Land of expensive milk and honey

Photo / Martin Sykes

Feeling the pinch as you do the supermarket shopping this weekend?

You're not alone - New Zealanders really do pay more as a proportion of their incomes for everyday items than many others overseas.

A Weekend Herald survey of supermarket prices in four countries shows we pay much more for basic groceries than Britons and Americans.

Australia is slightly more expensive at the supermarket checkout, but when prices are compared with earnings, New Zealand comes up well short.

Information from Statistics New Zealand and the OECD shows a $100 basket of typical goods and services costs almost 13 per cent of the gross weekly wage here.

The same items cost just over 9 per cent of the weekly wage in Britain and Australia and 7.5 per cent in the United States.

The figures support comments made by visiting rugby writer Peter Bills, who last month attacked New Zealand's high prices as "one giant rip-off" for tourists and locals.

To test his claim, we asked an Auckland family of two adults and two teenagers to compile a cut-down weekly shopping list, and then calculated the cost of the items on it at online supermarkets in New Zealand, Australia, the United States and Britain.

The list of common food and cleaning items cost $138.77 here, compared to $116.15 in Britain and $122.52 in the United States.

Only Australia was more expensive, at $149.92.

Expensive items in New Zealand included milk ($4.59 for 2 litres, compared to $2.84 in the US) and laundry powder ($7.99 for a 1kg pack, compared to $3.44 in Australia).

Some prices could have been affected by specials and differences between brands, but New Zealand was consistently more expensive than Britain and the US overall.

Only three of the 27 items on the list were cheapest in this country.

Institute of Economic Research economist Shamubeel Eaqub said many everyday items did cost more in New Zealand, but not all prices were high.

The cost of going out to a restaurant or a movie was still much cheaper than in Britain. A cheap night out in New Zealand for $20 could easily cost £20 ($44) in London.

Mr Eaqub questioned whether it was realistic to compare our standard of living with Australia, Britain and the United States, as New Zealanders earned so much less than people in those countries.

He said it made more sense to compare our standard of living with countries with similar incomes, such as Greece, Israel and Slovenia.