Comment: Cost of living continues to hurt Northlanders

Increases in costs will send people over the edge into mortgage arrears and financial distress. Photo / 123RF

OPINION

At the Whangārei A&P Show last year, a display at the National tent asked people to vote on the issue they were most worried about. The cost of living was overwhelmingly the biggest concern for locals.

But this result was unsurprising. The cost of living is a crisis hurting Kiwis in countless ways.

The weekly grocery shop has become a pain in the pockets of New Zealanders just trying to provide for themselves or their families.

According to Statistics New Zealand, food prices are increasing at the fastest rate in 33 years. Even the essentials like fruit and vegetables have increased by 23 per cent in the last year.

Worse still, the Reserve Bank was recently forced to raise the Official Cash rate for the eleventh consecutive time. This news would have been a punch in the guts for anyone with a mortgage.

Around half of New Zealand mortgage holders will be re-fixing their mortgages in the next six months, meaning many will see their interest rates double from 3 per cent or less to more than 6 per cent.

The speed of this hike will leave many scrambling, trying to find hundreds of dollars more every week just to stand still. Some will be unable to do that.

Based on the average house price in Northland, according to the Real Estate Institute of New Zealand, and an 80 per cent mortgage loan, mortgage holders in our region will have to pay an extra $440 a week on their interest.

Sadly, for too many, these increases in costs will send them over the edge into mortgage arrears, unwanted house sales and financial distress.

While there are some offshore factors, domestic decisions encompassing a big-spending, big-taxing, anti-business approach to the economy have failed, forcing the Reserve Bank to lift interest rates, and everyday New Zealanders are paying the price.

We are now enduring a prolonged cost of living crisis, with inflation having persisted outside acceptable levels for nearly two years and expected to stay elevated for many more months to come. New Zealand’s inflation rate is higher than Australia’s, the US’s and many other countries we like to compare ourselves with.

There are alternatives and we have a plan that will strengthen New Zealand’s economy, restoring careful fiscal management, backing productive businesses and reducing the pressure on inflation and interest rates.

When times have been tough such as the Global Financial Crisis and the Christchurch earthquakes, in government we have had the fiscal wherewithal and the trust of New Zealanders to work it through and together we can also get through this cost-of-living crisis.

Thankfully it is an election year, so New Zealanders will have the opportunity to have their say in the contest of ideas that will describe what a credible fiscal and monetary path for the future looks like.