Cost of living: National, ACT continue push for tax relief as food prices jump again

As food prices continue to rise, National and ACT both say the Government isn't doing enough to combat cost of living pressures and should bring about tax relief.

StatsNZ revealed on Thursday that food prices have risen 6.4 percent in the year to April, with increases across all of its monitored categories, including fruit and vegetables (up 9.4 percent) and meat, poultry and fish (up 8.4).

It's down slightly on the March figures - when the initial pain of increased fuel prices due to the war in Ukraine was being felt - but both right-wing parties say the Government has a lot to answer for. 

"Kiwi families are being squeezed from every direction. A meal of meat and vege is getting more expensive by the month," said ACT's David Seymour. "This is a direct response to Labour's relentless borrowing and spending."

National's deputy leader and finance spokesperson Nicola Willis said wage growth isn't keeping up with the rapid rise in food prices. 

"The cost of living crisis is deepening and Kiwis are falling further behind," Willis said. "These increases are eating a permanent hole in family budgets.

"Grant Robertson claimed this morning inflation is a short term challenge, but Kiwis will be experiencing the pain of this Government’s economy mismanagement for years to come."

Overall annual inflation came in at 6.9 percent in the year to March, the biggest jump since 1990. 

Both parties want to see tax relief for New Zealanders - albeit in different ways. ACT is proposing creating a two-tier tax system, with a new high tax rate of 28 percent, while National wants tax thresholds to be adjusted to inflation.

Robertson, the Finance Minister, however, has rejected the idea that government spending is fuelling inflation. He's consistently pointed to global factors like the war in Ukraine and supply chain issues.

On Thursday morning, at a pre-Budget speech, Robertson said not spending money investing in the health system wouldn't simply result in lower petrol prices. 

"We would just have both high petrol prices and a health system that was not set up to meet our needs," he said. 

"Too often, the New Zealand economy has been run along those lines. Investment has been turned on and off in response to short term considerations, resulting in a long series of chain reactions delaying planning decisions, business case development, workforce recruitment and investment in sector capacity."

He told Newshub that he believes the Government has a "very carefully balanced spending programme".

"We strive every day to make sure we are getting value for money for New Zealanders. The investments that we have made over recent years has meant our economy has rebounded back well and we have got through COVID better than most other countries."

He wouldn't comment on whether anything will be announced in next week's Budget to address cost of living - the two core focuses will be health and climate - but said the Government has already taken action to support low and middle-income families.

The fuel excise duty was slashed earlier this year while public transport fares were halved. A suite of increases to the minimum wage, benefits and tax credits also came into effect from the start of April.