Grant Robertson doesn't think New Zealanders blame him for inflation as CPI figures expected to rise further

Finance Minister Grant Robertson doesn't think Kiwis blame him for inflation and instead believes New Zealanders understand that this is a "global phenomenon".

The previous Consumer Price Index (CPI) figures released in January showed annual price inflation between the December 2020 and December 2021 quarter had hit 5.9 percent - the biggest annual jump in three decades. That's predicted to rise even higher and cross the 7 percent mark when the latest CPI figures are released on Thursday.

Speaking on Tuesday afternoon at the post-Cabinet press conference - where he stood in for Prime Minister Jacinda Ardern - Robertson was asked if he thought Kiwis blamed him for inflation.

"No I don't. I think that New Zealanders understand that this is a global phenomenon. They only need to see the headlines every night where we hear inflation in the US has gone over 8 percent, inflation in the UK has gone over 7 percent," he said.

"They can see the war in Ukraine, they've heard about the supply chain constraints. They know it themselves because they've ordered goods that aren't arriving as quickly because ships aren't coming to New Zealand as quickly."

Robertson added he isn't surprised that Kiwis are concerned about the cost of living since it's really affecting some people. 

"What we know is that the Government always has to be careful with the way it spends money on behalf of New Zealanders, but these international factors, these global factors, are what is driving inflation."

Grant Robertson.
Grant Robertson. Photo credit: Getty Images

ASB is also predicting another official cash rate (OCR) hike, which Robertson said means people will "no doubt" have some "mortgage stress".

"People need to think about when they're borrowing that they won't necessarily be paying it back at the rate that they initially borrowed it," he said.

"Obviously how that plays out really depends on individual household circumstances. In some cases, it means their discretionary spending will be reduced. In extreme cases, it can lead people to having to sell their homes. But that's not what the studies that you've seen recently have indicated, that's more on the stress end than the other end."

Earlier on Tuesday, Robertson was asked on AM whether the Government would further rein in its spending to tackle the rising inflation.

"We always try to strike a careful balance with our spending but we're not going to lower the price of food by cutting health spending, and a big part of this [year's] Budget about how we set ourselves up for a new health system that's going to deliver to people wherever they live in New Zealand," Robertson said.

"Over the course of the last couple of years, we have invested significantly to support New Zealanders; that's the money we spent on the [COVID-19] wage subsidy scheme and the resurgence payment, and all these ways that we've protected and supported New Zealand households and businesses. I think New Zealanders have appreciated that.

"Our spending is now much more targeted when it comes to COVID and we will be careful about that, but the other side of the coin is we still need to invest in our health system, our education system, to build housing - we've got to keep doing that.

"I think New Zealanders understand there's a balance to be had here; you cut your nose off to spite your face if you decide to not build any more state houses for a few years because that just makes housing problems worse."

Robertson said the Government would continue focusing on striking that balance.

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