Subdued inflation

Mayor Len Brown

Mayor Len Brown

Annual inflation is expected to bottom out at 0.2%. ? That’s 0.2% for the whole year. ? And guess what is largely responsible for that small increase?

The consumers price index fell to 0.2 percent in the third quarter from 0.4 percent three months earlier, according to a Reuters survey.

The annual rate may also have slowed to 0.2 percent, the figures scheduled for release on Friday are expected to show.

Annual inflation hasn’t been within the central bank’s 1-3 percent target range since the third quarter of last year, when it scraped in at 1 percent.

The bank cut the official cash rate a quarter point to 2.75 percent at the September 10 monetary policy statement and next reviews rates on October 29, before the next full MPS on December 10.

Helping keep a lid on consumer prices in the third quarter was the Accident Compensation Corp’s change to “vehicle risk ratings” to calculate ACC motor vehicle levies on July 1, reducing the levy portion of vehicle registration by $40-$170. Subsidised doctor visits would also weigh on inflation. Against that was a hike in local authority rates, especially in Auckland and Wellington.

Rates increases of 10% plus aren’t just an anomaly, they are GROSSLY out of proportion with the cost of living. ?Council rates have been and remain out of control.

Every three years we vote in a bunch of people that promise us ?low increases, back to council basics, and no reduction in services and what do we get? ?We get rates increases that are 5000% higher than inflation, we get councils plunging us into debt and we have more and more services decoupled to either be removed or to be charged for separately so they don’t appear to be ‘rates’.

At the same time, they go on junkets, put money into ethnic advisory councils, hand money out to youth for the sake of ticking a box that they need to support ‘youth’, and support causes like the opera over rescue helicopters.

Recall elections aren’t enough. ?We need a mechanism where we can hold individual councillors legally liable for gross breach of contract.

 

– NZN via 3 News

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