Cost of living: ACT berates Government's 'irresponsible spending' that's hitting Kiwis' back pockets as food prices grow by 6.8 pct

New Zealand's rising food prices are a result of the Government's "irresponsible spending" and Kiwis are paying the price, National and ACT claim.

Earlier on Tuesday, Stats NZ's food price index for May showed food prices had grown year-on-year by 6.8 percent. The April figure was 6.6 percent year-on-year growth.

Broken down by categories, Stats NZ said grocery food prices increased year-on-year by 7.4 percent, restaurant meals by 6 percent, fruit and vegetables 10 percent, meat, poultry and fish 7 percent, and non-alcoholic beverages were up 2.7 percent.

ACT leader David Seymour hit out at the Government's "irresponsible spending", the ramifications of which he said are continuing to hit home and Kiwis are paying more at the checkout as a result.

"New Zealand is a food superpower. New Zealand farmers grow enough food for eight times our population. We shouldn't be in a position where we're paying through the teeth to put food on the table, and it's not the farmers and growers making any money," he said.

"The problem is the Government's war on businesses and relentless borrowing and spending has fuelled domestic inflation that has crept into our most productive sector. Inflation is too much money chasing after too few goods, and this Government has borrowed, printed and spent too much money."

Seymour said Prime Minister Jacinda Ardern and Finance Minister Grant Robertson are "focussed on the PR spin" around the cost of living and blaming the war in Ukraine, but everyday New Zealanders who are struggling to make ends meet are being forgotten.

"They deserve straight talk and common-sense solutions rather than disingenuous spin designed to distract from the mess they've created," Seymour said.

"It's time to stop wasteful spending that pumps money into the economy without producing goods and services to buy. Too much money chasing too few goods means inflation."

He said there needs to be real change, and ACT would cut the 30 percent income tax rate to 17.5 percent. They would also lower the barriers to employment and make it easier for small businesses to hire.

David Seymour.
David Seymour. Photo credit: Newshub.

National's finance spokesperson Nicola Willis said Kiwi families keep going backwards as food prices rise rapidly.

"These rapidly rising prices are part of the wider inflation tsunami hitting our economy, with hard-working Kiwis left swamped in its wake, as their wages rise slower than prices," she said.

"While Labour likes to put this all down to pricing decisions made by supermarkets, the truth is New Zealand's inflation problem is far more widespread."

Willis said restaurant prices are rising at their highest rate since 2009, with ready-to-eat food prices rising 6 percent in the year to date.

"Grant Robertson has no plan to tackle inflation. The Government has instead poured more fuel on the fire with more government spending, pushing up interest rates and worsening the cost of living crisis," she said.

"The Government should adopt National's five-point plan to fight inflation - refocus the Reserve Bank on price stability, stop adding unnecessary costs to businesses and employers, reduce the bottlenecks that are holding back growth, including addressing labour shortages, restore discipline to Government spending and inflation-adjust tax brackets to increase Kiwis' disposable incomes."

Russia's invasion of Ukraine has partly driven up food prices, but Willis said the Government can't use that as an excuse and instead they should "step up" and deliver a plan to fight inflation.

Nicola Willis.
Nicola Willis. Photo credit: Getty Images

The Green Party's spokesperson for commerce and consumer affairs Ricardo Menéndez March wants to see a "genuine and workable plan" to get more affordable food onto people's tables, particularly as inflation is not experienced equally.

"Those with the least experience it at a much higher rate than those with the most. Even before the current inflation spike, more than one in four children living in some of the country's worst-off families were going without fresh fruit and vegetables," he said.

"Around one in five kids also said they were living in households where food runs out. There are two very clear steps the Government can take to make it possible for every family to afford the food they need. Step one: immediately increase benefits to liveable levels. Step two: break up the supermarket duopoly."

Menéndez March said food is a basic human right, and for too long the supermarket duopoly has made huge profits at people's expense, while also not giving food growers and makers a fair deal.

"Farmers markets, community markets, and urban food gardens can also shorten the supply chain, reduce transport costs and emissions, and deserve more attention than National and ACT's failed trickle down economics."

Ricardo Menéndez March.
Ricardo Menéndez March. Photo credit: Facebook / Ricardo Menéndez March

Commerce and Consumer Affairs Minister David Clark said the Government is working to increase supermarket competition and Tuesday's figures from Stats NZ show why the supermarket industry needs to change.

"Supermarkets currently earn $1 million a day in excess profit, that's straight from the pockets of Kiwi consumers and we have a plan to bring more competition and choice for New Zealanders," he said.

Two weeks ago, the Government put supermarkets on notice and urged the duopoly to strike good-faith wholesale deals with their competitors.

Clark said in the time since that announcement, there's been good progress. Minister of Finance Grant Robertson met last week with Costco executives in Sydney to talk about its possible expansion into Wellington and Christchurch, and on Tuesday morning, Clark met with Night 'n Day - New Zealand's third-biggest grocery provider - where they discussed the Government's ongoing action to increase competition in the sector.

"Night 'n Day chain has 57 stores, but a lack of access to wholesale groceries has been a major barrier when it comes to market expansion," Clark said.

"I am reiterating my call on the supermarket duopoly to strike good-faith deals with their competitors to provide access to wholesale groceries, or regulatory measures will be put in place.

"The Government is not afraid to unlock the stockroom door to ensure a competitive market if the supermarkets don't get on and do it themselves quickly."

Clark said he aims to have a regulatory backstop finalised by the end of the year, but supermarkets would be well advised to organise their own agreements sooner.

"We're also moving fast on the mandatory code of conduct, a unit pricing scheme and the establishment of an industry watchdog to keep supermarkets in the spotlight," he added.