Annual inflation at 2.7 percent in June 2025 – media release
21 July 2025
Aotearoa New Zealand’s consumers price index (CPI) increased 2.7 percent in the 12 months to the June 2025 quarter, according to figures released by Stats NZ today.
The 2.7 percent increase follows a 2.5 percent annual increase in the 12 months to the March 2025 quarter.
“Although the annual inflation rate increased from the March 2025 quarter, it remains within the Reserve Bank of New Zealand’s target band of 1 to 3 percent – the fourth consecutive quarter it has done so,” prices and deflators spokesperson Nicola Growden said.
The largest upwards contributor to the annual inflation rate was local authority rates and payments, up 12.2 percent. Rates contributed 13 percent of the 2.7 percent annual increase.
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The Government is fooling itself if cutting 10% of the civilian workforce is how you build a modern, combat ready defence force at a time of rising security risks.
NZDF today confirmed final decisions that will see 255 roles cut across the force, making a total of one in ten roles axed in the last year (including voluntary redundancies). This is down from the original proposal of347 roles in March. 46 further roles may go depending on the outcome of additional consultation.
“This is incredibly shortsighted when a modern defence force needs a well-resourced civilian workforce to support our men and women in uniform,” said Fleur Fitzsimons, National Secretary for the Public Service Association Te Pūkenga Here Tikanga Mahi.
The cuts include roles in the army, air force, strategy, health and safety, Defence College, Joint Defence Services, Joint Support Group, financial, Chief of Staff office and Veterans Affairs.
“This is all about saving money, not strengthening security. It doesn’t make any sense when tensions are rising across the Asia Pacific area and in Europe. It was only a few months ago that a warship from China was in the Tasman Sea.”
NZDF told staff today it was facing a tough fiscal environment which has forced it to make deep cuts in a number of areas to save money including:
“cancelling some training activities and major exercises”
“reducing flying hours, sea days and other training”
“pausing property maintenance”
“The Government is investing in military equipment and technology which is a good thing but is blind to the fact that civilian defence workers, like engineers, IT specialists and many others are needed to support this.
“All these cuts to jobs will do is increase already heavy workloads, leading to more stress and burnout, and forcing those in uniform to pick up the work of the civilian workers. That is not what they signed up to do and won’t help NZDF improve retention.
“Civilian workers are the backbone of Defence, yet the Government continues to disrespect their vital role. It’s the wrong choice.”
The Public Service Association Te Pūkenga Here Tikanga Mahiis Aotearoa New Zealand's largest trade union, representing and supporting more than 95,000 workers across central government, state-owned enterprises, local councils, health boards and community groups.
Greenpeace spokesperson Will Appelbe says “It’s only a matter of time before we see a baby harmed in New Zealand due to consuming formula mixed with nitrate contaminated water. It is absolutely unacceptable that rural communities are unable to drink the water coming out of their kitchen tap – and this is happening more and more frequently.”
“The main source of this contamination is the intensive dairy industry – in particular, the overuse of synthetic nitrogen fertiliser. To avoid the risk to life that is posed by nitrate contamination, we need to stop the pollution at the source, and that means implementing a sinking cap on the use of synthetic nitrogen fertiliser.
“However, the Luxon Government is doing the opposite. Rather than changing our laws to protect freshwater, Chris Bishop is implementing a freshwater pollution plan. He is weakening the national direction on freshwater, and removing the cap on synthetic nitrogen fertiliser use.
“We know that the use of synthetic nitrogen fertiliser is causing nitrate contamination, and already towns in rural areas like Canterbury and Southland are facing the consequences of this, with undrinkable water. Removing limits on fertiliser use will worsen the drinking water crisis – and it’s only a matter of time before it proves to be dangerous.”
Aotearoa is leading the world in gambling harm innovation with the launch of Pātea – a groundbreaking digital platform designed by Māori, for Māori, to help free whānau from the burdens of gambling harm.
Pātea, meaning to be free or lifted of burden, is an indigenously designed, built, and operated digital platform, the first of its kind globally. It was co-designed with whānau who have lived experience of gambling harm, ensuring every part of the app feels supportive, culturally grounded, and whānau friendly.
Morris Pita, CEO of the Māori-owned and operated software firm Tai Pari Mōhio Ltd, is excited by the impact of digital technology as a tool to reduce gambling harm.
