New Zealand's economy poses challenge for election victor

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New Zealand's economy poses challenge for election victor
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A Local Culinary Adventure: inspired by Halifax's Seaport Market | SaltWire #cooking #cookingtipsWELLINGTON - New Zealand’s major parties have promised voters cost-of-living relief if they win Saturday’s general election, but there is one major obstacle – a central bank that says borrowing costs must stay high and growth subdued for some time to rein in inflation.

Much of this is beyond the immediate fix of any government, yet there will be expectations for the incoming-administration to ease financial pressures on families and businesses. They said the market was concerned a right-leaning grouping will not be able to fund tax cuts and that a left-leaning government won’t be able to curtail spending as forecast.

For a single average income earner with no children, the tax cuts equate to NZ$24.85 a week or about a 2.4% increase in take-home-pay, according to data from Statistics New Zealand and the National ‘tax calculator”. Annual inflation in New Zealand is currently running at a historically high 6% rate. It looks unlikely there will be any relief on that front. The Reserve Bank of New Zealand said last week that it would not lower the official cash rate from its 15-year high until it was certain that inflation was heading back to its target band of 1% to 3% and did not entirely rule out the possibility of further hikes.

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