Christopher Luxon believes the Prime Minister is becoming "desperate" after her comments at Question Time in Parliament about National's tax cut policy.
Luxon and Jacinda Ardern clashed at a fiery Question Time on Tuesday with the National Party leader challenging the Prime Minister about high levels of inflation and the cost of living.
It comes after Statistics New Zealand revealed annual inflation eased slightly in September to 7.2 percent but defied many economists who predicted a more significant drop.
Ardern referenced National's tax-cut policies and the effect a similar plan had on the economy in the United Kingdom, which forced Prime Minister Liz Truss into an embarrassing U-turn after a week of market turmoil.
"We've seen a live experiment of what would happen when such proposals are implemented and Mr Speaker the impact on the economy is Mr Speaker very, very clear," Ardern said.
Ardern went on to say, "He [Luxon] has taken no reflection on what has happened in the UK when they implemented a very similar programme of debt-funded tax cuts."
When AM co-host Melissa Chan-Green asked how it felt being compared to Truss, Luxon said Ardern is becoming desperate.
"I think they are the words of a very, very desperate Prime Minister, to be brutally honest with you. Inflation is high and worse than expected at 7.2 percent, it's leading to higher prices," Luxon told AM.
"It's leading to higher interest rates. It's causing huge pain and suffering for New Zealanders up and down this country and it's all because this Government doesn't have a proper economic plan to lead New Zealand through a cost of living crisis."
Luxon told AM on Wednesday National's tax-cut policy is "completely and utterly different" to what Truss implemented in the UK.
"The bottom line is, the UK has very high levels of debt, it has uncapped amounts of stimulus and it had a wholesale change to its tax programme and agenda. That's a completely different situation from what's being proposed here," Luxon explained.
"We have a Government here in New Zealand that's spending $1b more each and every week. It's actually raising a huge amount of extra tax, almost the equivalent of $15,000 per household in New Zealand."
Luxon said if the Government was "responsible" they could help Kiwis through the cost of living crisis.
"This is a Government that actually could, if it was responsible, if it knew how to run an economy, deliver people some income tax relief," Luxon told AM.
"The best way to do that is not rinky-dink band-aid cost of living payments. It's to adopt our main thrust, which is to lift inflation-adjusted tax thresholds so people keep more of their own money to navigate the cost of living crisis."
The Government in recent months has taken a range of steps to tackle the cost of living crisis including extending cuts to fuel excise duty, road user charges and public transport until January amid skyrocketing prices.
"Inflation is continuing to be heavily influenced by global factors, with the Ukraine war and pandemic-related supply constraints affecting fuel and imported food and building material prices," Finance Minister Grant Robertson said on Tuesday.
"The Government will continue to carefully target spending in these highly uncertain times."
Robertson noted global inflation remained high. Australia's annual rate came in at 6.1 percent in its latest figures.
He said while domestic inflation was now likely down from its peak, it would likely remain high for some time.
Watch the full interview with Christopher Luxon above.
