The government has extended half-price public transport fares and the 25c-a-litre cut to petrol excise tax – again.
Early last year, as fuel prices started to rise, the government cut the excise tax on fuel and introduced half-price fares on public transport to combat the rising cost of living.
The move was initially for three months but has since been extended three times.
Despite the government previously ruling out another extension under Jacinda Ardern’s leadership, Prime Minister Chris Hipkins, flanked by Minister of Finance Grant Robertson and Minister of Transport Michael Wood, announced the latest extension until June 30 – when the government’s new budget cycle starts – in Auckland.
It’s Hipkins’ first policy announcement after taking up the prime minister’s job a week ago and comes after a cabinet reshuffle.
The cut on fuel is estimated to reduce the price of a 60-litre tank of petrol by $17.25.
With that, half-price public transport was expected to save the average person who pays two $5 fares a day $25 a week.
Another announcement was that road user charge discounts will be reintroduced and continue until June 30.
There was also good news for the 1 million Community Service Card holders, including tertiary students, who heard that half-price public transport would be made permanent for them, from July 1.
All up, the cost of the extensions is estimated to be about $718 million.
Hipkins said this is a first step in dealing with some of the “persistent cost pressures” on businesses and families.
“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,” he said.
Robertson told media the government had found the money to fund the extension through the October baseline update.
“It is what we do every six months as a government. We go back through the money we have previously allocated and ask the question, do we still need this?”
“We did that exercise and found sufficient funding to be able to fund this extension,” he said.
Asked what had changed after previously ruling out the move, Robertson said the new prime minister had asked ministers to “redouble our efforts on the cost of living”.
“That money we were able to find through the baseline update is money that has already been indicated that could be used for a number of things.
“We have changed our decision, we aren’t denying that at all, but we’ve taken another look at the circumstances New Zealanders are in and we should do everything we can to help,” Robertson said.