Hipkins extends fuel tax cuts

The government has extended its 25 cent petrol tax cut until June 30 as new Prime Minister Chris Hipkins seeks to “take the edges off” the cost of living crisis.

The decision takes the policy, which was first introduced in March last year, beyond its previously extended deadline of March 31.

A discount for road-user charges (RUC) is also being re-introduced and will continue through until the end of June.

Hipkins announced the extension of the measures, along with continuing half price public transport fares, on February 1. The policy was originally put in place for three months but has been extended on a number of occasions.

"It's important we keep providing support to families and businesses who need it,” Hipkins said.

“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 measures is estimated to cost about $718 million. I believe this is the right thing to do for New Zealand families. We can strike a balance between targeted ongoing support and careful management of the government accounts.” 

Michael Wood, Minister of Transport, and Grant Robertson, Minister of Finance, were also at the announcement in Auckland.

Robertson said the government had found money during an October budgetary process, called the baseline update, to afford the extension to the subsidies. In December, he had said continuing the cost of living policy was “unsustainable”.