Chris Hipkins has surprised even some of his closest friends and backers with the bounce he has secured for Labour in public polls since he became Prime Minister. He has been put to the test since he took over from Jacinda Ardern in the top job, and has shown a quality that was well hidden in his previous portfolios.
It’s not just the long hours he is putting into the job, but projecting the human touch to those hard hit by Cyclone Gabrielle, or the other disasters of recent weeks as well. Then this week he was steering the government in decisions which, as he said, will enable pensioners to start seeing a bit extra in their bank accounts from next month.
For couples over 65, their superannuation payments will now be higher by an extra $102.84 per fortnight between them, while single people living alone will receive an extra $66.86 each payment.
Hipkins said the package of “bread and butter support” would help people who were “really feeling the bite from the rise in the cost of living”.
The changes also mean boosts for those on other benefits, with working-age people on a main benefit set to get $19.81 and $46.20 more per pay depending on the type of benefit and whether they are single or a couple.
Does this mean about 1.4 million New Zealanders will not go backwards, as one newspaper suggested?
Possibly, but that may depend on whether Hipkins can complete the formidable task of bringing inflation under control.
That won’t be easy. Food prices have risen 12% over the past year, and some economists are expecting quarterly rises to continue at 4%. Food prices in February were running at 2.1%.
What makes the task harder for the authorities is that as the government pumps spending power into the economy, the Reserve Bank is trying to squeeze it out in order to bring inflation under control.
New Zealanders will once again have almost certainly to learn there are no quick fixes.
After all, they had to learn the hard way the lessons from economic stimulus during Covid as a result of extra government spending and monetary policy being even greater as a proportion of the economy than elsewhere. The restrictions on the border were more disruptive to the labour market than in other countries, and the desire to crank nominal wages for political reasons more intense.Since this government came into office, the minimum wage has risen by a massive 44%.
Ministers also lifted the effective minimum wage for migrants much higher, and both flowed through to increased labour costs. NZ was in a pro-inflationary environment ahead of the rest of the world.
Now, on one side Hipkins seems to be seeking to sustain spending power (at least through to October), and on the other, to get inflation under control.
Some might say it is an impossible task. This generation of New Zealanders might have to learn the hard way what the answer is.
3 thoughts on “Hipkins shows his quality as PM in securing a bounce for Labour, but now comes the hard part”
who is going to pay for this Chris?? MORE DEBT?? which our Great Grandchildren will have to pay for?? from old age codger Trevor.(90 next month)
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trevor: Just a boy, keep up the informative comments . . . makes me feel young also!
Hipkins displaying fiscal and political ability of a rodent. Like all left wing pollies . . . power at any cost!
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