A poll shows the cost of living crisis is the biggest thing on Kiwis' minds and is shaping up to be the key battle ground ahead of next year's election.
New Zealanders, like many people across the world, are dealing with rapidly rising costs for commodities such as food, petrol, energy and construction materials.
To combat the rapid spike in inflation the Reserve Bank has been raising interest rates, meaning many are also facing increasingly higher mortgage repayments.
Inflation in New Zealand rocketed from 1.5 percent in March 2021 to 7.3 percent in June of the next year.
The latest Consumer Price Index figures for the September quarter showed annual inflation increased by 7.2 percent - down just 0.1 percent from the June peak of 7.3 percent.
The RBNZ began lifting the OCR in October 2021 when it rose 25 basis points from 0.25 to 0.50. Since then, it has continued increasing until it reached 3.5 percent last month.
The poll, conducted by NZME and reported in the Weekend Herald, shows the cost of living crisis was the most important issue facing 56 percent of New Zealanders, ahead of climate change at 12 percent, crime at 11 percent and the COVID-19 pandemic at 8 percent.
Conducted in October the Dynata poll questioned 1000 respondents about what the most important issue facing New Zealand was right now.
While wage growth has improved in New Zealand - the private sector labour cost index rose at an annual rate of 3.8 percent and average hourly earnings increased by 7.4 percent in September year - and unemployment remains low, the cost of living crisis is starting to hit Kiwis in the pocket.
Trade Me warned earlier this week the crisis was threatening to become a Grinch this year and steal Christmas.
The annual Trade Me survey found 55 percent of people were planning to cut costs for the festive season.
"The two things they were cutting back on was travel and presents," Trade Me spokesperson Millie Silvester told Newshub.
"Kiwis are looking at ways to get more bang for their buck. We found that Kiwis are opting for more second-hand presents this year than they have in previous years," Silvester said.
While the Citizens Advice Bureau said increased costs in things like rent meant people were cutting back elsewhere.
"Rent is a huge factor in why people are struggling and that's why we see over 2000 people come to us in the last six months accessing foodbanks," Citizens Advice Bureau deputy chief executive Andrew Hubbard told Newshub.
"We're worried about the choices people are making… Because they're cutting costs on things most people see as essential," Hubbard said.
The Reserve Bank's second Financial Stability report for 2022, released on Wednesday, painted a grim picture warning a global economic slowdown threatens New Zealand's recovery.
The report also predicted consumer spending would slow as higher mortgage payment kicked in and falling house prices would see a decline in wealth.
The crisis is likely to be the issue most hotly fought over in next year's election, with both of the major parties already firing economic shots across each other's bows.
Prime Minister Jacinda Ardern said in an interview with Stuff on Friday the cost of living crisis will be Labour's number one focus ahead of the election.
"We’ve managed the largest health crisis and now the largest economic crisis we’ve had in decades," she told Stuff.
"Compare that to what we have from the National Party, which is tax cuts. Now, we've seen that policy prescription recently in the UK and the damage it did."
While National leader Christopher Luxon told AM last month 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."
