Liam Dann: NZ Herald Business Editor at Large on Stats NZ phasing in monthly Consumer Price Index reporting

Borrowers' pockets may feel the most impact from more regular inflation reports.  

From next July, Stats NZ will phase in monthly Consumer Price Index reporting on top the current quarterly reports.  

Statistics Minister Scott Simpson says it'll keep businesses, households, and decision-makers, like the Reserve Bank, better-informed.  

The Herald's Liam Dann told Kerre Woodham it will also mean interest rates can be more up-to-date.  

He says the Reserve Bank currently decide rates on a three-month lag. 

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Episode Transcript

Speaker 1 (00:06):
You're listening to the carry Wood and Morning's podcast from
News Talks, he'd be.

Speaker 2 (00:11):
New Zealanders will be getting monthly inflation updates from July
next year as part of a major overhaul of economic
statistics aimed at giving households, businesses and the Reserve Bank
are fast to read on price pressures. New Zealand Herald
Business editor at largely Mdan joins me, Now, what is
this going to mean for people?

Speaker 3 (00:29):
Liam, Well, I guess where it might actually mean something
is in their pockets around mortgage rates. If you sort
of work your way through this, it's good news for
the Reserve Bank. So Australia and the US do this.
We've been complaining about it in the sort of world
of economic commentary and things for quite some time because

(00:51):
you know, when you think about the Reserve Bank trying
to set the right inflation rate interest rate for the
amount of inflation and they're getting a three month lag lag,
it's very very difficult. It's a blunt enough instrument at
the best of times. Over the years they have stats
ENZ has improved their sort of partial figure called the

(01:12):
Selected Prices Index, which comes out every month, and that
has the food So we get food prices, and then
it's got fuel, and then they added accommodation and transport,
so you've got about half of everything we spend money
on accounted for on a monthly basis. But it was still,
you know, it was still a problem. People complained about it,

(01:32):
and it's an hoorray, a sort of a victory for
common sense. The government put aside some extra funding for
stats ENZ and the twenty twenty five budget. These things
seem to take a long time. Everything seems to take
a long time. I mean, this is today, We've got
the date for the start. It's a bit like waiting
for the CRL opening date.

Speaker 2 (01:50):
But anyway, also, can we trust the figures because remember
stats en Z got into all sorts of trouble when
it was trying to do the census, and oh, I.

Speaker 3 (01:59):
Mean I think I think they're I mean, look, GDP
figures are notoriously difficult and often get revised. There's varying
degrees of complexity. I think with pricing, they're creating their
own basket and it's statistically sort of an accurate sample
based on what they survey. What you know, what people

(02:22):
are buying and doing, and that changes, you know, CDs
drop out and I don't know, vinyl records come back,
all this sort of stuff. Stuff happens, and people's tastes change,
so they use this index as it's a basket of goods. Obviously,
just just getting you know, a full figure every month
is going to be really useful for the Reserve Bank,

(02:42):
and I hope it makes ultimately makes the Reserve Bank
more accurate and more precise in the way it can
set interest rates, because, you know, especially during that post
COVID period, you know, it was just things were pretty wild.
Nation was huge, and of course now we're all saying, well,
we all sort of see, you know that that the
Reserve Bank unwound the stimulus too slowly then went really

(03:06):
hard on the you know, on boosting interest rates to
a point that the economy kind of crashed.

Speaker 2 (03:13):
And then stagnated, which is in stagnated.

Speaker 3 (03:16):
But look, it could well have helped if they'd had
up to date data or at least improved things. So
this is positive. I mean, he is hoping by July
twenty seven that we aren't still complaining about inflation so much,
and it's not quite so it'll be you know, I'll
be quite happy if it's one of those problems that
we seem quite good at solving too late in this country,

(03:39):
you know, because it'll come in this monthly reporting and
hopefully inflation isn't quite so acute, so it won't matter
a bit like solving the housing supply shortage when the
market's crashing anyway.

Speaker 2 (03:52):
Will it help any businesses?

Speaker 3 (03:55):
I guess you know, businesses. Businesses are at the cutting edge,
so they kind of know what they're being like that
what their cost their costs. In fact, that's another measure
that the Reserve Bank uses because it's flying a bit
blind with right. Actually it uses this inflation expectations figures.
So a lot of business surveys are used to sort
of fill the gaps at the moment. And those business

(04:16):
surveys are just asking businesses what's happening to their costs
and what they think will happen to their cost next.
So businesses are at the cold face. They know in
their own specific area what's going on, and that that
is useful information as well.

Speaker 2 (04:29):
Okay, so good news, but we can't sort of start
rejoicing until July two.

Speaker 3 (04:33):
And I still like to see stats and ares and
the rbn Z just just coordinate their timing a little bit.
Last this month, we've seen the rbn Z lift interest
rates on I think it was July eight, and then
you know whether or it would have made a difference
that the inflation data came out on July twenty one.
It would be better if they were getting the inflation
data timed to go before the Reserve Bank had to

(04:55):
make a call. But look, all of this is good.
You know they can do it in big countries. We'd
like to see. Yeah, more information is helpful.

Speaker 2 (05:03):
Absolutely, victory. We love we love information. Thank you so much.
Business editor at Luge, Liam Dan, thank you talking about
the stats being released monthly.

Speaker 1 (05:14):
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