The Next Kiwi Election will be a Cost-of-living-election
On Friday I somehow managed to get billed $908.70 by the locksmith company to install a front-door lock in Auckland. Yes, inflation is on the run, hitting nearly 5% this past year and looking like it will go higher. Interest rates are also on the rise - together with mortgage lending rates.
Being a remote country, supply-chain disruptions and skill shortages will probably hit NZ harder than most places. On top of our remoteness, the government's stringent border restrictions & lock-down polices have put even more gasoline on supply-side-led inflationary pressures. Such policies seem to have also played into the hands of many big businesses, like the dominant supermarket chains, for example, by allowing them to stay open. By contrast, most small businesses have been thrown into a battle for survival. Furthermore, the government's $100 billion Quantitative Easing money printing program has poured jet fuel onto inflation from the demand side.
So even though its not due until 2023, the battle-ground debate for NZ's next election is beginning to take shape, namely the extraordinarily high cost-of-living in this country. It's how the Sydney Morning Herald is also calling the forthcoming election in Australia.
Yes, the Mount-Everest-sized bungled line in the Minister of Finance's May 2021 budget speech that would make even Ed Hillary blush, namely that "Wage growth, at nearly 3 percent a year will outpace inflation, meaning more money in Kiwis’ back pockets", may return to haunt Grant Robertson. Since workers, particularly low-income ones, are about to find their back-pockets are empty; that they have been robbed by a thief-in-the-night, called inflation.