Wages are growing, cost of living increases have been modest, and interest rates are at 50-year lows.

The latest cost of living data shows consumer prices rose by just 0.7%in the year to June. This was the lowest annual increase in the cost of living for nearly 14 years and the fourth annual increase below 1%.

After-tax wages are up 22% since 2008, over twice the inflation rate. Gross wages have increased 14%, after tax they have increased 22%.  Inflation has been 9%.  This means real, after-tax wages have increased by 12% since Sept 2008.

To put that in context, in the nine years to September 2008, on average real after-tax wages increased by only 4% over that entire period.

The fiscal outlook has improved as a result of National’s sound management and we are on track to surplus in 2014/15.