WELLINGTON (CU)_Hundreds of thousands of households in New Zealand are currently struggling with spiraling living costs, as is the case in many countries across the globe. Accordingly, the government has launched a range of new measures aimed at supporting those who are most affected by the crisis.
These new support measures, announced in the government’s annual budget, include inflation payments of 350 New Zealand dollars ($220) over a period of three months, starting from August. The payments will be made to more than 2 million lower-income adults earning less than 70,000 New Zealand dollars ($44,000) per year. Several other temporary measures, including a cut to gas taxes, will also be launched to help households navigate what has been described as “the peak of the global inflation storm.”
In a recent report, the Treasury warned of a slow economic growth owing to rising interest rates, a decline in the government’s pandemic spending and supply chain issues which have now been exacerbated by Russia’s recent invasion of Ukraine. The department projects unemployment to drop to 3.1 per cent this year, before rising to 4.7 per cent by 2026. During this period, inflation is expected to fall from the current 30-year high of 6.9 per cent to 2.2 per cent.
As countries across the globe begin to recover from the economic downturn brought about by the pandemic, so is New Zealand, with its government’s books expected to return to the black by 2025 following heavy borrowing amid the global health crisis. However, the country’s net government debt is forecast to remain much lower than in most developed nations, rising to 20 per cent of the GDP in 2024 before dropping to 15 per cent two years later.
“Our economy has come through the COVID-19 shock better than almost anywhere else in the world,” Prime Minister Jacinda Ardern said in a statement. “But as the pandemic subsides, other challenges both long-term and more immediate have come to the fore.”
