Fuel tax cut extension announcement expected soon

New Zealanders can expect the Government to make an announcement regarding an extension to the fuel tax cut soon following calls to extend it as the cost of living crisis continues.

Transport Minister Michael Wood claims a decision is currently being made.

Earlier this year in March, the Government reduced fuel prices by 25 cents with an equivalent amount being taken from road user charges which was extended until January, 2023. It also halved public transport fares to try and combat rising costs.

Ministers will need to make a decision on whether or not the subsidy will be extended further by Christmas as a bill would need to be passed to do so.

According to NZ Herald, Wood says the extension is currently in the “Cabinet process” but decisions are still being made on whether it will be confirmed.

We can expect to hear a decision soon as the last Cabinet meeting of the year is next Monday before it goes on summer recess until February, 2023.

If passed, the news will be welcome to most Kiwis as well as the transport sector considering the Reserve Bank projects a 7.5 per cent rise in inflation come the new year.

Finance Minister Grant Robertson echoed Wood’s claims, saying a decision would be made “very shortly” in an interview with TVNZ’s Q+A programme last week.

However, the transport sector isn’t convinced an extension will be made to the transport support package.

“Most Kiwis don’t realise it, but if the Government doesn’t extend the package, it will end on 31st January,” says Nick Leggett, CEO of Ia Ara Aotearoa Transporting New Zealand.

“The cost to fill their car will increase $10 to $15 overnight, the cost of catching a bus or a train will double, and their road user charges will increase 36 per cent.” 

It will impact the prices of goods like food too as a 45 plus tonne truck and trailer traveling 100,000km would cost an additional $21,000 to operate if the fuel tax cut isn’t extended according to the transport body.