Monday, July 15, 2024

New PM spreads $718m in ‘bread and butter’ cost-of-living support

The Government has today announced a range of cost-of-living support measures, delivering on new Prime Minister Chris Hipkins’ pledge to focus on “bread and butter” issues facing Kiwis families and businesses.

“I’ve said bread and butter issues like the cost of living would be my top priority,” Prime Minister Hipkins said.

“This is our first step in dealing with some of the persistent cost pressures on businesses and families.”

Mr Hipkins said New Zealand’s 25 cents per litre petrol excise duty cut would be extended to 30 June – reducing the cost of filling an average 60-litre petrol tank by around $17.

Half-price public transport fares will also continue through to June, while discounted fares for around one million Community Service Card holders, including tertiary students, will be made permanent from 1 July this year.

“Reducing the cost of fuel excise and public transport is a good candidate for early action – it’s a major cost for nearly everyone, we know how to do it, and can roll it out quickly,” the Prime Minister said.

“It is a small and meaningful first step in an ongoing series of measures to help with some of the persistent cost pressures on businesses and families.

“We can deliver to under pressure businesses and families fast. Transport is the third biggest expense on households after housing and food, so this is a policy that makes a real difference right now.”

Mr Hipkins said flooding in Auckland and Northland were putting extra stress and financial pressure on families.

“Cutting fuel excise and keeping half price public transport gives some extra relief as Auckland goes through a difficult period,” he said.

“New Zealanders understand we’re facing international pressures that are driving up inflation and prices. This policy won’t solve the crisis, but it will make a difference. I know that every bit helps.”

Finance Minister, Grant Robertson said the Government has also decided to revisit its decision on the transport support package, with the Road User Charge discount to be reintroduced and continue until the end of June.

“We know that increases in the price of food is hitting families hard. A significant component of those costs come from fuel. Extending the cut to fuel excise and Road User Charges will have a meaningful impact through reducing these costs,” said Mr Robertson.

“It is also a good policy for business. The cost of freight and running car fleets is a big cost for many businesses, so this extension helps relieve a bit of pressure on those doing it tough right now.

“This policy is also a practical way to help take the edge off inflation. The Treasury estimated the combined impacts of this policy reduced headline inflation by 0.5 percentage points in the June 2022 quarter. So it is a good policy to fight inflation while also helping the hip pocket now.

“The cut to fuel excise reduces the cost of filling up a 40 litre tank of petrol by around $11.50, and for a 60 litre tank, around $17.25 and half price public transport will save an average person who pays two $5 fares a day $25 a week.”

The extension of all of the measures announced today is expected to cost about $718 million.

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