National Party leader Christopher Luxon. Photo: RNZ / Angus Dreaver
The National Party is criticising the government's level of spending, after the latest inflation figures yesterday.
The annual rate has barely dropped, and is now 7.2 percent.
National says widespread labour shortages and elevated government spending has lit a fire under inflation, and says fixing immigration settings and imposing fiscal discipline could address the problem.
National's leader Christopher Luxon told Morning Report spending on the Three Waters Reforms, consultants and communication staff and Auckland's light rail project was wasteful and low priority.
"We're spending a billion more each and every week, when you think we've added 14,000 more bureaucrats to Wellington and yet on the economy, on health, on housing, on crime and on education everything is going backwards, the outcomes are going backwards," Luxon said.
"Once you let inflation get into an economy it's really hard to deal with" - Christopher Luxon
The Labour government had failed to execute and deliver outcomes that justified the level of spending during their time in Parliament, he said.
Domestic inflation was one aspect of inflation the government could control but its approach to spending had contributed to the inflation's rising impact on interest rates, he said.
"Once you let inflation get into an economy it's really hard to deal with but you have to deal with it because otherwise you have less and less choices as time goes by."
National's actions to tackle inflation would include adjusting the tax threshold, cutting spending, and having the Reserve Bank focus 100 percent on controlling inflation, Luxon said.
"One is don't pass costs on to businesses that lead to higher prices. Two remove the bottlenecks in the productive economy that are constraining growth which is really around immigration settings.
"Three we have to really control that government spending... some of it's wasteful, some of it's low priority and we need to get more value from some of the other spending."
Luxon confirmed the National Party remained committed to cutting the top tax rate.
"The vast majority of what we're talking about in our tax package is inflation adjusting the tax brackets, that is the best most enduring way to deal with the cost of living crisis rather than a rinky dink bandaid cost of living payment going to dead people.
"The perverse thing is the government has also collected another $32 billion in tax because of inflation and so a prudent government like a Michael Cullen one or a Bill English one would actually say hey listen we can actually give people some tax return."
In its first term in government if elected, Luxon said the National Party would dismantle the tax increases Labour had put in place.
National would take a "pragmatic, prudent and responsible" approach to reducing spending when able to look at the government's books in closer detail if elected, he said.