Petrol excise duty cut extended

The petrol excise duty cut of 25 cents has been extended to February 28 then will be phased out by March 31, 2023.

A short extension has been expected by many EV dealers who anticipate increased enquiries and sales nearer the end of the period.

Half price public transport fares have been extended to the end of March 2023 and will be made permanent for about a million Community Service Card holders (including tertiary students) from April 1 next year, plus Total Mobility Scheme members using subsidised taxi services.

The Government says the extensions are timed to link up with significant lifts on April 1 to the Family Tax Credit, superannuation, benefits, student allowances and increased childcare support.

“Many households are still struggling with the cost of living, which is why the Government is continuing to provide support for New Zealanders through the global economic uncertainty caused by COVID and the war in Ukraine,” says finance minister Grant Robertson.

“The Government has invested over $1 billion over the past year to reduce fuel prices. However, it is not sustainable to continue to subsidise the cost of petrol indefinitely for everyone,” he says.

“We have to strike a balance between broad ongoing support and careful management of the Government accounts. That’s why we are transitioning to more targeted support for those most feeling the pinch.”

The petrol excise duty cut will remain at 25 cents per litre until the end of February, then the duty will increase 12.5 cents per litre until the end of March when it will be completely phased out.

The road user charges (RUC) discount will end on January 31 as intended.

Transport minister Michael Wood says cutting excise duty and providing half price public transport has made a real difference to people feeling cost of living pressures.

“It is important to get the balance right though, as these policies are not without significant costs. We’ve got to make sure they are sustainable when that duty and fares help make up the funding we use to fix our roads and invest in public transport, cycling and walking infrastructure,” he explains.

“The Government has topped up the National Land Transport Fund to reflect the revenue shortfall so far.  The top-up to the end of November this year was $805 million and it is estimated it will total up to $1.3 billion by the end of January 2023.”

Robertson estimates the extension of support through to the end of March could cost about $116 million, saying it’s paid for through savings made in other areas.