SIGN UP for our newsletter ✉️ :

Get the latest stories delivered straight to you

NZ hikes welfare payments as fruit and veg prices soar

The New Zealand government has bumped up welfare payments and government support as food prices soar.

New data released by Stats NZ on Monday showed the cost of fruit and vegetables grew by 23 per cent in the past year - the largest single-year jump in 34 years.

Grocery food prices were also up 12 per cent, led by increasing prices for eggs, potato chips and cheddar cheese, Stats NZ said.

The rising prices come as New Zealand endures an economy-wide inflation challenge in the wake of COVID-19, exacerbated by wet weather and, most recently, huge storms.

"Vegetable growers have endured exceptionally bad growing weather for several months now," Vegetables NZ chair John Murphy said.

"Months of wet, humid and unpredictable weather have affected growers' ability to plant and harvest.

"Most graphic have been the pictures of onions in drains in Pukekohe and on beaches and in drains in Hawkes Bay, plus the news that up to 90 per cent of Northland's kumara (sweet potato) production has been wiped out by Cyclone Gabrielle."

In response, the government has opted for a higher-than-usual annual rise in government payments.

In recent years, benefits have been indexed to the average wage rise, but Prime Minister Chris Hipkins said on Monday the government would lift payments by 7.22 per cent this year in line with headline inflation.

"The package of bread and butter support we are announcing today will help people who are really feeling the bite from the rise in the cost of living," he said.

More than 1.4 million New Zealanders including jobseekers, pensioners, parents and students will benefit from the rise to take effect on April 1.

With inflation and the rising cost of living the top issue for New Zealanders, Mr Hipkins has promised a government focused on "bread and butter" issues.

In the past month alone, several crops affected by Cyclone Gabrielle have soared in price - broccoli was up 34 per cent, lettuce up 24 per cent and oranges up 13 per cent.

Tomatoes cost more than double what they did a year ago, with avocado and pumpkin costing at least 50 per cent more.

The price of eggs has shot up by 11 per cent from January to February - they now cost 47 per cent more than they did in February last year.

Opposition finance spokeswoman Nicola Willis said food price growth was fuelled by more than "international factors".

"New farming regulations, worker shortages and additional business costs are all showing up in the prices Kiwis now have to pay at the supermarket," she said.