What inflation looks like in New Zealand from the 1980s to now

It's safe to say many of us hate Inflation. We hate how it eats away at our savings, making life more expensive. We hate how it seems to kick us when we're down, just when we're getting comfortable or planning for the future.

But there's little time to wallow in hate, because here it comes again. This week the Reserve Bank signalled it expects inflation to hit 5% by the end of next year. That's the highest it's been since the mid-1990s.

If you're anything like me, you'll be wondering just how much things have changed since the last time we saw inflation in the double digits. Back in the 1990s, I was a teenager. I bought my first guitar for about $100, to impress a girl. I bought my first pack of cigarettes for something like $1.50 each, and happily puffed away on the quiet with my mates.

So what did inflation look like then, and how does it compare to now? And if the Reserve Bank is correct, how much will we be paying for basics in 12 months' time? Back in the 1990s, the nation's central bank was tasked with keeping inflation between 0% and 2% per year, which isn't far off the target range of between 1% and 3% that it is now.

In August 1990, the average weekly wage was $516. By 2001 it was $562, according to Statistics New Zealand data. That's a rise of about 4% in 10 years, well below inflation over the period.

With that context in mind, here's a look at what some essentials cost in the 1980s and 1990s, compared to now. And we've priced them against the average wage, for some context.

Bread: In 1989, the average price of a loaf of bread was 97 cents, according to Statistics New Zealand. By 2019, it was $2.40, according to the Ministry of Business, Innovation and Employment's consumer price index.

That's a rise of about 2.5% per year, a bit below the average inflation rate over the period. Today, the average wage is about $NZ730 per week. That means the average loaf of bread costs about 3.3% of the average wage, or about two hours of work.

Milk: In 1984, the price of milk was 67 cents per litre, according to historical data from the New Zealand Dairy Board. It hit 99 cents in 1994, according to Statistics NZ.

The consumer price index shows that between 1984 and 2021, the price of milk and milk products doubled. In 2021, the median price for 1kg of milk powder was $2.70, while the median price for a litre of fresh milk was $1.99.

Based on the average wage, that means milk costs about 2.5% of the average wage, or about an hour and 40 minutes of work.

Fruit juice: In 1989, the average price of a litre of fruit juice was 99 cents, according to Statistics NZ. Things have changed quite a bit since then, with the rise of boutique juice brands and the like.

In 2021, the median price for 1l of fruit juice was $2.79, according to the consumer price index. Based on the average wage, that's about 3.6% of the average wage, or about two hours of work per week.

Cigarettes: In 1990, New Zealand's most popular cigarettes were Benson & Hedges and John Player Specials, which sold for 49 cents a pack, according to marketing reports from the time.

Today, the average price of a pack of mid-range cigarettes is about $34, or just over 6% of the average wage.

Of course, smoking rates are much lower than they were in the 1990s, and few would argue smokers don't have a choice in the matter. But it serves as a reminder just how much more expensive life's little luxuries can become, especially when they're taxed as extras.

Alcohol: In the late 1980s, beer typically cost about $6 a carton (24 x 330ml bottles) according to historical data from the now-defunct Wellington City Council liquor licensing trust. In 2020, the average price of a slab of beer was $24, according to Statistics NZ.

Based on the average wage, that's about 9% of the average wage, or about five hours of work.

Women's underwear: In 1986, women's underpants typically cost $4 for a pair, while bras averaged $12 to $15 each, according to historical records from Wellington's compulsory licensing trust.

These days, a pack of three bras can be had for $20, while underpants come in a triple pack for about $15. Based on the average wage, that's about 1.5% of the average wage, or about an hour of work for a three-pack of bras or underpants.

Women's shoes: In the 1980s, a pair of women's shoes typically cost $40, according to the licensing trust records.

These days, it's not hard to find a pair of women's shoes on special for $40. But that's the recommended retail price, and generally speaking, the more fashionable or fancy the shoe, the higher the expected price. Based on the average wage, that's about 5% of the average wage, or about three hours of work.

Fuel: In 1989, the price of fuel was about 63 cents a litre, according to Statistics NZ. It hit 99 cents in 1994.

The consumer price index shows fuel has roughly doubled in price since then. In 2021, the median price for 500ml of fuel was $2.55. Based on the average wage, that's about 6.7% of the average wage, or about four hours of work.

Sugar: In 1984, the price of sugar was about 47 cents per kilogram, according to historical data from the New Zealand Dairy Board. In 2021, the median price for a kilogram of sugar was $2.34, according to the consumer price index.

Based on the average wage, that's about 3.2% of the average wage, or about two hours of work.

These days, many of us would baulk at spending some of the amounts outlined above. We're a nation that likes a bargain. Many of us will wait for the items to be on special before we buy.

But that just goes to show how much inflation can affect us, especially when we have little or no control over it.

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