Bollard agrees wages won’t keep pace
Reserve Bank Governor Alan Bollard indicated to Parliament’s Finance and Expenditure committee today that he agreed that an increase in GST to 15 percent would add two percent to inflation and living costs, Labour Finance spokesperson David Cunliffe.
Based on the Reserve Bank’s own forecasts in today's Monetary Policy Statement, this means that inflation is likely to outstrip wage growth, with the Labour Cost Index currently looking to just remain steady with inflation without any additional inflationary pressures such as a rise in GST.
David Cunliffe said Dr Bollard agreed with a Westpac Bank report that an increase in GST to 15 percent would add two percent to inflation and living costs.
“This in effect means that most Kiwis will be worse off once GST comes in.
“This is bad news for low and middle income New Zealanders,” David Cunliffe said. “These hard-working Kiwis have struggled through the recession, and now that a recovery is apparently occurring they are about to be hit by this Government between the eyes again
“No wage growth, high unemployment, two-and-a half percent more on GST, higher ACC levies and fears that frontline public services, especially in health, are for the axe,” David Cunliffe said.
“This is National’s idea of catching up with Australia,” David Cunliffe said.
“National is committed to looking after the few at the top of the tree, while the vast majority of Kiwis face an imminent decline in their standard of living.”
