Fuel tax cuts welcomed by politicians, Government urged to 'do more' to ease wider living-cost 'crisis'

Christopher Luxon told media today the petrol tax tweaks would provide some relief but did not address the wider cost of living crisis. Photo / Mark Mitchell

The Government's fuel tax relief and public transport package is being welcomed politically but all opposition parties agree much more needs to be done to address the "cost-of-living crisis".

National had been calling for removing the 10c a litre Auckland regional fuel tax. Yesterday's announcement went much further, slashing 25c off fuel taxes for a minimum of three months and costing the Government about $350 million.

But National Party leader Christopher Luxon said it was not only petrol prices increasing but food and rent.

Luxon told media today 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."

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.

He reiterated his party's call for wider tax relief, including adjusting the income tax threshold to account for inflation.

Act Party leader David Seymour said the 25c reduction was "a fraction" of what it could have done. Seymour had called for the Government to return carbon tax revenue, equating to a $749 payment in the next fiscal year to a family of four ($187 per person).

This would not affect other services, Seymour said. Act also released a plan to deal with rising costs back in December, which included cutting the middle-income tax rate and stripping back public service spending.

Green Party co-leader James Shaw said direct payments through the welfare system or tax credit would have been more effective than cutting the fuel tax, particularly for those on lower incomes.

"Everyone should have what they need to make ends meet. But right now, far too many are shouldering the burden of rising prices for the basics, especially those on the lowest incomes."

Shaw said the party welcomed halving public transport fares for the next three months, and longer-term would continue advocating a shift away from fossil fuel dependence.

Te Pāti Māori co-leader Debbie Ngarewa-Packer said it was good to see the Prime Minister acknowledge the "pain and crisis people are in".

However, Ngarewa-Packer said these problems had long existed and only intensified recently.

The increases to benefits from April 1 and winter energy payments had been announced as part of last year's Budget and so did not factor in the more recent, dramatic increases, including fuel prices driven by the Russian invasion of Ukraine.

Despite this, there had been no increase in support announced specifically for those on lower incomes.

"It is not just petrol, but food at the grocery store and rent to put a roof over our heads," Ngarewa-Packer said.

"Fuel is the last thing on the list creating real material hardship for our families."