Pandemic, war and money printing: What's to blame for New Zealand's cost of living crisis?

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Households across the country are bracing themselves as the cost of rent, food and petrol goes up and up, but is there more to what Prime Minister Jacinda Ardern has called the “wicked perfect storm” than meets the eye? 

We know the war in Ukraine and the Covid-19 pandemic are driving up the cost of living, but there are some other developments on the other side of the world that are also, perhaps surprisingly, to blame. 

The Detail looks at Germany's shutdown of coal and nuclear power stations and China's strict Covid-19 lockdowns and what they have to do with our painfully high rent, food and petrol costs. 

On top of that is the global flood of cash, the pandemic-induced money-printing campaigns designed to stimulate economies. 

"All that printed money has gathered together into a big pile and Covid and the war have effectively torched that pile and really got some heat into it," says Bernard Hickey, a political and economic journalist and editor of The Kākā

Hickey explains how the high prices hurt poorer people more than others. 

"People on the lowest incomes who are renters have seen their standard of living drop in real terms by between five and 10 percent in the last year." 

And he warns they are likely to face another year of high costs. 

Prime Minister Jacinda Ardern last week came under fire for initially failing to acknowledge there was a cost of living crisis, instead citing high inflation and international factors such as the war in Ukraine and supply chain delays as reasons why New Zealanders were paying more for the basics. 

But on Monday, she announced the government would temporarily cut fuel taxes by 25 cents a litre to ease some of the pain at the petrol pump and halve public transport fares.  

Critics say the fuel tax cuts are simply a kneejerk reaction and do nothing to tackle another major crisis: climate change. 

Hickey argues the government could do a lot more to wean people off fossil fuels and out of their cars and on to bikes, e-scooters and other more sustainable transport options. 

And now's the time, he says. 

"It's amazing how much you can achieve in wartime. You're using a crisis to get people to change their behaviour."