Housing, household utilities and food prices squeeze beneficiaries the most in 2Q
Beneficiaries were the hardest hit by inflation in the second quarter of the year due to higher prices for housing, household utilities and food, while overall prices continued to dip for top earners, Stats NZ said.
Overall costs for beneficiaries rose 0.3 percent in the June 2017 quarter, compared with the March quarter, according to Statistics New Zealand. Households in the highest earning group, however, saw their cost of living fall 0.1 percent, Stats NZ said. The agency began publishing the quarterly data in November last year to provide new insights into inflation experienced by 13 different groups including beneficiaries, Maori, pensioners and others based on their income and spending patterns.
"Rising prices for the basics such as rent, electricity, and food had a greater impact on beneficiaries," prices senior manager Jason Attewell said. "Over half their spending was on these essentials, compared with about a quarter for the highest earners."
It noted that in the June 2017 quarter, higher prices for vegetables and electricity had a large effect on all groups but this was countered by lower prices for petrol. High spenders benefitted the most from cheaper domestic airfares, Stats NZ said.
On an annual basis, living costs for low-spending households and for beneficiaries rose 2.0 percent while it rose 1.4 percent for the highest-expenditure household group, Stats NZ said. It noted that high spending households spent proportionally more on high-tech items, which had price falls for the year.
"Technology generally improves for items such as smartphones. This reflected as an effective price fall, as consumers receive more value for the same price. Mid to high earners and spenders have more discretionary income for high-tech items and receive the most benefit from these improvements," Stats NZ said.