Inflation is great for the Government and awful for families. High inflation pushes people into higher tax brackets so every household will end up paying more in terms of their average income tax rate and more in terms of GST. So the Government gets more money, but households are left with less real after tax income.
Stats NZ reported:
The consumers price index rose 2.2 percent in the September 2021 quarter, the biggest quarterly movement since a 2.3 percent rise in the December 2010 quarter, Stats NZ said today.
Excluding quarters impacted by increases to GST rates, the September quarter movement was the highest since the June 1987 quarter, which saw a 3.3 percent rise.
Annual inflation was 4.9 percent in the September 2021 quarter when compared with the September 2020 quarter. This was the biggest annual movement since inflation reached 5.3 percent between the June 2010 and June 2011 quarters.
Excluding periods impacted by changes to GST rates, the September 2021 annual inflation was the highest since it reached 5.1 percent in the September 2008 year.
So excluding periods when GST changed (which saw compensating tax cuts) the annual inflation is at a 13 year high and quarterly inflation is at an 24 year high.
This is not surprising with all the extra money the Government has printed and borrowed.