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New Zealand and Australia’s headline inflation rates are almost the same, at 7.2% and 7.3% respectively in the year to September.
The key difference is that Kiwi wages are beating inflation, while Australia’s are falling in real terms at a rapid rate.
Take Wednesday’s wage data from Statistics New Zealand. Annual average ordinary hourly earnings soared 7.4% in the year to September, while wage inflation, as measured by the labour cost index (LCI), rose to 3.7%:
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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
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