18 October 2010 Media Statement

CPI: Basics going up, worse to come with GST hike

The rise in the September quarter consumers price index (CPI) of 1.1 percent reflects increases across basic costs --- largely before National’s 20 percent hike in GST takes effect, says Labour Finance spokesperson David Cunliffe.

“This is more bad news for low and middle-income earners who are already struggling, and who are left further behind following John Key’s 1 October tax switch,” David Cunliffe said.

David Cunliffe said higher food prices, higher rates, higher petrol prices and higher power prices all featured in the CPI increase.

“Struggling Kiwis will note that a quarter of the power price increase is from power companies charging for power consumed in September but invoiced in October at the 15 percent GST rate. That’s a sign of the impact the 20 percent GST hike will have when its effect is felt across the board.

“The factors affecting the CPI increase are often unavoidable extra costs for those least able to pay them,” David Cunliffe said.

“The Government claims it is rebalancing the economy, but any rebalancing it is doing is making it tougher for Kiwis who already have it far too tough, and easier for wealthy Kiwis who already have it good,” David Cunliffe said.

“The tax switch has put thousands of extra dollars in the pockets of the privileged few, while forcing a greater share of the tax burden on to low and middle-income New Zealanders.

“The economy has stalled, unemployment is rising, workers are losing rights, and more than half of New Zealanders haven’t had a wage rise this year.”

David Cunliffe said Labour is committed to removing the entire 15 percent GST from fresh fruit and vegetables.

”Not only is National failing New Zealanders with its lack of an economic plan to lead us out of recession, but National’s GST increase is putting the boot into Kiwis who are already the most vulnerable.

“National believes in an economy that rewards those who are already wealthy. Labour believes in an economy that gives everyone a chance to get ahead.”

ENDS

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