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  • rmacculloch

Kiwis face the biggest drop in living standards since the 1970s (can the NZ Treasury plse confirm?)

The above headline is surely one to rattle our government, which is probably why it is desperately keen to keep it out of the mainstream media. But shouldn't the Finance Minister come clean and level with the Kiwi public about how we're presently experiencing one of the biggest ever drops in our standard of living?

Here's how the sums add up. Wages are growing at less than 4%, whereas inflation is on its way to hitting over 7% on the back of the recent hike in oil prices, implying real wages are on their way to fall by at least 3%. Property prices are not even part of our CPI and given they have risen over 30% the past couple of years, way higher than most other countries, the overall drop in our standard of living is far larger than 3%.

The BBC report below that, "Soaring energy prices [in the UK] could push inflation to a 40-year high of 8.7% in the final three months of 2022, the government forecaster said".

Meanwhile in NZ, our PM & Finance Minister are insisting they're not responsible for our high inflation and that, to the extent we are experiencing sharp price rises, it is entirely an "international" phenomena. I don't agree with them on that point, but let's take them at their word, which means that NZ can expect to see similar rates of inflation as the UK.

In Britain, the Office for Budget Responsibility reports that the country is on course to experience the biggest drop in living standards since records began. In the case of NZ, given we are still in the midst of a significant outbreak of the virus & still have widespread restrictions compared to Britain (where practically all of them have been dropped) it's reasonable to assume our economic rebound is going to be weaker that theirs.

So the mystery is: how come the Times of Britain and the BBC are featuring front page headlines like, "People Face Biggest Drop in Living Standards Since 1956", when our official forecasters, when our Finance Minister, when our PM have somehow managed to ensure that such a headline has not featured in NZ?

Shouldn't the Kiwi government own up to what's happening? Looks like they're suppressing a story. Looks like we're experiencing a drop in our standard of living as big as what NZ experienced in the 1970s, and maybe even going back to earlier times.



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