An economist says removing tax from fuel and basic foods to combat rising costs might not be the way to go.

The AA is warning petrol could hit $4 a litre, while Stats NZ figures show food prices in February were up 6.8 per cent from the same time last year.

ANZ chief economist Sharon Zollner told Mike Hosking simplicity is a hallmark of our tax system, but making it apply to some foods and not others gets you down a rabbit hole.

She says while fuel is expensive the tax from it is important.

“For some very important infrastructure projects, which I think everyone would agree need, although everyone, of course, disagrees on what the priority should be.”

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