Tax hikes on smokes push inflation higher
Increases in tobacco tax are the biggest factor pushing up price inflation this the last three months.
Hikes in tobacco tax are the biggest factor pushing up price inflation this the last three months.
The tobacco tax brings in $1.1 billion a year.
The latest consumer prices index (CPI) rose 0.5% in March, taking annual price inflation to 1.6% for the year, Statistics New Zealand said this morning.
The figure is slightly below the consensus market forecast of a rise of 0.6% and is also below the Reserve Bank's forecast of a 0.7% increase.
The main driver was a 13.5% hike in cigarette prices, caused by the latest annual hike in excise duties.
In a bid to push down smoking, driven by Associate Health Minister and Maori Party co-leader Tariana Turia, the government has since 2010 been bringing in a series of staged increases in the excise tax on tobacco.
They will be phased in over three years and will gradually take the cost of a packet of 20 cigarettes to just under $20.
Without the increased tax impost the CPI increase would have been 0.2% for the month and 1.3% for the year, says Statistics NZ prices manager Chris Pike.
The other main drivers of the rise are a 0.9% rise in rents over the first three months of the year, taking the annual increase to 2.3%.
There was a 2.3% hike for petrol, taking that annual rate of increase to 3.7%.
Offsetting those are falls in lower airfare prices (down 9.2%) and recreation and culture (down 2.4%).
Rob Hosking
Thu, 19 Apr 2012
Thu, 19 Apr 2012
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Tax hikes on smokes push inflation higher
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