GST has pushed inflation to a 16-year peak of 6.4 per cent.
The September RPI figures, released this morning, show that the 3% sales tax which started in May, as well as food and motoring costs, have driven inflation up. But the GST is a temporary effect on the RPI – accounting for 1.9% out of the 6.4% rise – and will drop out early next year.
The last time inflation touched the 6% mark was in March 1992, when it was 6.8%. The latest figures do not include the recent 0.5% cut in interest rates, or the recent cut in fuel costs, which happened after the 12-month period.
Inflation minus mortgage payments hit 6.7%, and the new measure of RPI(Y) which removes mortgage payments, GST and Customs duties, was 4.9%. The figures released this morning cover the 12 months up to September. They show a 0.8% increase on the previous figures for the 12 months up to June.
Pictured: The latest RPI figure was announced at the press conference today
Article posted on 24th October, 2008 - 3.00pm
One Article Comment
How can the statement that 3% GST will drop out of the inflation equation be correct when this divisive tax is constantly applied upon all purchases. Although it could be argued that GST will drop out of ‘year-on-year’ comparison figures the actual effect will be that even if general inflation were to be zero we would continue to experience inflation due to GST as a consequence of the basic nature of the tax itself. As they say, there are lies, damned lies and statistics and despite what the politicians and their pet civil servants tell us regarding GST’s contribution toward inflation we shall, regrettably, continue to experience the adverse effects of this unnecessary tax for years to come.
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