NZ Election 2020: Labour promises investigation into food and building supply prices if re-elected

Jacinda Ardern announced the market studies on Thursday.
Jacinda Ardern announced the market studies on Thursday. Photo credit: File

Jacinda Ardern has promised an investigation into the price of groceries and building supplies if Labour is re-elected on October 17. 

Ardern announced the market studies on Thursday, which she says will ensure Kiwis are paying a fair price as the economy recovers from COVID-19. 

"Groceries are one of our most regular expenses, and buying or renovating a home is the biggest investment many of us will make in our lifetime, so we want to make sure pricing is fair," she said. 

"While we focus on keeping people in jobs, and retraining and upskilling to get our economy moving, we want to ensure the cost of living in New Zealand is fair and these market studies have the potential to help, by providing us the information we need to act."

Commerce and Consumer Affairs spokesperson Kris Faafoi said the investigations will look into whether New Zealand is becoming less affordable. 

"Over the past decade the costs of goods and services have gone up and there is a growing belief that New Zealand is becoming less affordable with Kiwis contrasting costs in Australia versus New Zealand," Faafoi said. 

"Housing also plays a vital role in the wellbeing of New Zealanders. Good housing underpins a range of social, economic and health outcomes and we need to ensure that Kiwis have access to affordable and fairly priced housing and building supplies." 

He said the study will allow Labour to "put in place any necessary regulatory and policy solutions that ensure consumers are paying a fair price". 

Ardern pointed to the Government's previous investigation into the country's fuel prices as an example. 

The Commerce Commission study found that New Zealand's fuel market is "not as competitive as it could be". 

As a result, a Bill aimed at improving transparency and boosting competition in the wholesale fuel market was announced. It passed its final reading in Parliament in August. 

The Bill forces the three largest companies, Exxon Mobil, BP and Z, to publicly advertise the wholesale price of the fuel. It also establishes rules that mean contracts between wholesale fuel suppliers and wholesale customers are fair. 

"In government, we initiated a successful market study for fuel that led to swift action to address competition and pricing to help lower prices for consumers," Ardern said on Thursday. 

The COVID-19 pandemic has exacerbated concerns over the cost of food with prices soaring for several seasonal items. 

The cost of courgettes hit record highs in June, up 74 percent compared to May, at $21.42 per kilogram, according to the Statistics New Zealand food price index. Lettuce prices were up 53.1 percent and tomato prices were up 27 percent - a rise of 48 percent year-on-year.

Annually, food prices rose by 4.1 percent from June 2019 to June 2020. Annual fruit and vegetable prices increased 10 percent, meat, poultry and fish prices increased by 3.9 percent and grocery food prices increased by 3 percent over the year. Restaurant meals and ready-to-eat food prices increased 3.5 percent and prices of non-alcoholic drinks increased by 1.4 percent.

And house prices aren't much better with the average house price in Auckland in September hitting $1,013,632, according to figures from Quotable Value. 

House values are now 85.5 percent higher than the previous peak of 2007, before the global financial crisis. Auckland prices have increased 6.1 percent over the past three months and 15.9 percent year-on-year.

The rest of the country is seeing similar growth with figures released by REINZ in June showing the nationwide median house price grew by 9.2 percent over the last 12 months to $639,000.