Mike's Minute: We are shooting ourselves in the foot over the economy and inflation

There is a key line in the latest ANZ Business Outlook survey that may well mean some of our predictions around inflation sadly come true. The line is "in New Zealand, services inflation had also continued to build even as the global inflation pulse starts to fade; domestically generated inflation and our super tight labour market will keep the pressure on the Reserve Bank to remain tough on inflation." Services inflation, by the way, is rents, housekeeping and servicing your car - all the stuff you pay for regularly and are watching go up every time a bill arrives. That is driven partly by the fact that we seem to have got ourselves stuck in this rut, whereby when we see the bills going up, we go ask someone for more money and, more often than not, they give it to us. And that is driven largely by the fact the Government won't let enough people into the country. When you are faced with paying more or losing workers, you pay. When you pay, you look to recoup it back from whatever you sell, and so it goes. Here is the great fear - unlike other countries that, at least in part, believe the worst of their inflation crisis is over, ours isn't. Even if it has peaked, and that’s still open to some debate, it is still going to be higher for longer. And the longer it is higher, the more we pay to live. It is a sign of a sick economy. We can't help the weather. Some of that will add to inflation, but we can help a lot of other stuff. Although it is in the rear vision mirror, the lending and printing this Government indulged in is now very clearly a massive part of the problem and we should not forget that. The fact the Government refuses to let labour into the country in the numbers we so desperately need is another part of the problem, and we should not forget that either. We should also be asking whether our image is, in some cases, hurting us as well. The minimum wage and migrant wage moves are a massive part of the problem. We are doing a lot of shooting ourselves in the foot here. It doesn’t have to be as big of a mess as it is. Then there is the question of recession - if inflation globally has peaked and easing and soft landings look increasingly possible, if not likely, ask yourself - how come we missed the boat? How come we are worse off than so many others? Grant Robertson likes to suggest it's not a contest. And yet he only suggests that when we look like we blew it.  See omnystudio.com/listener for privacy information.