CPI Increase Begs Question Why?


Now the proof is in, what is the Government thinking in continuing to cut back and back and back on public transport spending?
It seems to have become a weekly ritual for the Government to slice through more millions of dollars of public transport spending causing councils like Auckland and the Waikato Regional to throw their arms up in dismay at the consequences of cutbacks to public transport services and development.

Today it was no surprise to learn officially from the Government’s Stats department that transport played a key role in the  consumers price index rising 1% for the June 2011 quarter.

The transport grouping measured in the CPI  rose 2.7 percent , with higher prices for petrol (up 4.0 percent), international air fares (up 6.8 percent), and domestic air fares (up 8.0 percent). 

Petrol prices reached a new peak in early May 2011 – slightly above their peak in July 2008 – before decreasing later in May and June.

So let’s recap:  The Consumer Price Index for the last financial year has showed a 21-year-high increase to the cost of living of 5.3% and includes an 11% increase to the transport costs and a 20.1% increase in fuel costs.

Public transport is already under pressure to cope with greater numbers of commuters switching because of the rising fuel prices.

To be cutting back on a sector that still does not get enough money and concentrate on building motorways is immoral and a sign of politicians totally out of touch.

Greens’ transport spokesman MP Gareth Hughes says the Government needed to rethink its transport strategy if it seriously wanted to protect future generations.

“We asked the New Zealand Transport Agency what oil price assumptions they use in their latest models for the Roads of National Significance, and were told oil prices weren’t taken into account.”

It starts to reek of arrogant incompetence.

AA Petrolwatch reported a few days ago that fuel prices rose 4 cents per litre on  July 12 in response to higher commodity prices for oil and refined petrol and diesel which have only been partially offset by our strong exchange rate.

The obsession of the news media with price fluctuations is becoming a waste of time. We now live in an era of high oil prices. They will never go down to the levels of a few years ago.

As the public struggles to make ends meet and cuts back on driving and flocks to public transport, it is a government’s role to provide for their needs.

As the Auckland Council Transport Committee members swallowed the news that NZTA is taking another $14m transport funding away from Auckland its Chair Mike Lee declared: “Auckland needs to speak out about this.”

The Waikato Council Chair , getting the same surprise news said:” I am also concerned at the impacts of these potential funding cuts on public transport facilities and infrastructure, particularly in an area which is already facing pressures to increase services with already constrained finances.”

The number of cutbacks is hard to keep up with. Farebox recovery, track access charges, pay for the new electric trains… where will the Government demands end while the roads of national significance plans remain sacred cows about which  no-one can question the wisdom, query the BCR or ask why such a blinkered policy continues in this fast changing world of economic recession, increasing commodity prices  and dwindling supplies?




  1. Patrick R says:

    In terms of petrol costs, we ain’t seen nothing yet, as we are currently sheltered by the high dollar. Not hard to imagine a situation where oil heads back up towards 150 and the NZD slides at the same time. $4 dollar a litre would be hit real fast…. Still the RoNS would rumble on…. still, it sure would deal with congestion….and crash the economy. We already spend more on oil than we receive from dairy exports, and this is at the top of a diary price boom….Joyce’s policy is just delusional.

  2. KarlHansen says:

    “still, it sure would deal with congestion”

    High fuel prices themselves will deal with congestion. We will have widened motorways with less traffic than now. Joyce and his mates who can still afford petrol (often because they drive government and company cars!) will have the smoothest ride either. They will call their programs a success - hey, we “solved” NZs traffic congestion!

    Talk about (a big chunk of even the) National voters voting against their own best interests!

  3. Patrick R says:

    exactly KH, and here’s where it leads in the US, the daddy of all models for the oil dependent,


  4. Paul Q says:

    Let’s not forget, yes it was a 5.1% inflation, but that includes 2.2% for the GST increase. In all the coverage I have seen of this (including here) no mention is made of the accompanying tax cuts, which for a number of acquaintances I know, more than compensated for the GST increase. I personally have not met anyone who was worse off (yes there were some, but a low %).
    So, it may be a record, but in terms of net income, it wasn’t that bad.


Leave a Comment


XHTML: You can use these tags:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>