Opposition parties give government ‘failing’ grade on temporary fuel tax cuts

March 15, 2022 ‘Much more needs to be done,’ says National Party leader Chris Luxon as the Opposition gives the government a ‘failing’ grade on fuel cuts.

By Anneke Smith for RNZ

Opposition parties gave the government a “failing” grade for its temporary fuel tax cuts.

Fuel taxes have been reduced by 25 cents per liter for the next three months as the government acts to counter soaring gasoline prices.

National Party leader Christopher Luxon said the petrol tax changes would provide some relief, but would not solve the wider cost of living crisis.

“There is still a lot to do,” he told the media today.

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

He said Labor was responding to pressure from the public, the media and the opposition.

“I think the government is very responsive.”

Luxon said the Prime Minister had belatedly acknowledged that there was a cost of living crisis.

He said recent actions have characterized the government’s lack of a master plan and its sensitivity to pressure.

“We oppose the government and we come up with ideas,” Luxon added.

“I think we do our job quite well as the opposition.”

As to whether there was an energy crisis, Luxon did not answer directly, but blamed the government for broader cost-of-living issues.

“There’s $6 billion in additional new money that’s about to be spent in the May budget.”

Luxon said that of these new funds, a third could be earmarked for inflation-adjusted tax thresholds.
He said there would be another $4.3 billion left.

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.

National Party leader Christopher Luxon said people needed a break from the rising cost of living.  Photo/Mark Mitchell
National Party leader Christopher Luxon said people needed a break from the rising cost of living. Photo/Mark Mitchell

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

“The best way to do that is to adjust the tax thresholds; to give people back the extra tax that labor has taken on inflation so they have money in their pockets.”

Luxon estimated it could save the average worker $870 a week, while the ACT party said it could provide $187 per person through its “carbon tax rebate” policy.

ACT chief David Seymour said repayment would be taken care of through the emissions trading scheme and would come from what he called the “climate slush fund” of the government.

“We could have given $750 [each year] back to an average family of four. In order to achieve this kind of savings under the Labor regime, you would have to buy 3,000 liters a year.”

The Green Party has backed the halving of all public transport fares from April 1, but has also made it clear that it cannot accept fuel excise cuts.

Act leader David Seymour at his press conference after meeting protest representatives, Houses of Parliament, Wellington.  Photo/Mark Mitchell
Act leader David Seymour at his press conference after meeting protest representatives, Houses of Parliament, Wellington. Photo/Mark Mitchell

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

“If we had been able to provide support through the income support system or the tax system, people would have a choice on how to spend that money.

“If you’re just doing it through fuel taxes, it’s limited to that area.”

Shaw said the Green Party is also concerned that there is no guarantee that oil companies won’t simply absorb fuel tax cuts into their profits.

Green Party co-leader James Shaw said aid to direct payments would have been better than fuel excise cuts.  Photo/Mark Mitchell
Green Party co-leader James Shaw said aid to direct payments would have been better than fuel excise cuts. Photo/Mark Mitchell

Energy and Resources Minister Megan Woods has asked oil companies to share their seven-day moving average margins to monitor industry profits.

This disclosure was based on goodwill, but Woods said she spoke to several oil companies and they were supportive of passing every penny to customers.

“They all seemed to be very supportive of these changes. They can see from their gas station forecourts the impact this is having on Kiwis when they fill up their cars.”

Minister of Energy and Resources, Megan Woods.  Photo/Mark Mitchell
Minister of Energy and Resources, Megan Woods. Photo/Mark Mitchell

As the Ukrainian border dispute and the Covid-19 pandemic drag on, it’s unclear whether fuel prices will be worse, better or the same three months from now.

The government will review fuel excise cuts before they end and has promised that any downside will be phased in and only when fuel prices stabilize.

Comments are closed.