The Government has announced it will be extending reductions on fuel excise duty, road user charges and half price public transport fares for five months until the end of January 2023.
The cuts were first announced in March for three months, but the Government then extended the deadline to August 15, before the latest January 2023 extension on Sunday.
It comes ahead of the latest Consumer Price Index inflation numbers, which are due on Monday and expected to rise from 6.9%.
Reduced fuel excise duty, road user charges and half price public transport will remain in place until the end of January 2023. (Source: 1News)
Finance Minister Grant Robertson said the extension was to give Kiwis "certainty over the coming months in the face of volatile prices at the pump."
"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," Robertson said.
“That is why we moved in March to cut fuel excise tax by 25 cents a litre and road user charges by equivalent levels, along with halving public transport fares.
“At the time of the Budget we extended those reductions, and are now extending them again by more than five months until January 31."
At the announcement, Robertson said he thinks New Zealanders will welcome another five months of reductions.
However he added, "this can’t go on forever, work is being done on an exit strategy".
The January 2023 date was chosen as Robertson says oil and inflation is expected to come down in 2023 with wages expected to rise.
Transport Minister Michael Wood said this would also "reduce the fuel burden on the road transport sector, and in doing so keeping the cost of food and essential goods lower."
READ MORE: Petrol companies warned not to pocket excise profits
Treasury has estimated the scheme will reduce headline inflation by 0.5 percentage points in the June 2022 quarter.
Wood said since public transport fares were halved, public transport use has gone up in Auckland, Wellington and Christchurch.
“We know this makes a real difference for people feeling cost of living pressures, particularly lower income households."
The Transport Minister said the extension of half price public transport will mean the Community Connect scheme, due to kick in later this year, will now start on February 1 2023.
This programme would give Community Service Card holders access to public transport free of charge.
Cutting fuel excise and road user charges until the end of January will cost an estimated $589 million, and extending half price public transport will cost around $63.1 million.
The announcement drew criticism from ACT leader David Seymour who compared extending the cost of living measures to "kicking the can down the road."
SHARE ME