Did Nicola Willis promise to reduce food prices? Labour says so

Food prices have steadily been rising for at least the past decade. Figures from Stats NZ show the cost of food rose faster between 2021 and 2023 than at any other time over that period.

Some food groups, such as fruit and vegetables, fluctuate more dramatically than others, like grocery items (ie bread and potato chips).

Food prices today are 42% higher than they were 10 years and several Governments ago. Since 2016, a lot has happened that can affect food prices such as the Government’s response to the Covid-19 pandemic and geopolitical instability.

The dispute between politicians comes as the Government is under increasing pressure over the difference between reducing inflation and reducing prices.

Reducing inflation means prices will still rise but not by as much (as they would if inflation was not reduced).

Reducing prices means inflation goes into the negative and prices actually fall.

The Reserve Bank targets stable inflation of 1-3% but not negative inflation because that tends to be correlated with a sharp economic contraction.

With food prices high two years after the election and New Zealanders still grappling with the cost-of-living, Willis has come under attack from Labour, which insists National has not delivered on its cost-of-living promises.

Willis has fired back, arguing National’s position, before the election and today, was to reduce inflation rather than actually bring the cost of food down.

She told reporters at Parliament it was “very clear what I meant” was to bring food prices lower than would otherwise be the case.

“My point is, in the absence of changes, they would be higher.”

She means prices would still rise but just not by as much as before.

Inflation has fallen under National from an annual rate of 4.3% at the end of 2023 to 3.1%.

But a sticking point for Labour is that Willis has made several statements using variations of the terms “reduce food prices” or New Zealanders will “pay less” at the checkout.

At Parliament, Willis has defended her position noting that negative inflation (meaning prices would reduce overall) typically only happened during periods of serious economic contraction and no Government, including one led by the Opposition, would want that because of the harm it would do to the economy.

“If you look back over the history of inflation across the economy and food price inflation ... there have only been two [instances] in the last more than 50 years in which generalised food prices across the economy have fallen on average,” she said.

“I haven’t seen the Opposition promoting negative inflation. I know that would lead to massive job losses in our economy so the point that we have made, and the Prime Minister have made, is that stable inflation is the goal and keeping it low is the goal, and also ensuring grocery competition is the goal.”

As the Finance Minister continued to defend her position in the debating chamber, Hipkins interjected, noting Willis had not always been consistent in just promising lower inflation and that in many of her press releases she had also promised lower food prices overall.

Hipkins had come to the House armed with a list of said press releases and transcripts, dating back to June 2023 when Willis was finance spokesperson for the Opposition and had used variations of the “reduce food prices” statements or implications.

These statements included lines such as, “National is committed to unshackling the rural economy by scrapping 19 broken regulations, which will reduce costs on farmers, ensuring agriculture can grow and that Kiwis pay less for home-grown food at the checkout” and “the purpose of this briefing is to update you on the Government’s next steps to increase grocery competition and reduce food prices for Kiwis”.

Hipkins took great pleasure in reading through the dates of the press releases while his side of the House erupted in laughter.

Willis, of course, was not laughing. Speaking to reporters outside the House, she described Hipkins’ behaviour as “unbecoming of a leader” and that he had misled the House when he included one of her social media videos among his evidence when in that particular video she had not referred to lowering food prices.

“Rather than doing the right thing, apologising ... he chose to obfuscate and be cute,” she said.

Willis said the context of some of her PR statements were the supermarket reforms including changes to the Commerce Act to address competition issues in the grocery market.

In a letter seen by the Herald, she had also written to Hipkins asking him to correct that statement and apologise.

But, in a statement to the Herald, Hipkins said the only apology that needed to be made was from Willis and Christopher Luxon for “promising to fix the cost of living, when they’ve instead made it worse”.

Julia Gabel is a Wellington-based political reporter. She joined the Herald in 2020 and has most recently focused on data journalism.