Opposition parties give Government ‘fail’ grade over temporary fuel tax cuts

By Anneke Smith for RNZ

Opposition parties have given the Government a “fail” grade over its temporary fuel tax cuts.

Fuel taxes have been slashed by 25 cents a litre for the next three months as the Government acts to counter soaring petrol prices.

National Party leader Christopher Luxon said the petrol tax tweaks would provide some relief but did not address the wider cost of living crisis.

“There’s a lot more to be done,” he told media today.

Luxon said a broader set of cost-of-living pressures were at play.

He said Labour was reacting to pressure from the public, the media, and the Opposition.

“I think the Government’s highly reactive.”

Luxon said the PM had belatedly acknowledged a cost-of-living crisis existed.

He said recent actions typified the Government’s lack of a master plan and susceptibility to pressure.

“We’re opposing the Government and we’re proposing ideas,” Luxon added.

“I think we’re doing our job pretty well as an Opposition.”

On whether an energy crisis existed, Luxon did not answer directly, but blamed the Government for broader cost-of-living problems.

“There’s six billion dollars of incremental new money that’s about to be spent in May’s budget.”

Luxon said of that new money, a third could be put to inflation-adjusted tax thresholds.
He said another $4.3 billion would be left over.

He said Finance Minister Grant Robertson was “addicted to spending”.

Luxon ruled out any changes to GST rates, saying changing the system would be too complicated.

“It’s not just fuel that’s gone up and petrol prices that are going up; food’s up 13 per cent and weekly rents are up $150 a week. People deserve a break.

“The best way we think to do that is adjusting the tax thresholds; returning the extra tax Labour’s grabbing from inflation back to people so they’ve got cash in their pockets.”

Luxon estimated this could save the average earner $870 a week, while the ACT Party has said it could deliver $187 per person through its “carbon tax refund” policy.

ACT leader David Seymour said the refund would be taken up through the Emissions Trading Scheme and come out of what he called the Government’s “climate slush fund”.

“We could have given $750 [each year] back to an average family of four. In order to make those sorts of savings under Labour’s scheme you’d have to buy 3000 litres a year.”

The Green Party supported the halving of all public transport fares from April 1 but had also made clear it could not get on board with fuel excise cuts.

Co-leader James Shaw said direct payment supports – through the welfare system or via tax credits – was a better, greener way to go.

“If we’d been able to provide some support either through the income support system or the tax system then people would have the choice about how to spend that money.

“If you only do it through fuel taxes then it’s confined to that domain.”

Shaw said the Green Party was also concerned there was no guarantee petrol companies would not just absorb the fuel tax cuts into their profits.

Minister of Energy and Resources Megan Woods has asked fuel businesses to share their rolling seven-day average fuel margins to monitor industry profits.

This disclosure was based on goodwill but Woods said she had spoken to several fuel companies and they were supportive of passing every cent on to customers.

“They all seemed very amenable to these changes. They can see on the forecourts of their petrol stations the impact this is having on Kiwis when they fill up their cars.”

As the conflict at Ukraine’s border and the Covid-19 pandemic wear on, it is unclear if fuel prices will be worse, better or the same in three months’ time.

The Government will review the fuel excise cuts before they end and has promised any drawbacks will be phased and only when fuel prices stabilise.

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