That's a lot of money, especially for those on a low or restricted income such as beneficiaries and retirees.
While some of that might be covered in pay rises for workers, most Kiwis are going to have to tighten their belts in some shape or form.
That won't be good news for the retail and hospitality sectors which have already done it so tough in the last few years.
Discretionary spending in the form of dinner or drinks out, the new fridge or TV will be off the agenda.
And for those on the lowest incomes, essential spending on food and heating are likely to come under pressure.
Some economists are already talking about New Zealand's economy facing a "hard landing" - essentially a code word for a recession.
ANZ this week downgraded its outlook for GDP growth from 2.4 per cent to 2.1 per cent and have called for the Reserve Bank to increase the cash rate to tackle high inflation.
But it's going to be a difficult balance for our central bank to bring inflation down without also putting too much of a handbrake on the economy.
A higher cash rate translates into higher home loan rates for homeowners and borrowing rates for businesses, meaning businesses may look to cut costs including labour costs which can be one of their highest.
Unemployment is currently at record low levels and there is still plenty of talk of a shortage of workers in many sectors.
But higher costs and belt tightening could also lead to rising unemployment. It is the unemployment figure that banks watch like hawks as a signal that some borrowers may have issues paying their loans and mortgages.
Mortgagee sales have been at record low levels in recent years but are likely to tick up as interest rates rise and if there is a rise in unemployment.
Those who borrowed high amounts in the past year are likely to be the most exposed, with little wriggle room as rates rise of if they experience job loss.
For older generations of New Zealanders, belt-tightening will be nothing new and plenty will have lived through more frugal times in the 1970s and 80s when inflation ran hot.
But for younger generations, cutting back may come as a rude shock.
As New Zealanders move away from a need to stay home to protect their health they may find a new reason to stay put to cut costs.
High numbers of business failures have yet to materialise, with many propped up through Government subsidies but the next year could prove the true test of their resilience.