Inflation may be back within the Reserve Bank’s target range, but the past few years have left prices much higher than they were before the pandemic.
Increases have not been evenly spread and some things are much more expensive now than others, compared to 2019.
Here are some of the things that are most expensive now compared to pre-Covid, based on consumer price index data comparing September 2019 to September 2024.
Food
Food has had some of the sharpest price increases in recent years.
Food price inflation picked up pace from the end of 2022 and peaked mid last year, with increases running into double-digit percentages.
Last month, Infometrics chief executive Brad Olsen calculated that overall food prices were a bit more than 18% higher in July this year than they were in July 2021.
Compared to 2019, the price of a dozen eggs is up 94.9%, pumpkins 62.2%, cucumber 62% and kiwifruit 61.5%.
Egg prices were driven in large part by the move away from caged egg farming, and supply challenges due to the pandemic and conflict in Ukraine.
Many horticultural crops have been affected by weather. Foodstuffs said Cyclone Gabrielle had wiped out much of the pumpkin crop in 2023, but 2024 was a much better year.
Postage
Postage for a medium-sized standard envelope is up 76.9% to $2.30 for a standard letter.
In July, the price of a standard mail letter increased by 30c a piece.
At the time, NZ Post said the decline in mail volume was posing a significant challenge and it was looking to cut costs where possible.
“NZ Post has reached the end of government funding support for mail services. This funding allowed NZ Post to continue to provide nationwide coverage for mail delivery at current service levels and with price increases lower than what they otherwise would have needed to be.
“With the conclusion of this funding NZ Post is now required to transition mail business to a state that is financially viable long-term. In addition to price increases, NZ Post will be making business changes to achieve the necessary cost reductions that will help achieve a financially viable long-term future for mail.”
The government is now consulting on plans to reduce the minimum number of days on which NZ Post is required to deliver.
Insurance
Contents insurance is up 58.7%, and dwelling insurance 50.4%.
A spokesperson for the Insurance Council of New Zealand said the Auckland floods and Cyclone Gabrielle had affected repair costs, reinsurance rates and the cost of doing business for insurers.
“We are now seeing signs that some of those pressures such as the cost of reinsurance are starting to stabilise. On the other side, taxes and levies make up around 40% of premiums which are collected by insurers and passed on to the government. In July, the FENZ levy rose by nearly 13%.
“Insurers are also moving toward greater risk-based pricing as more is known about natural hazards such as earthquake and flooding risks, which is also affecting premium levels. We support policies and collective action to reduce risks and take pressure off premiums, including avoiding building in dumb places and investing in measures such as flood protection to better protect communities.”
He acknowledged it was not easy for New Zealanders when the cost of living rose, and said insurers were looking at ways to help customers manage cover as cost-effectively as possible. People could shop around, he said.
Travel
The cost of international airfares was up 53.6%.
Air New Zealand said it had experienced general inflationary pressures across the business and aviation-specific cost increases as well.
“The supply chain underpinning the aviation sector has not recovered from Covid, which has led to shortages in parts and labour and extremely high demand. This has led to significant cost price increases.”
Rates
Local authority rates and payments were up 45.9%.
Indometrics chief forecaster Gareth Kiernan said there was a part of councils’ costs that were more critically affected by Covid-related cost issues than the broader CPI.
“However, over the previous ten years, it’s worth noting that local government rates increased by 58% or 4.7% a year, compared to the overall CPI increasing 16% or 1.5% a year.
“So there’s a longer-term systemic issue around local government charges and/or costs – one that appears is only going to be exacerbated by the major questions about the state of our infrastructure stock and the likely need for greater levels of investment in maintenance and renewals going forward.”
rnz.co.nz
