KEY POINTS:
The pain of rising costs may have people wondering if this week's tax cuts have left them any better off.
An analysis done for the Weekend Herald shows there's every chance household fortunes are on the rise. Taxpayers get an extra $12 to $28 a week from the first round of tax cuts brought in this week, and Working for Families recipients also have a few more dollars.
Figures provided by Westpac bank show salary and wage growth for the year to September will have pushed the average earnings up by $47 a week.
During the same period, the cost of living rose by an estimated 5.2 per cent, or $49.70 per week per average household.
The cost of living increases are dominated by the big items on almost everyone's gripe list - petrol cost on average an extra $14.92 a week, and food $28.25 more.
For homeowners, the average increase in the cost of a mortgage for the year ended September is $10.87 a week.
Despite the combined average increases in mortgage and cost of living of $60.57 a week, average increases in earnings of $47 per person, coupled with tax cuts, should win out.
Westpac research economist Dominick Stephens said that while people might now be better off on average, "we are used to getting better off at a more rapid rate."
There was always a large spread of people with different circumstances.
"If you're mortgaged to the eyeballs, and you bought a house in the last two years, and you commute a long distance to work, you are probably a lot worse off than you were a year ago," he said.
"If you're retired and have no debt and only drive your Suzuki Alto to the bowling club once a week, you are probably better off."
Lower income people paid a bigger percentage of their earnings in increased living costs, and were most likely to lose their jobs.
ANZ bank chief economist Cameron Bagrie said the costs of living in the last year or so had substantially overtaken the value of the recent tax cuts.
The reason people were noticing rising costs so much was that "the stuff which is going up is your everyday items", Mr Bagrie said.
"It's the food. It's the power bills. It's those sort of things that you notice every month.
"The things which are going down in price are all the electronic goods, such as plasma televisions and computers.
"But they are big-ticket items - you don't go out and buy one every couple of months."
Ups and downs
In the year to last month, it is estimated:
* The average New Zealand household was paying $49.70 more a week in costs of living than the year before, including $28.25 more on food and $14.92 more on petrol.
* The average household was paying $10.87 more on mortgage costs.
* The average salary and wage earner was earning an extra $47 a week.
As of October 1, wage and salary earners are receiving tax cuts of between $12 and $28 a week, superannuitants about $12 extra a week and Working for Families recipients up to $6 more a week.