The price of everything is set to increase

 

The winter of discontent is finally upon us. Fuel price increases and minimum wage increases are about to be felt and the price of everything is going to increase. Things are about to get really ugly for this government. This from  Newstalk ZB Quote:

The cost of your ASOS order, buying your daily coffee, fruit and veggies and filling up on petrol is set to increase.

According to Retail NZ’s latest Retail Radar survey, 32 per cent of retailers are expecting their prices to increase in the next three months.

“There are cost pressures across the board, it’s pretty much everything that is likely to be impacted,” Greg Harford, Retail NZ general manager of public affairs, said.

Fuel prices, and therefore freight and transport costs, the increase to minimum wage and rising property prices are expected to push up the cost of goods. End quote.

The regional fuel levies aren’t set to kick in until 1st July, which means that those price increases that are now starting to be felt will only be the beginning. Quote:

If there continues to be uncertainty in international oil pricing, there have been signals that will flow through to the price of airfare and it’s reasonable to assume that will flow through to the pricing of online deliveries as well.”

He said the 75 cents hike to minimum wage would impact retail prices.

“People who are picking fruit and vegetables will be paid more and that will have flow-on consequences right through into the price of food,” he said. End quote.

Of course, it will flow through to the price of food. Food has to be transported. Prices are already increasing, and this will continue. Quote:

RCG associate director Andy Florkowski said increases would impact online goods such as books, stationery, clothing and fashion accessories.

“I don’t foresee there is going to be a huge spike in prices but what I do think is that local retailers are going to start to make up some of the margins they’ve been losing over the last couple of years due to GST loophole.” Florkowski said.

“By retailers starting to increase some of these prices, I think it’s going to be part and parcel of the level playing field because the online GST loop has been closed so they won’t be competing purely in price just to be within the market.”End quote.

This is just someone who has been drinking the government Kool-Aid. There is unlikely to be a significant levelling because the ‘online GST loop’ has been closed because it hasn’t. Lots of small overseas retailers will simply not bother to collect GST, and large companies like Amazon have refused to comply. But don’t assume that this will mean no more overseas purchases by retail customers. There are ways of getting around these rules, and the tax take from this will be very small in the end. Quote:

BNZ senior economist Doug Steel said a weak dollar often pushed up the price of imported goods.

“There are so many factors influencing pricing, generally, including in the retail sector so certainly some things suggest prices will start to push higher,” Steel said.

“The New Zealand dollar has generally been lower over the last year of so and when that happens it tends to push up the price of imported goods… the likes of clothing, footwear, furniture, textiles, appliances and cars.” End quote.

Yes. The lunatic economic policies of this government are already causing a drop in confidence, which in turn is going to seriously affect the dollar at some stage. Then a whole new raft of increases will start to happen, including mortgage interest rates. Quote:

“The labour market is certainly tightening but we haven’t yet seen much wage pressure in general but we do have the likes of the minimum wage coming through, and we’re already seeing some signs of that pushing up retail prices.”

The price of takeaways and those offered in restaurants had increased significantly in the last two months, largely due to the increase in minimum wage, Steel said.End quote.

Nurses, bus drivers, port workers, teachers and now public servants are all on the warpath for more money. So, there is lots of wage pressure, and it will only get worse. Quote:

“Another general upwards influence on prices will be rising fuel costs. We’ve seen a big increase in the international price of oil and that’s come through to the price at the pump domestically… and that’s having indirect costs on retailers,” he said.

“We think there’s some upward pressure on prices, so in the least, the price declines we’ve seen over the last 12 months look like they might be coming to an end.” End quote.

So now fuel prices are likely to rise again, with international oil prices increasing. This is another increase in fuel prices, on top of those already seen, and the fuel levies still to come.

Wait until petrol hits $3 a litre. Coming to a place near you. Soon.

Please note that mostly these are not price rises brought about by increased demand. They are price rises brought about almost entirely by government policy. Economics 101. As prices rise, wage demands increase. Wages increase, and prices go up. It is a never-ending cycle that we have managed to stay away from for the last ten years. Nine months into a socialist government and hey presto! Here we are again.

As if things aren’t bad enough, expect to see an increase in crime. Dairy owners are already bearing the brunt of the cigarette price hikes. The next will be petrol stations with customers driving off without paying. But never fear. The government’s catch and release policy will ensure that the same criminals will be back to do this over and over again. In the meantime, life just gets tougher and tougher for ordinary law-abiding citizens, who just want to lead a normal and decent life.

It all may even make the winter of discontent 2000 look like a cakewalk. Watch this space.


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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

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