Should wages increase 5% in line with the rise in inflation?

What about rates? We're seeing them go up by far more than inflation consistently year after year - a good indication someone can't live within their budget. This year's rates rise is actually worse than advertised by the council since they haven't exactly been advertising the GST rise we'll all be paying on our rates for the coming year (you have to include that into your rates rise calculations if you want to compare it with this inflation number which also includes the GST rise)

Ideally the council should be keeping rates rises low enough so that they average the rate of inflation, some years a little less, some a little more - after almost a decade  of continual rates rises we're due for a decade of rises lower than inflation so we can get back to where we were before the empire building of the previous councils and their town clerks.

Sorry Hypo, but your scheme would be most unfair given the most unfair progressive tax rate we have. Someone earning very little might be paying as low as 10.25% while someone who earns vgood money will pay 33%. So if we haven't got a flat rate of tax then we should not have flat rate pay increases.

By raising wages and salaries by a percentage the highest paid receive far more than the dollar amount their cost of living had risen by, and those on the bottom rung get far less than they need to still afford the basics.  The cost of living must be reckoned on something so what is needed is a dollar amount.  How much has the basket of food, as used to calculate the rise in food prices, risen?

Plus, how much has electricity risen per average household?  Plus basic amount of fuel per motorist - and these must surely be already available because the media report "Petrol will cost the average motorist an extra $X.xx per week" etc.  Then raise everyone's wages and salaries and benefits and superannuation by the same dollar amount.  That would be fair, for a change.

Why would you bother saving, since the value of your savings would erode in real terms too? (OCR at 2.5%, inflation at 5% equals net return of -2.5%)

To get a true wage increase you need to receive inflation plus at least say two per cent.

This would be the only way to keep up with inflation and also have a pay rise. 

The 5.3% reported includes the one off GST increase of 2.2% on retail prices.

So let's allow for the reduced tax that gave almost everyone over 2% gain in take home pay.

That makes the difference around 3%.