As I predicted earlier, removing the fuel tax and RUC cuts has proved too difficult for the Government to even contemplate. With Hipkins’s promise to focus on the cost of living, removing the fuel tax and excise was going to see prices at the pump rocket up by a reported 40–50c a litre. In an election year, that was going to be poison for the voters.
Prime Minister Chris Hipkins has extended the Government’s fuel tax cuts and half-price public transport offerings until at least June 30 – reversing an earlier decision to end them at the end of March.
Hipkins made the announcement while in Auckland, visiting flood-affected areas and meeting emergency response staff. At the same announcement, the Finance Minister said insurance companies have told him the floods would be New Zealand’s biggest insurance event not related to earthquakes.
It is the first cost of living announcement Hipkins has made since become Prime Minister, promising to overhaul Labour’s programme and focus more squarely on the “bread and butter” issues affecting New Zealanders.
He announced the 25 cents per litre excise cut would be extended to 30 June, as would road user charge discounts. Half-price public transport would also now continue until then – estimated to be saving someone who pays two $5 fares a day $25 a week. It is expected to cost an extra $718 million.
Half-price public transport would be permanent for about one million community service card holders, including students, from 1 July.
It is the fourth time Labour has extended the provisions which were first introduced in March 2022 and intended as a temporary respite from soaring fuel prices and wider inflation.
NZ Herald
Labour are stuck between a rock and a hard place when it comes to removing the cuts. The longer they go on the easier it is for voters to realise that the Government is doing just fine without the funds and for the Opposition to make the same call.
If they’ve gone without the taxes for a year then they really didn’t need to be that high now, did they?
Labour painted themselves into this corner, and they used their own paint and their own brush.
If they cancel the cuts at the end of June then they step straight into the election campaign proper with fuel price hikes. That’s not a vote-winner. So they are here to stay for the foreseeable future.
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