Government still failing on inflation as food prices skyrocket, Christopher Luxon says

Skyrocketing food prices are, in part at least, the result of the Government "letting inflation get entrenched in the economy", the National Party says.

Food inflation has hit a 13-year-high, with fresh produce costing 8 percent more than the same time last year, Statistics NZ data showed on Tuesday. 

Growers were putting the blame on rising diesel and fertiliser costs, and unfavourable weather conditions. 

But, speaking with AM on Wednesday, Opposition leader Christopher Luxon said the Government still wasn't doing enough to address inflation.

"The real challenge here is, the Government is actually letting inflation get really entrenched in the economy at the moment, and, the longer it goes on, the worse it gets for everyday Kiwis just trying to get through," he told host Bernadine Oliver-Kerby.

Luxon believed more needed to be done to get international workers into New Zealand and help ease critical worker shortages.

The National Party wanted Labour to ease immigration settings as well as "stop passing on costs to businesses", control Government spending, give people tax relief and allow the Reserve Bank to solely focus on inflation.

"Those are the five things we'd be doing - a proper, comprehensive economic plan to get to the root cause of what's causing domestic inflation," Luxon said.

"When you let inflation get into an economy it causes huge pain and suffering for people, and our challenge to the Government - and it has been now for seven-nine months - has been, look, you need to have a proper plan to manage inflation."

But, despite the call for the Government to cut back on spending, Luxon was still supporting a public holiday to remember Queen Elizabeth II - even though there were fears it would lump extra costs on suffering small businesses

"We supported the public holiday," said Luxon. "It's a one-off public holiday - it's an acknowledgement of a Sovereign and a Head of State that was in place for 70 years. I think it'd be tough to find any state in any country around the world not to take a day to acknowledge the passing of its Head of State."

Christopher Luxon.
Christopher Luxon. Photo credit: AM

The Government earlier this month hit out at the National Party, saying the Opposition should focus "on whether or not giving tax cuts to the wealthiest New Zealanders represents good policy". 

National wants to increase tax brackets to meet inflation and stop low-medium income earners from being trapped in higher brackets - which would see Luxon himself pocket an extra $18,000 in income tax reduction if he became Prime Minister

"I stand by the record of the Government in making sure that we got New Zealanders through COVID; that we have an unemployment rate of 3.3 percent, one of the lowest in our history; and we have one of the lowest levels of public debt in the world," Finance Minister Grant Robertson said in Parliament, under questioning by National's Nicola Willis.

"We are the ones who have stepped up to support low and middle-income earners," Robertson added.

Steps the Government has tried to take to support New Zealanders amid the cost of living crisis included the $350 cost of living payment, the delivery of which was widely criticised, as well as fuel tax cuts and half-price public transport fares until the start of next year.