What’s in it for you as living
$350 cash payment for those who earnt less than $70,000
People on low incomes are set to get a $350 payment as part of a $1 billion cost of living Budget package that also extends fuel tax cuts and half-price public transport for a further two months.
Finance Minister Grant Robertson has also taken the first step to address the lack of competition in the supermarket sector, with urgent legislation going in last night to ban the use of covenants which make it hard for new players entering the market.
The cost of living measures in the Budget are mainly temporary and targeted at those on lower incomes.
The new cost of living payment will total $350 and be paid monthly for three months, for those who earned less than $70,000 in the last year — about 2.1 million people.
It will not be available for those who get the Winter Warmer payments, such as pensioners and beneficiaries. It is expected to cost $814 million.
Half-price public transport will also now be permanent for the one million people who have community services cards.
Robertson defended the decision to target it at those on low incomes, saying targeted and short-term relief would help those hardest hit by inflation without running the risk of making inflation worse — which tax cuts would have done.
He said it was also affecting middle New Zealand and the extension of the fuel tax cuts and half-price public transport was targeted at them.
Robertson said inflation was affecting low- and low- to middle-income people the hardest — and 81 per cent of workers were now getting either the winter energy payment or the new cost of living payment.
Extending fuel tax cuts and halfprice public transport to the end of August will cost $235m more. Robertson said the measures would help people get through the peak of the “inflation storm” and oil price spikes.
Forecasts showed inflation would peak in the middle of the year and then ease back in 2023 before dropping back to around 3 per cent in the following years.
Asked what would happen if inflation stayed high for longer than the support packages are in place, Robertson said they would continue to monitor the situation and had learned to be adaptable.
The Government has also leaned on its existing programmes to extend more assistance, including expanding insulation and heating retrofits.
Other measures of support for those on lower incomes include increasing dental care grants from $300 to $1000.
The grants were previously only for emergency treatment, but Social Development Minister Carmel
Sepuloni said that had changed.
Other measures in the Budget include more help for first-home buyers including lifting the caps to qualify for a First Home Grant, and removing the cap to qualify for a First Home Loan. The caps would also be reviewed every six months.
Housing Minister Megan Woods said it would open up more choices for first-home buyers and could help
thousands more get a home. There was funding for 7000 extra firsthome grants and 2500 more firsthome loans each year.
Robertson said further action on supermarkets would be announced.
The Government is looking at a code of conduct between retailers and suppliers and its formal response to the Commerce Commission’s report was due in coming days.