Inflation Back Above Target: Government’s “Last Chance Budget” Looms

Responding to this morning’s CPI figures showing inflation at 3.1 percent, above the Reserve Bank’s target band, Taxpayers’ Union spokesperson Tory Relf said:

“While today’s number was broadly expected, it’s the next wave that should worry Kiwis. Fuel price hikes are only just starting to work their way through the economy and when transport costs rise, everything follows.”

“With inflation still proving sticky, markets are increasingly betting on earlier interest rate hikes. We urge the Reserve Bank to hold its cautious line. Global uncertainty, particularly around Iran–US tensions, remains high, but there are things firmly within the Government’s control - starting with Budget 2026, now just weeks away.”

“Let’s be clear: government revenue is likely to come in weaker than forecast. But instead of tightening its belt, the Government’s spending, even after adjusting for inflation, keeps climbing. Despite the spin, it hasn’t saved a dime. That only adds fuel to the inflation fire.”

“This Budget is shaping up as the Government’s last real shot to restore credibility. Kiwi households are already making tough choices, it’s time for Wellington to do the same.”

“A credible path back to surplus isn’t optional. It’s essential if we want to avoid a credit downgrade and borrowing costs from becoming even more punitive.”