A word from Joseph Mooney, Southland MP

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Cost-of-living crisis finally in frame

I often do the weekly food shopping in my family and it’s been really sobering to see how much food prices have risen, not to mention what it costs to put fuel in the car now.

The Government finally admitted what National has been saying for some time – New Zealand is facing a cost-of-living crisis.

The price of petrol has made headlines recently, but it seems wherever we turn these days whether it is at the supermarket or paying for other essentials, we are being hit hard in the pocket.

In the past four years food prices have gone up 13%, the average rent is up $140 and it is conceivable that the price of petrol could double.

Otago’s house prices are in New Zealand’s top bracket, sitting at an average of $810,000, undoubtedly led by the fiercely competitive Central Otago market.

Prices in the Queenstown-Central Lakes region jumped 23.5% in the last year.

As I am sure you are all well aware, wages have not moved at anywhere near that pace.

We are all affected in some way, but it is retirees and low to middle-income-earning families that bear the harshest brunt of these skyrocketing costs.

These figures are at the heart of why National has labelled New Zealand’s current economic situation a cost-of-living crisis.

They are also why my colleagues and I are taking the matter so seriously.

National’s plan to restructure income tax levels is the first part in a strategy to combat rising inflation and to bring the costs of everyday life back under control.

Inflation is running at an annual rate near 6%, a level not seen in three decades. I remember what it was like as a child the last time inflation was rampant in New Zealand. They were tough times for my family.

Our plan for taxation is to adjust the bottom three income tax thresholds to give New Zealanders some meaningful relief.

Inflation basically means that everything becomes more expensive and your dollar is effectively worth less.

One of the issues with higher inflation is that salaries and wages increase without helping people’s buying power, and you can end up being taxed higher rates without feeling any better off.

That is called tax bracket creep, and means individuals’ tax bills have jumped almost 6% since 2017.

The average wage in New Zealand is now taxed at 33%, and anyone on the minimum wage only has to work 44 hours a week to be hit with a marginal tax rate of 30 cents on the dollar.

With the Budget just a matter of weeks away there seems no better time to look for a new approach rather than continuing with record government spending, which adds to inflation.