Living costs for the average household have increased by 1.6% over the past year, but it’s the lowest-earning households that are facing the biggest impact, new research reveals.

Statistics New Zealand released its Household Living Index for the June quarter today (27 July), revealing Kiwis are experiencing an overall increase in the cost of household expenses.

For the second quarter in a row, inflation in household expenses has hit the hardest for beneficiaries. This group has seen a 0.3% increase in costs in the June quarter, and a 2% annual increase in household costs, when compared with the same period the previous year.

Beneficiaries experienced the highest inflation of all groups for the second quarter in a row, with their overall costs rising 0.3% in the June 2017 quarter. However, the lowest expenditure households have also seen a 2% annual increase in living expenses.

Rise in essential living costs hit beneficiaries hardest

An increase in costs of essential household expenses are having the biggest impact for these groups, according to Statistics New Zealand.

“Rising prices for the basics, such as rent, electricity and food, had a greater impact on beneficiaries,” prices senior manager Jason Attewell says in a media release.

“Over half their [beneficiaries] spending was on these essentials, compared with about a quarter for the highest earners,” Mr Attewell says.

The highest-expenditure households have seen the smallest impact of inflation in household living costs; the cost of household living for this group has dropped by 0.1% over the quarter. However, costs have increased by a 1.4%, when looking at year-on-year figures, according to Statistics New Zealand.

Increases in the cost of vegetables and electricity have had a large effect on all groups, but these price hikes have been balanced out by a decrease in the cost of petrol, Mr Attewell says.

In contrast, the cost of airfares has decreased by 15% across the groups, with high spenders benefiting the most from cheaper domestic airfares.

Household living-costs price indexes provide new insights into the inflation experienced by 13 different household groups. This measure is different from the consumer price index, which only looks at household costs overall, rather than for specific demographics.

Inflation in living costs by demographic – June 2017 quarter 

Quarterly change 

  • beneficiaries – up 0.3%
  •  superannuitants – up 0.2%
  • lowest-expenditure household group – up 0.2%
  • Māori households – up 0.1%
  •  highest-expenditure household group – flat
  • households overall – 0.1%

Annual change 

  •  lowest-expenditure household group – up 2.0%
  •  beneficiaries – up 2.0%
  • Māori households – up 1.8%
  •  superannuitants – up 1.7%
  •  highest-expenditure household group – up 1.4%
  • households overall – up 1.6%

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