused by the Government & that we can control it in that sense and we can't and it isn't ... It's oil prices, it's disrupted supply chains & this is a thing that is happening all around the world & the Opposition will say it's our fault - well it isn't". Willis said Australia is at 3.5 percent inflation, but Parker contradicted her, saying that the US & much of Europe also had high inflation.
There are so many things wrong with Parker's assertions it's hard to know where to start. First, the energy crisis in "much of Europe", as Parker put it, has little to do with oil prices, which he blames for a large chunk of their (and our) inflation. The energy shock in Europe has instead largely arisen due to its imports of Russian gas.
For example, Russian gas accounted for 65% of all Germany's gas imports in 2020. In NZ it accounted for .. ZERO. Gas supplied by Russia is used across a swathe of German industry, as well as by the public for heating. Gas analysts ran headlines last week saying "Natural Gas Prices in Europe hit the Equivalent of $600 per barrel of oil":
"The price of natural gas in Europe hit an all-time high on March 7, briefly touching €345 per megawatt-hour ... Late in the day, the price had settled back to about €190, still a record. Before the last 12 months when the European gas market was rocked first by a compounding series of market trends and mishaps, and now by Russia’s invasion of Ukraine the price had stayed roughly in the range of €15-25 per MWh for a decade".
Yes, gas prices are up around 10 times in Germany. So Parker should, to put it bluntly, stop comparing apples and oranges: the inflation shocks being experienced in different countries at present have a myriad of causes, many completely different from our own.
So why is Kiwi inflation high? Here's a (non-exhaustive list):
1. The RBNZ's $100 billion money printing program.
2. The government's gigantic budget deficits
3. Our supermarket duopoly whereby the chains have been passing costs straight onto consumers rather than undercutting each other
4. Rising costs on employers, caused by the likes of the minimum wage increase
5. Runway house prices and rental costs
6. Skill shortages due to NZ's border closures meaning immigration went to zero
7. High oil prices
8. Supply chain disruptions
To summarize, Attorney General Parker says the Kiwi government bears no responsibility for our inflation rate. Seems he's right with regard to reasons 7 and 8. Seems he's wrong with respect to reasons 1, 2, 3, 4, 5 and 6. Two out of eight ain't bad, I suppose.