The road transport industry is calling on the Government to extend the reduction in fuel excise and road user charges (RUC) indefinitely as prices at the pump skyrocket.
Extending reductions to fuel excise duty and road user charges for a further two months to August were included in the recent Budget announcement.
It followed the 25-cent a litre fuel tax and road user charge cut first announced in March. Extending the policy for another two months will cost $235m. That is alongside another two-month extension to the half-price public transport scheme at a cost of $132m.
With prices for fuel climbing back to $3 per litre or more across New Zealand, the pressure is coming on the Government to continue the policy beyond August.
Prime minister Jacinda Ardern, speaking on the AM Show on Monday, could not confirm if the fuel tax cut would extend beyond August when questioned about it.
Ardern pointed to “a number of really difficult” factors putting strain on the economy such as the Russia-Ukraine war.
“We have said we will keep looking at the circumstances … but it’s too early to say right now,” Arden said.
She also pointed out that the cost of living package is soon to come in which includes a temporary $27 a week payment for New Zealanders earning up to $70,000 a year.
‘Intense cost pressures’
However, Transporting NZ chief executive Nick Leggett says extending the reduction “is vital in order not to increase the pressure on hardworking families and struggling businesses”.
“Many K’Iniwis are only just keeping their heads above water at the moment and we need the Government to do what it can to help them through.
“The industry, which helped carry New Zealand through COVID-19, is coming under intense cost pressures, meaning that any increase in freight transport costs will have to be passed on through the supply chain to the consumer at the supermarket check-out.
“The 36% discount in RUC announced and then extended earlier in the year was welcome. However, fuel prices are even higher now and despite rosy talk from the Government, these higher prices are likely to continue for some time.
“The reality is that half the Government’s $27 per week cost of living payment will be wiped out immediately if people are having to pay an additional 25 cents per litre on fuel.
“Removing the RUC reduction to the trucking industry would also raise the cost of everything we buy in the shops, easily wiping out the other half.
“The Government has a simple decision to make here,” Leggett says. “Return fuel taxes to their original excessive levels, or commit to providing Kiwis longer-term relief from this cost-of-living crisis.”
