Higher prices for petrol have driven up quarterly inflation for all household groups, Stats NZ said today.
In the March 2021 quarter, as measured in the household living-costs price indexes, inflation for the all households group increased by 0.9 percent. This is the same for the lowest-spending households, also up 0.9 percent, and compares with 0.8 percent for the highest-spending households. Each quarter, the HLPIs calculate how inflation affects 13 different groups, while the consumers price index calculates how inflation affects New Zealand as a whole.
The main difference comes from the treatment of owner-occupied housing and interest payments, which better aligns with the individual household experience, and better reflects the inflation experienced by a 'typical' household within each group.
Quarterly, transport prices were up for all household groups in the March 2021 quarter, mainly due to rising petrol prices across the board, but affecting low-to-mid-spending households most.
"While higher spending households spend more on petrol, low and middle-spending households typically spend more of their total income on petrol," consumers prices acting manager Matthew Stansfield said.
"Global oil prices plunged in early 2020 as the COVID-19 pandemic took hold. In March 2021, prices had mostly recovered to pre-COVID levels."
Rising rents push up quarterly inflation for beneficiaries
Quarterly inflation for beneficiary households was higher in the March 2021 quarter compared with the all households group. This was partly due to rising rent prices.
Inflation for beneficiary households increased by 1.1 percent, and overall quarterly inflation increased by 0.9 percent for all households.
"Beneficiaries spend almost a third of their income on rent on average, so rising rents have a bigger impact than for all other groups. Rent accounts for 13 percent of spending for the all households group. For Māori households rent makes up 19 percent, and 7 percent for superannuitants." Mr Stansfield said.
| Household group | Actual rentals for housing (percentage) | Interest payments (percentage) |
| Beneficiaries | 29.7 | 2.7 |
| Expenditure quantile 1 (lowest-expenditure households) | 18.1 | 2.5 |
| Māori | 18.9 | 6.2 |
| All households | 13.4 | 5.8 |
| Superannuitant | 7 | 1.3 |
| Expenditure quantile 5 (highest-expenditure households) | 4.9 | 9.1 |
Falling interest rates reduce inflation for highest spenders
Annual inflation for the highest-spending households was much lower than for the lowest spenders in the year to March 2021, partly driven by falling interest rates.
For the highest spenders, inflation was 0.4 percent for the year to March 2021. This compares with 1.2 percent for the lowest spenders, and 0.7 percent for all households.
The highest-spending households are more likely to have purchased their own home compared with other household groups, so would spend proportionally more on interest payments.
"Due primarily to falling interest rates, interest payments for the year to March 2021 have gone down 11 percent for the all households group. This is a greater benefit to the highest-spending household as on average they spend about one dollar in every ten on interest payments. This compares with about one dollar in every fifty for the lowest-spending households." Mr Stansfield said.
Changes in house prices and interest rates both contribute to the change in interest payments.
Passenger transport services cause rise in annual inflation
Annual inflation for all households was up 0.7 percent in the year to March 2021, partly caused by higher prices for passenger transport services and purchase of vehicles.
With international airfares now slowly being reintroduced, we are seeing prices for passenger transport services start to rise to above pre-COVID levels. We have now reintroduced flights for Auckland to Sydney (in December) and Auckland to Melbourne in the March 2021 quarter.
The higher-spending households are more affected by these price rises, as they spend proportionally more of their income on passenger transport services than lower spending households. Superannuitants are also affected by higher international passenger transport.
Purchase of vehicles is also up for the year to March 2021, up 6.1 percent for all households.
"With delays to imports of goods into New Zealand, there may have been fewer cars available for sale," Mr Stansfield said.
"Also, international travel has been restricted due to the COVID-19 pandemic, so people could be looking for other ways to spend their money which may have boosted demand for used cars."
The highest-spending households were most affected by these price rises.
