You're not wrong. I worked there for a few years and it is difficult for the average Kiwi to get ahead.There is litte discretionary spending money left after the tax man and the basic costs of living are satisfied. The up side is that it's a great place to live as you saw.
The top tax bracket kicks in at $70,000 and is 38%.
If you earn $100k like I did you'l pay about 28k in taxes from your salary.
I paid about $1000 pa in taxes on petrol.
About $7000 pa on GST
About $1000 on ACC.
So all up I paid about $37000 in tax I reckon, leaves you with $63,000 to play with, rent was about $15000 and food and utilities about $13000. That leaves about $35,000 pa or $670 a week to buy clothes and go away for holidays and put petrol in the car etc etc etc ie to live on. Thats about $500 USD a week discretionary, and as you saw, that gets eaten up pretty quick.
I found that I couldn't save and live the lifestyle I wanted at the same time so I left. Tough choice though as it is a great place to live.
Why it's so expensive I'm not sure. I know that they spend over 25% of their GDP on welfare but I don't know how that would drive prices up, seems to me it would just reduce productivity of the place.