“It has been an incredible experience for our tech and data science team to take their unique blend of technical and cultural skills, and use these to build a state-of-the-art cloud platform and application – deploying agentic AI to deliver 24/7 online support to whānau suffering from the impact of gambling harm.”
With the rapid rise of online gambling and digital casinos, whānau are being targeted like never before. Māori communities, already disproportionately affected by gambling harm, are particularly at risk.
“We see the harm gambling has every day in our communities,” says Jason Alexander, Chief Operating Officer at Hāpai Te Hauora. “The environment is changing fast, and we need new tools that meet whānau where they’re at. Pātea is one of those tools. A safe, judgement free space to pause, reflect, and find support.”
Pātea was created by three Māori-led organisations – Hāpai Te Hauora, Whare Tiaki Hauora, and Tai Pari Mōhio – combining over 60 years of expertise in public health, mental health, digital innovation, and whānau-led service design.
Pātea offers features like:
24/7 generative AI chatbot – providing instant, culturally safe support
Online counselling sessions – available for gamblers and their whānau
Whānau testimonial videos – real voices sharing hope and strategies
Self and whānau assessment tools – to identify when help is needed
Links to local services and app-blocking tools
Accessible, easy-to-read information on gambling harm
“This isn’t just another platform. It’s a digital extension of kaupapa Māori care, designed with the people we serve, not just for them,” says Alexander.
Covering period of Monday 21st – Thursday 24th July – Clear skies and frosty mornings sticking around this week
• Frosty mornings through the week • Settled weather for most • Showery first half of the week for eastern North Island • Fog may hang around in inland South Island valleys through the week
Settled weather is set to persist through the week over New Zealand as a high-pressure system sits over the country. After wetter conditions in some areas over the past few weeks, some may welcome the return of calmer, drier weather.
MetService meteorologist Oscar Shiviti says, “this week is a great time to enjoy outdoor activities, especially while some are still busy at school, as clear skies and light winds are expected for most regions”.
Shiviti continued, “the fine weather this week does come with a downside of cold, frosty mornings”.
The clear skies and calm conditions, as a result of the high-pressure system, allow for temperatures to drop overnight, particularly in inland areas.
This morning (Monday) was especially chilly, “with Christchurch recording its coldest July temperature so far at -3.8°C, and Taumarunui reaching its lowest temperature of the year at -3.6°C” added Shiviti. These frosty starts are expected to continue throughout the week, especially in the Mackenzie District as well as in Otago, which may experience the coldest mornings, along with possible fog. Twizel drops to -5°C on Tuesday and Wednesday morning, while inland parts of Dunedin wake up to a frosty -3°C.
While the coldest temperatures will be found in the South Island, “frosty conditions are expected widely across the North Island too, even parts of the Auckland region could wake up to a touch of frost on Tuesday morning” Shiviti added.
Although most of the country will stay dry, there are still a few areas that could see some wet weather. The east of the North Island, such as Tairāwhiti Gisborne and Hawke’s Bay, sees cloudier and showery conditions through to Wednesday night due to southeasterly winds bringing moisture in from the ocean.
Later in the week, a front is expected to approach from the Tasman Sea, meaning there is a chance of a shower or two in the southwest of the South Island for the second half of Thursday. Showers and rain should become more pronounced in Fiordland by Friday as the front arrives.
For more on the weather keep an eye on the MetService website (www.metservice.com).
Source: Kiwibank Senior Economist, Mary Jo Vergara.
Kiwi inflation likely lifted to 2.7%yoy from 2.5%yoy over the June quarter. But context is key. A reacceleration in imported inflation is driving the move higher. It was food and electricity that continues to bite at our back pockets. Domestic price pressures are cooling.
This is the first test for an August cash rate cut. It's widely expected that headline will push towards the top end of the RBNZ's target band. But more important to policy is underlying inflation, which continues to ease. Spare capacity within the Kiwi economy is keeping downward pressure on domestically generated inflation.
Downside risks to medium-term inflation remain. Whether that's a consequence of a slowdown in global economic growth, or a diversion of trade marked at a discount. There is still a case for more accommodative interest rate settings.
