The latest inflation figures show up for me how silly Labour’s election policies were. Do you remember how they campaigned on removing GST off fruit and vegetables, because people can’t afford them?
Well in the last year the average cost of fruit and vegetables has dropped 6.6%.
Overall food prices have increased just 0.6% in the last year. That is good for especially low income families, as food makes up a larger proportion of their budget.
Clothing costs increased only 0.1% over 12 months also.
Also do you recall all the stories about massive increases in electricity prices? Well over 12 months the average cost is up 1.8% only.
Inflation overall for the year was 1.6%. Still a bit higher than I would like it. I believe 1% is the appropriate level to aim for (mid-point of 0% to 2% range) but the Reserve Bank will be happy with 1.6% and interest rates should remain low for a while yet.