The Reserve Bank keeps inflation low because Parliament has decided that keeping inflation low contributes to helping the New Zealand economy to grow and helps to provide employment and development opportunities. Inflation is difficult for people on fixed incomes. If prices are rising but your income is fixed, as time passes you will be able to buy less and less. The purchasing power of your money has been eroded. This problem can be addressed if incomes are indexed or rise with inflation.
High inflation tends to be more variable and hence unpredictable.
This makes it difficult for business people to plan. People running a business find it hard to know what they will have to pay for raw materials, transport, and wages in the future. They may also find it difficult to decide what to charge for their products in the future. Inflation makes it difficult to see what a price increase really means. When one price rises and all others stay the same, this is sending a signal to the market.