Prime Minister Jacinda Ardern says she can "see the light" as New Zealand deals with a global cost of living crisis she labels as a "wicked perfect storm".
Kiwis are spending, on average, an extra $4000 to $5000 in the past 12 months on basics such as food, rent and fuel. The majority of the increase is in fuel, with an extra $678 a year at the pump on average.
Consumer confidence is also taking a beating. The latest ANZ-Roy Morgan Consumer Confidence survey Darkest Before the Dawn showed consumer confidence plunged 16 points in February to 81.7 - the lowest level since the survey began in 2004.
To try to battle the crisis, the Government announced on Monday it would cut 25 cents a litre off fuel tax and road user charges for three months, and halve the price of public transport for the same amount of time, to help ease the financial pressure at the petrol pump.
Ardern told Newstalk ZB radio on Sunday while New Zealand is going through a "very difficult period", she can see the "light" at the end of the recovery.
"A lot of economists are saying inflation will start to ease over the later part of this year but we are in this wicked perfect storm right now, where economies around the world are recovering from COVID," she said.
"It's putting extra demand into the global economy, we have constrained supply, we've got choked supply chains, we've got a war which is causing an energy crisis and that is affecting Kiwis' everyday lives.
READ MORE
- Petrol prices: New Zealanders react to temporary fuel tax cuts
- How to make your money stretch further
- Kiwis more worried about rising prices than Omicron outbreak
- Anger and shock as cabbage prices climb as high as $9
"It is a very difficult period that we are in as a country but I also see light. Our borders reopen over the next six weeks, which will be a huge change for our tourism, hospitality and accommodation sectors… so I do see the light, we just have to keep supporting Kiwis through these hard patches … our job is to cushion this period while we get to the light."
Ardern said she understands her time as Prime Minister will be defined by COVID but hopes people can look back in the future and see they "prioritised health in order to prioritise people's livelihoods".
"The first time someone told me my time in office was going to be defined by an event was actually March 15 [teorrist attack] and then came the pandemic," she told Newstalk ZB.
"I think it's really hit home for me and I probably didn't appreciate it before I took this job, that leadership is often what you're able to achieve in spite of the things that are unplanned.
"You're right, our time will be defined by this [COVID] but if that means we are looked back on as a Government that prioritised health in order to prioritise people's livelihoods as well in order to prioritise their ability to stay in work and care for their families, if that's what we are known for then I'm OK with that. "
Ardern told the radio station even though the Government had to make some tough decisions in their COVID response, she can look back on them knowing she had saved lives.
"One of our critical advisers through this, who's from the science community, mentioned to me the other day that on their calculation, give or take possibly 5000 people have been saved by what we had done," she said.
"So in those moments, I think of that. Now those 5000 people, they don't know who they are. "They don't know that it was them that has been potentially protected by these measures. But I just keep that in my mind. It's been hard but the flipside would have been even more painful."
