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Budget extends fuel tax cuts

Government says providing motorists with two more months of relief at the pumps will cost $235m.
Posted on 20 May, 2022
Budget extends fuel tax cuts

The government has extended cuts in petrol tax and road user charges (RUC) for another two months as part of the 2022 budget announced by Grant Robertson, Minister of Finance.

With the price of petrol increasing in the wake of the Russia-Ukraine conflict, the relief for motorists was first announced in mid-March and set down for three months.

It slashed fuel excise by 25c a litre and RUC by 36 per cent across all rates, and those measures will now remain in force for an extra two months following Robertson’s May 19 announcement.

Half-price public transport fares will also be extended for the same length of time under the budget and the move will be made permanent for community service card holders from mid-September.

Robertson, pictured, says the extensions to the petrol tax and RUC cuts will cost the government an extra $235 million.

The pledge was part of a range of measures in the budget to address the increasing cost of living facing New Zealanders.

Allocations to the climate emergency response fund, which were announced on May 16, are also included in the budget.

These include $569m for the clean car upgrade, which aims to get lower and middle-income families out of older cars and into low-emissions vehicles, $350m to fund transport choices and services, and $20m for a vehicle social-leasing scheme.

The biggest investment in this year’s budget is for health, with $1.8 billion going towards the Health New Zealand organisation that will take over the country’s 20 district health boards. In year two the entity will receive another $1.3b in additional funding.

Overall the budget forecasts the government will spend $127.1b in the year to the end of June 2023 and run a deficit, before gains and losses, of $6.6b. It is forecasting it will not get back into surplus until the 2024-25 financial year.