Kiwi inflation accelerated over the June quarter. Annual headline rose to 2.7% from 2.5%. It's a move in the wrong direction. But context is key. A strengthening in imported inflation is driving headline higher. But domestic price pressures, on balance, continue to cool. And most importantly, the underlying trend in consumer prices is weak. Excluding the volatile movements in food and fuel, annual core inflation lifted to 2.7% from 2.6%. A move that was better than many had feared, and one that will improve into next year. For now, there's little risk this bout of high inflation will persist. Especially given that there's still significant spare capacity in the Kiwi economy.
Here's a data dump. Non-tradables, domestically generated inflation, rose 0.7%qoq and 3.7% on the year. Excluding housing related stuff, it's up 3.5%. And there's good news for housing related stuff. Building costs fell 0.1%qoq (the lowest we've seen since 2021) and 0.8% over the year. That's the weakness we've seen since 2009. Falling materials costs, like steel, match the anecdotes were hearing from developers. And wages within the industry have softened also. There's less work. Renters face weaker rent rises as well. More good news. Rents rose 0.8%qoq and 3.2% over the year… down from 3.7% last quarter. So whilst we're being hit with hefty food, electricity, insurance, and council rates… at least our rents aren't rising as much… or if you own a property, interest rates are less painful (but at these levels, they still hurt, not help).
Data released by Statistics New Zealand today shows that the cost-of-living crisis is getting worse as inflation as measured by the Consumer Price Index rose annually to 2.7%, said NZCTU Te Kauae Kaimahi Economist Craig Renney.
“This marks the third straight quarter in which annual inflation has increased, up from 2.2% in December 2024. A key reason why inflation didn’t break out of the 1-3% target barrier is that petrol pricing was down. Excluding petrol, annual inflation was 3.2%,” said Renney.
“The data shows that prices rose most in areas that are particularly hard to manage for middle- and low-income groups. Household energy rose 9.1%, with gas prices rising 15.4%. Dairy and eggs rose 9.9%. Dwelling and contents insurance rose 10%. Rates are up 12.2%.
“This increase is likely to put further pressure on households, particularly those on the minimum wage – who received a pay rise of just 1.5% in April. When last measured, 48% of workers got a pay rise less than 2%, while 59% got a pay rise less of than 3%. It is these workers who are paying the price of the cost-of-living crisis.
“The Government has made a mess of the economy. Rents are still rising faster than general inflation, despite billions in tax breaks. Food pricing is rising at 4.2% despite the governments claims to be focused on supermarket competition. Workers are paying the price for the Government’s inaction.
“The economy is stumbling and is likely heading back to negative growth, and the Government has consistently cut investment. Trade tariffs and uncertainty are likely to add further concerns to growth. The cost of tertiary education rose significantly due to the removal of first year free – making it harder to access skills training during rising unemployment,” said Renney.
Kmart workers are celebrating today after Workers First Union members ratified a new 2-year pay deal that includes minimum living wages after six months’ service for both 2025 and 2026, union-only bonuses and more.
Rudd Hughes, Deputy Secretary (Retail) at Workers First, said he believed the new agreement put Kmart workers among the highest-paid retail chain workers in the country.
“We’re extremely proud of our Kmart bargaining team and hopeful that this new agreement sets a standard in the retail industry that other big brands are paying attention to,” said Mr Hughes.
“We started negotiations with the company talking about the CPI and “clawbacks” of previous entitlements, but due to the efforts of our dedicated group of Kmart workers on the bargaining team, we’ve ended with an industry-leading agreement that includes a progressive living wage for two years and a generous union-only bonus.”
Of the more than 1,110 Workers First members at Kmart, 96% voted to ratify the new collective agreement in a series of store-by-store meetings over the last three weeks. The agreement includes the new living wage of $28.95 per hour after six months’ service from September 2025, increasing to the living wage for 2026/27 the following year, union-only bonuses of $500 for full-time workers, $350 for part-time workers and $200 for casual workers, an improved pathway from casual to permanent employment, and an increase to safety and medical footwear reimbursements.
For Tarsh Sullivan, a coordinator from Kmart Te Rapa who was part of the bargaining team, the new agreement is a “huge win” for workers.
“The union-only bonus is a big deal for a lot of the younger workers because it shows them why we’re in a union and what you can do when you stick together,” said Ms Sullivan.
“We were also really happy to lock in a better pathway for casual workers to get into full-time employment, because you can get stuck there in retail jobs sometimes.”
