Māori households saw the highest inflation in the March quarter

Price rises for cigarettes and tobacco had the largest impact on inflation for most household group. Photo: Getty Images

Māori households saw the highest inflation in the March quarter and price rises for cigarettes and tobacco had the largest impact on inflation for most household groups, Statistics New Zealand said.

Maori households saw their cost of living rise 1.3 percent compared to the December quarter and Stats NZ said the increase was "driven by higher prices for cigarettes and tobacco, and interest payments."

Overall costs for the lowest-expenditure household group were up 0.8 percent in the March quarter compared with the December quarter, Stats NZ said. Beneficiaries saw their living costs lift 1 percent. Households in the highest earning group saw their cost of living lift 0.6 percent versus the prior quarter, while superannuitants also saw their overall costs rise 0.6 percent.

On an annual basis, living costs for low-spending households rose 1.8 percent while they were up 1.9 percent for beneficiaries and 1.4 percent for the highest-expenditure household group, Stats NZ said. The overall costs for Māori households increased 2 percent in the year to March 2018, which was driven by increasing prices for cigarettes and tobacco, and rent.

Cigarettes and tobacco make up approximately 3 percent of total household living costs for the lowest-spending households, compared to 1 percent for the highest-spending households. “Like the March 2017 quarter, prices for cigarettes and tobacco have seen large rises due to the annual tobacco tax increase,” Stats NZ consumer prices manager Geraldine Duoba said. “The tax increase was implemented at the beginning of the year, bringing the average price for a packet of 25 cigarettes up to $35.14.”

Price increases for rent (up 0.7 percent) and petrol (up 2.5 percent) made the next-biggest contributions to price rises for the lowest-spending households, Stats NZ said.

The introduction of the government’s new ‘first-year free’ policy for tertiary education had a dampening effect on inflation for all households. However, the highest-spending households received the greatest benefit because they spend proportionally more on tertiary education. These households also experienced the greatest effect from the seasonal price drop in international air transport, Stats NZ said.