Inflation Hits 4.1 Percent, Which Is 2.9 Percent If You Never Drive Anywhere

Annual inflation came in at 4.1 percent for the year to June, driven largely by fuel. Petrol rose 27.5 percent and diesel rose 71 percent. The Government was quick to note that excluding fuel, inflation would have been just 2.9 percent, a figure available to any household willing to exclude fuel from its life.

This is the statistical manoeuvre known as looking at the number without the bad part in it. Applied consistently, it has broad uses. Excluding rent, housing is affordable. Excluding the winter, New Zealand is warm. The technique asks only that you not need the thing being excluded, which in the case of diesel includes most of the food supply chain.

The Government’s prescription is fiscal discipline rather than stimulus, which means holding the line while prices do not. Motorists are encouraged to appreciate the 2.9 percent from the forecourt, where the other number is on the sign.