Cuts to fuel tax, road user charges, and public transport fares will be extended to January 2023, as the cost of living continues to soar.
In March, the Government announced that it was cutting the fuel excise tax by 25 cents per litre, as well as making cuts to road user charges and public transport fares, in response to the cost of living pressures. It was announced yesterday that the cuts will be extended by more than five months, as Kiwis continue to struggle.
Finance Minister Grant Robertson said on Sunday that there's no easy fix to the cost of living, but the Government is taking action to ease the pressure on Kiwi families. He said the cut to the fuel excise tax could save motorists more than $11 for a 40-litre tank, and $17 for a 60-litre tank.
"In the case of today's announcement we know that the rising price of fuel has a direct effect on inflation, and making these changes is a targeted approach to a root cause of the cost of living pressure being faced by Kiwi households," he said.
READ MORE
Treasury estimates that the impacts of these cuts will reduce inflation by 0.05 percent in the June 2022 quarter.
Transport Minister Michael Wood said that since the half-price public transport fares were introduced on April 1, its usage has increased in Auckland, Wellington and Christchurch.
"We know this makes a real difference for people feeling cost of living pressures, particularly lower-income households," he said.
"Extending the reductions to fuel excise duty and road user charges will also help to reduce the fuel burden on the road transport sector, and in doing so keeping the cost of food and essential goods lower," he added.
Extending the cuts on fuel excise and road user charges until January is estimated to cost the Government $589 million. Extending the public transport price cuts will cost an estimated $63.1 million.