“The future is unpredictable, especially under this Government. I’m happy that we’re making progress and moving forward with this deal – we know it’s not the same for all retail workers at the moment.”
“Our goal now is to keep recruiting new union members and building momentum for next time we bargain, because we can do even better.”
Rudd Hughes said the Kmart deal sent a clear message to other big-box retailers like Farmers, The Warehouse and Briscoes.
“Many of the other big retailers still don’t believe their staff are worth a living wage,” said Mr Hughes. “But Kmart has been thriving as a business because their staff are fairly paid and feel more motivated and valued by their employer.”
“We need to start measuring company success differently and move on from the ‘infinite growth’ mentality. We should be asking companies more about what their staff earn, not their CEO.”
PSA members have voted to strike in support of their bargaining with the Ministry of Education, which has stretched on now for nine months.
The staff represented by the PSA work on several programmes of work to support educators, ranging from education reform to managing emergency responses.
“The Ministry is threatening flexible working arrangements by removing explicit commitments in the collective to allow members to work in a way which suits their family circumstances, said Fleur Fitzsimons, National Secretary for the Public Service Association Te Pūkenga Here Tikanga Mahi.
“This is the thin end of the wedge, reflecting this government’s hostility to what are modern workplace practices around the world.
“PSA members are also upset by the Ministry’s miserly pay offer at a time when the cost of living is still putting pressure on household budgets.
“We don’t take this step lightly and will continue to press the Ministry to come back to the table with a fair offer,” Fitzsimons said.
There are a further 800 specialist education staff from the Ministry of Education represented by NZEI who have also voted to strike in support of their bargaining next week.
What: 1500 PSA members and 800 NZEI members to strike from 10am-12pm on 22 July in support of current bargaining between their respective union and the Ministry of Education.
Where: Various locations in Auckland, Hamilton, Napier, Lower Hutt, Wellington, Christchurch, and Dunedin – details below.
When: 10am – 12pm, 22 July 2025.
Who: PSA National Secretary Fleur Fitzsimons to speak at the Wellington PSA picket on corner of The Terrace and Bowen St, at 10:25am.
Picket details:
Whangārei, Walkout at 10am, picket in a line along Dent Street at Town Basin (near Hundertwasser).
Auckland Maungawhau, Walkout at 10am, picket in a line down Normanby Rd.
Auckland Henderson , Walkout at 10am, march down to Edmonton/Falls roundabout for picket.
Auckland Botany, Walkout at 10am, march up Bishop Dunn Pl to Te Irirangi Dr traffic lights for picket.
Tauranga (Western BOP), Walkout at 10am, picket at intersection of Elizabeth St and Cameron Rd.
Hamilton, Walkout at 10am, march down to the intersection of Home Straight and Te Rapa Rd by the lights for picket.
Napier, Walkout at 10am, picket on corner of Lever and Bridge St.
Lower Hutt, Walkout at 10am, march down to Chris Bishop MP office on Bloomfield St.
Wellington, Walkout at 10am, picket on corner of The Terrace and Bowen St from 10:25am.
Christchurch, Walkout at 10am, picket at Bridge of Remembrance.
Dunedin, Walkout at 10am, picket outside office on Moray Pl.
The Public Service Association Te Pūkenga Here Tikanga Mahiis Aotearoa New Zealand's largest trade union, representing and supporting 95,000 workers across central government, state-owned enterprises, local councils, health, and community groups.
Northlanders keen to vote in this year’s local elections – including a poll to keep or remove Māori constituency seats – must be enrolled by Friday 01 August to receive a standard voting pack. After this date, you’ll need to cast a special vote.
Meanwhile people keen to stand for council also have until Friday 01 August get their nominations in. Anyone aged 18 and over can stand for election provided they’re a New Zealand citizen, enrolled on the Parliamentary electoral roll and are nominated by two electors whose names appear on the electoral roll within the constituency the candidate is standing for.
Last chance for feedback on Navigation Safety Bylaw
Northlanders are being urged to have their say on Northland Regional Council’s Navigation Safety Bylaw, which sets the rules for keeping people safe on the water, by Monday 28 July.
After a first feedback period during May, this second opportunity provides more detail on the key proposals. The proposals include a new requirement to carry two forms of communication on a vessel; amending the requirements for wearing a lifejacket; and removing a clause prohibiting wind-powered board sports in the Ruakākā and Waipū estuaries.
