Post-Cabinet press conference with Grant Robertson, joined by David Clark with the Government’s response to Commerce Commission supermarket inquiry
Acting Prime Minister Grant Robertson will front the post-Cabinet press conference at 3pm today.
He’ll be standing in for Prime Minister Jacinda Ardern who is travelling in the United States.
Robertson is expected to be joined by Commerce and Consumer Affairs Minister David Clark.
Clark is currently leading the Government’s response to the Commerce Commission’s market study into the level of competition in the supermarket sector.
The Commission delivered its final report in March. The Government has not yet announced how it would respond to that report, or which recommendations it would adopt, beyond measures to free up land for the competition, which was announced at the Budget.
The Commission estimated Countdown and Foodstuffs’ were making excess profits of about $430 million a year. As the political battle over the cost of living crisis has raged on, the Government said that it reserved to go further than the Commerce Commission’s recommendations if it saw the need.
Monday marks the beginning of another sitting week in Parliament. It is the first sitting week since the Budget was delivered a fortnight ago.
The Budget announced $5.9 billion in new spending, plus a $1b cost-of-living package which mainly went towards paying for $350 payments to more than $2m people. Robertson said the package showed a “balanced approach”, but his opposite number, National finance spokeswoman Nicola Willis has accused the Government of “band aid economics”.
Robertson shot back at National over the weekend after National Leader Christopher Luxon told a National meeting, “The cost-of-living crisis – that’s how we’ll win this election”.
Robertson had the comments worked into a Labour party election ad. He said the comments showed “global inflation is all just a political game to National”.
“It’s not a game Christopher, it’s people’s lives,” he said.
The spat over inflation rumbled through the post-Budget recess week, in which the Reserve Bank raised the Official Cash Rate.
Higher mortgage rates, combined with already high house prices now mean it is more difficult for a first-home buyer to service an average mortgage than at any time since the last days of the Clark government 14 years ago, when the OCR rose above 8 per cent.
National’s housing spokesman Chris Bishop released a statement on Sunday morning saying the Reserve Bank’s most recent Monetary Policy Statement “will make for chilling reading for mortgage holders, with the central bank predicting the interest rate on one and two-year mortgages will hit 6 per cent next year”.
“This will mean a major hit for Kiwi budgets. A household that has borrowed $700,000 would face annual interest costs of $42,000, meaning they would have to pay more than $800 a week before they even begin to reduce the actual loan,” Bishop said.
“The pressure will be especially great for those who have recently entered the property market, with the Reserve Bank acknowledging that many first-time buyers from 2021 will find it difficult to pay their mortgages and cover their other expenses,” he said.