Half price public transport fares and cheaper petrol will now be available until the end of March 2023, the Government announced today.
The fuel excise discount will remain at 25 cents per litre until the end of February, and then will be at 12.5 cents through March.
It’ll cost an extra $116 million for the extension.
Minister of Finance Grant Robertson said this is about striking a balance between ongoing support and managing Government accounts, and that it isn’t sustainable to subsidise the costs for everyone.
“That’s why we are transitioning to more targeted support for those most feeling the pinch.”
Half-price public transport fares will remain permanent for Community Service Card holders, including tertiary students, from April.
“A challenging year lies ahead,” said Robertson.
It comes as Treasury delivers their half year economic and fiscal update which forecasts a turning point in our economic situation.
Inflation reached a high of 7.3% this year, but is forecast to drop from 2023.
Slow inflation fall
Treasury states, however, that inflation will be slow to fall away and interest rates will have to rise further to slow growth.
Treasury believes inflation will fall back to target levels of between 1 and 3 percent by 2025.
House prices too are set to fall another 15% by the end of 2024, before recovering and returning to the 2021 peak in 2026.
GDP will slow too throughout 2023 but is set to recover beyond 2024.
Unemployment will hit a high of 5.5% in 2024 before dropping again.
The Treasury’s Caralee Mcliesh acknowledged this year’s Fiscal update was set against a global slow down.
Despite this, the amount of money the government has to work with (operating balance, OBEGAL, and residual cash) is forecasted to be back in surplus from 2025 onwards.
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