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GST increase drives 2.3% CPI rise

Thursday 20th January 2011 1 Comment

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The consumers price index rose 2.3% in the December quarter, influenced by the rise in GST on October 1, Statistics New Zealand (SNZ) says.

For the year to the December quarter, the CPI rose 4%, the largest annual increase since the year to the September 2008 quarter when petrol prices peaked.

The annual rate was also affected by the increase in GST from 12.5% to 15%.

That increase could raise retail prices subject to GST by 2.22%. For example, a product priced at $100 before any GST was added, would have sold for $112.50 before October 1, and for $115 after GST went up, SNZ said.

The CPI rise in the three months to December was the largest quarterly increase in the index since a 3.5% lift in the September 1989 quarter, when GST also rose.

Petrol prices rose 6.8% in the December quarter, influenced by the rise in GST, higher fuel excise duty, and higher international prices. Over the year petrol prices increased 14.2%.

While petrol prices were 8.5% lower in the latest quarter than the peak September 2008 quarter, they had risen to about 5% above the overall average for the latest three month period in the final week of December, SNZ said.

International air transport prices rose 5.5% in the December quarter. Seasonal peaks in December quarters were usual for international air transport, and prices were now about the same as in the December 2009 quarter.

Domestic air transport prices rose 7.1% in the three months to December, influenced by the rise in GST, higher fuel costs, and the departure of a service provider in October, SNZ said.

Food prices rose 2.1% in the December quarter, with grocery food up 2.7%, restaurant meals and ready-to-eat food up 2.3%, the meat, poultry and fish group up 2.4%, non-alcoholic beverages up 2.6%, and fruit prices up 3.1%, while vegetable prices were down 3.3%.

For the year, food prices rose 4.6%, with milk, cheese and egg prices up 12.6% to now be at their highest recorded level, SNZ said.

Vegetable prices were up 15.4% for the year, with fruit prices up 5.3%.

Housing and household utility prices rose 1.6% in the December quarter, including a 2% rise for the purchase of new housing, property maintenance services up 4.4%, and electricity up 1.7%.

The 2.3% quarterly increase in the CPI followed rises of 1.1% in the September quarter, and 0.2% in the June quarter.

The 4% annual rise followed rises of 1.5% in the September year, and 1.7% in the June year. As well as the large increase in petrol prices, and milk, cheese and eggs over the year, there was also an annual rise of 17% in cigarettes and tobacco, and a 5.8% rise in the price of electricity.

SNZ said that of the prices collected from retail outlets during the middle of the December quarter, about one in 10 were up by 2-2.5%, in line with the GST rise, one in four rose by more than 2.5%, and one in two recorded no change.

 

NZPA



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Comments from our readers

On 21 January 2011 at 8:58 am arnie said:
As usual electricity prices are away above the rate of inflation.
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