The Government today announced an extension of the petrol excise discount until the end of February, before it is phased out completely by the end of March.
Half price public transport will also be extended until the end of March, said Finance Minister, Grant Robertson.
“Many households are still struggling with the cost of living, which is why the Government is continuing to provide support for New Zealanders through the global economic uncertainty caused by COVID and the war in Ukraine,” Mr Robertson said.
“The fuel price and public transport discounts directly helped people struggling with cost of living pressures, while also helping to take the edge off inflation by about half a percent.”
Minister Robertson said it was simply not sustainable to continue to subsidise the cost of petrol indefinitely.
“We have to strike a balance between broad ongoing support and careful management of the Government accounts. That’s why we are transitioning to more targeted support for those most feeling the pinch,” he said.
“We have deliberately timed the full phase out of this support to coincide with lifts to support for families, students and seniors that will happen on the 1st of April.”
The petrol excise duty cut will remain at 25 cents per litre until the end of February, then the duty will increase 12.5 cents per litre until the end of March when it will be completely phased out.
Half price fares for public transport will be extended until the end of March, after which they will be made permanently half price for people with Community Service Cards.
Half price fares for the Total Mobility Scheme will also be made permanent from April 1 next year. This scheme provides subsidised taxi services for people who cannot use public transport because they have a disability.
The Road User Charges (RUC) discount will end on January 31 2023. RUC is not being extended because it is pre-purchased so RUC holders purchasing in December and January will be receiving the discount for some months afterwards. For example, buying 4,000km in January for $250 would last the average driver until June – longer than the petrol reductions.
“The impact of the global fuel price crisis has eased to some degree in New Zealand with the price of Dubai crude reducing. Since we brought in the 25 cent per litre cut, retail prices for regular 91 have dropped by about 76 cents per litre (including the excise cut). People are still feeling cost of living pressures though so we’re pleased we’re able to do a bit more to help motorists,” said Energy and Resources Minister, Megan Woods.
Transport Minister, Michael Wood said cutting excise duty and providing half price public transport had made a real difference to cost of living pressures.
“It is important to get the balance right though, as these policies are not without significant costs. We’ve got to make sure they are sustainable when that duty and fares help make up the funding we use to fix our roads and invest in public transport, cycling and walking infrastructure,” he said.
Minister Robertson said the extension of support through to the end of March was estimated to cost about $116 million, which would be paid for with savings made in other areas.
“As a Government we will have to make some tough decisions in the coming year as the global economy falters,” he said.
“New Zealanders should rest assured we are committed to supporting them while also continuing to take a careful and balanced approach to spending and debt.
“The cost of living remains the number one issue for New Zealanders and it is the number one priority for the Government. However fiscal conditions mean that our support for households needs to be targeted,” Mr Robertson said.