Extended fuel Subsidy ‘a save’
‘Horrendous’ cost of fuel brings mixed reaction to Govt’s attempt to ease pain
Atrucking company that hauls logs throughout the Bay of Plenty says the decision to extend a 25 centa-litre subsidy on fuel is just a “Bandaid” solution to the cost of living crisis.
But another says the move will be “a save” from the “horrendous” cost of petrol.
On Sunday, the Government announced extra cost of living support by extending the existing 25c reduction to petrol excise duty, road user charges and half-price public transport until January 2023.
It expected the cut to fuel excise duty would reduce the cost of filling up a 40-litre tank of petrol by more than $11.
Meanwhile, the public transport discount would save someone taking two $5 rides a day $25 a week.
The move comes as the first temporary cost of living payment of $27 weekly, for people over 18 earning less than $70,000 who do not receive the Winter Energy Payment, comes into effect in two weeks.
Minister of Finance Grant Robertson said there was no easy fix to the increasing cost of living but the Government was taking actions to ease the pressure on families.
“We want Kiwis to have some certainty over the coming months in the face of volatile prices at the pump.
“We know that inflation is rising across the world, and cost of living pressures are making it tough for New
Zealand right now.”
Self Loader Logging company director Bryan Smith said while the extension was a positive move, it was a “Band-aid” to “help fix the mess” the Government created.
“It is an ambulance at the bottom of the cliff.
“Ideally they wouldn’t have let inflation get as out of control as it is. It is a stop-gap measure isn’t it? And they can’t let it go on forever.”
The Taupo¯-based logging haulage company operates across Rotorua, Tauranga and the wider Bay of Plenty.
Smith said fuel was a “significant” cost for the company.
In response, Minister of Transport Michael Wood said the Government recognised the road transport industry played a vital role in supplying food and other essential goods across the country.
The industry, like many New Zealand businesses, was feeling the impacts of high inflation, he said.
“That is why we are backing the industry through these challenging times.”
Inflation and fuel prices were
rising across the world, driven by the impact of the Russian invasion of Ukraine.
“This global problem has a local impact here on households and businesses in New Zealand.
“The extension of the 36 per cent road user charge reduction will reduce industry costs, and help goods continue to get to where they are needed.”
Addline Transport transport manager Andrew Gundry said the discount “will be a save for us, definitely”, but felt the Government was in a position where it had to extend it.
He said the cost of petrol was “horrendous” and the business could not absorb it.
“Fuel is a disaster for us. It goes before we see any value from it. Fuel goes in the tank, people go and do the jobs — it is another at least 30 days before we see any income from that.”
We want Kiwis to
have some certainty over the coming months.
Grant Robertson
The company, which has a fleet of 30 vehicles, provided bulk tipping and general cartage services to local builders, developers and roading contractors.
He anticipated the road user charge reduction would also save the company, which offers bulk tipping and general cartage services, “a little bit”.
Rotorua Business Chamber chief executive Bryce Heard said inflation was “running rampant and anything we can do to remediate that is positive”.
Heard believed transport industries had suffered huge increases, with diesel tripling in price within a couple of years.
“It appears diesel has become almost more expensive than petrol.”
A Transporting NZ survey showed 41 per cent of about 400 transport operators said the road user charge discount made a meaningful difference to their business costs.
More than 96 per cent of respondents supported its request to
the Government to indefinitely extend the discount.
Chief executive Nick Leggett said the Government’s latest move was “good news all around” and would provide relief for road transport operators “who are up against it with escalating costs and nowhere to turn”.
Extending the fuel excise and Road User Charges reductions until the end of January was estimated to cost $589m.
The cost to extend half-price public transport is an estimated $63.1m.