{"id":424548,"date":"2026-04-30T04:20:11","date_gmt":"2026-04-30T04:20:11","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/424548\/"},"modified":"2026-04-30T04:20:11","modified_gmt":"2026-04-30T04:20:11","slug":"govt-rbnz-amplify-inflation-pain-for-poor","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/424548\/","title":{"rendered":"Govt & RBNZ amplify inflation pain for poor"},"content":{"rendered":"

Here\u2019s a preview of Thursday\u2019s Chorus Substack Live for paying subscribers here on Substack Live <\/a>today at 9:15am<\/a>, including the key news in Aotearoa\u2019s political economy around housing, climate and poverty and my Picks \u2018n Mixes of links elsewhere. I\u2019ll focus on these six things in the Substack Live:<\/p>\n

Household living cost indices published<\/a> yesterday showed prices for those on the lowest incomes have risen 7.9% since the change of Government, while prices for the highest earning households rose 4.4%. That\u2019s because electricity, food and fuel prices rose faster than inflation generally, and are a bigger share of spending by the poor, while the rich have benefited from a fall in mortgage rates and spend proportionally less on those essentials.<\/p>\n

The Government\u2019s moves to index (non-superannuation) benefits to CPI inflation (6.4% since December 2023), rather than wages (6.8%), and to increase the minimum wage by just 3.5%, have compounded the cost-of-living pain for the poorest working households and beneficiaries. <\/p>\n

The way the Reserve Bank sets interest rates is worsening the pain. Its pursuit of CPI inflation of 1-3% means it doesn\u2019t take into account the benefits of falling mortgage rates, which aren\u2019t included in the CPI, but does hold rates higher than they otherwise would be because structurally higher capital costs from Government moves charge users directly for water and power borrowing costs are included in the CPI, whereas they weren\u2019t before. This risks creating a self-reinforcing rate-hike spiral as the RBNZ hikes the OCR in response to higher electricity and water capital costs, which in turn further increases those costs.<\/p>\n

This morning\u2019s scoop of the day is from Thomas Coughlan at NZ Herald-$<\/a>, who reports Winston Peters had to talk Christopher Luxon down from supporting the US attack on Iran. Peters\u2019 decision to disclose that internal discussions to the Herald has now angered Luxon, creating more division in the coalition.<\/p>\n

In news out overnight, the Strait of Hormuz looks set to be closed for much longer after Trump rejected an Iranian offer to open it and told aides and oil executives he\u2019d be comfortable keeping the Strait closed for many months to pressure Iran into giving up its nuclear material. That pushed the oil price up 6% to US$118\/barrel overnight, its highest level since the Iran conflict began.<\/p>\n

In good news, the world\u2019s biggest battery maker, CATL, has just done a deal to mass-produce sodium batteries for grid-scale solar battery farms, potentially reducing electricity storage costs dramatically.<\/p>\n

The presentation I\u2019ll use, which includes the front pages of news sites and newspapers at 5am this morning, is attached below the fold. <\/p>\n

Looking forward to seeing paying subscribers at 9.15 am here<\/a>. A recorded version of the video will be emailed later.<\/p>\n","protected":false},"excerpt":{"rendered":"Here\u2019s a preview of Thursday\u2019s Chorus Substack Live for paying subscribers here on Substack Live today at 9:15am,…\n","protected":false},"author":2,"featured_media":424549,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[72,113,61,60],"class_list":["post-424548","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-ie","tag-ireland"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/424548","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=424548"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/424548\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/424549"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=424548"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=424548"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=424548"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}