The wheels are coming off
You can't keep adding to the money supply by around twelve to fifteen percent year on year -- as the Reserve Bank has been doing -- and you can't go on a multi-billion dollar spending binge -- as the Clark Government has been -- and not expect to see the result in rising costs.
The latest consumers' price index showed a big rise in the cost of home basics in the past year.
There was a 4 per cent rise in the cost of food, a 6.9 per cent increase in electricity, a 10.6 per cent surge in gas and 8.5 per cent in water supply charges. The biggest hit was fruit, which shot up 34 per cent, followed by rubbish disposal, up 14 per cent... Coupled with that is a 3 per cent rise in rents, while house prices have risen around 14 per cent in the past 12 months.
Inflation is another tax. Aren't we already paying enough?