- Fuel Excise Duty and Road User Charges cut to be extended for two months
- Half price public transport extended for a further two months
- New temporary cost of living payment for people earning up to $70,000 who are not eligible to receive the Winter Energy Payment
- Estimated 2.1 million New Zealanders eligible for approximately $27 per week per person. This will be paid in three monthly instalments from August 1
- 26,500 more insulation and heating retrofits for low-income homeowners
- Urgent Budget night legislation introduced to remove barriers to new retailers entering the grocery market, and help bring prices down
A Budget 2022 cost of living package will help New Zealanders through the peak of the global inflation storm, with an estimated 2.1 million people aged 18 and over eligible for an extra $27 per week over a three month period.
“We will extend the cut to fuel excise duty and road user charges, and also keep public transport at half-price for the next two months to provide further support in the face of high global oil prices.
“While that happens, Inland Revenue will set up a targeted cost of living payment,” Finance Minister Grant Robertson said.
The temporary cost of living payment is estimated to cost $814 million and the extension of the FED and RUC cut $235 million.
“Budget 2022 is being delivered against the backdrop of a global inflation spike, with existing supply chain pressures being exacerbated by pressure on oil prices from the war in Ukraine. This will pass but we need to protect New Zealanders from the immediate impact.
“This Budget package expands on the significant measures taken to date to support New Zealanders through the global inflation spike. We moved quickly in March reduce fuel prices. More relief came in April with increases to benefits, student allowances, Working for Families and Superannuation. The Winter Energy Payment also kicked in on May 1, with additional support for more than one million New Zealanders. But it is clear that a wider group of New Zealanders need targeted support.
“The Treasury suggests inflation will have more of an immediate impact on low and middle income households than on higher income households. That’s why this payment focuses on low and middle income earners who are not eligible for the Winter Energy Payment.
“The cost of living payment has been calculated as being half the amount of the Winter Energy Payment a couple would receive over the winter which is $350” Robertson said.
The payment equates to approximately $27 per week over August, September and October. It will be paid in monthly instalments beginning August 1. The payment will be the subject of Budget night legislation.
“The ongoing global energy crisis continues to impact on Kiwi households and businesses. Therefore, we’re extending our transport support package, including half price public transport fares, to help New Zealanders get where they need to go,” Transport Minister Michael Wood said.
“The package also provides support to the road transport sector, which plays a vital role in supplying food and other essential goods across the country.
“We’ve listened closely to the concerns of the sector and by extending reductions to fuel excise duty and road user charges, we are reducing the fuel burden on these organisations, and in doing so keeping the cost of food and essential goods lower,” Michael Wood said.
“Making it cheaper and easier to catch a bus or a train is also a critical part of our climate response. Through the Climate Emergency Response Fund we are funding the Community Connect scheme that provides permanent half price public transport for community service card holders starting from mid-September.
“That means about one million Kiwis will have access to cheaper transport which also helps us meet our climate change targets.” Climate Change Minister James Shaw said.
Warmer Kiwi Homes extension
The Warmer Kiwi Homes programme, which is part of the cooperation agreement with the Green Party, will now run for an extra year until the end of June 2024 to provide an extra 26,500 insulation and heating retrofits, helping to lower power bills for households.
The $73 million extension of the programme will ensure more low-income homeowners can access grants to cut energy bills and reduce emissions.
“Without adequate heating and insulation, we know that people are living in cold, damp, unhealthy homes. This extension will provide an extra 26,500 insulation and heating retrofits, helping tens of thousands of New Zealanders improve their health by heating homes properly, without increasing their power bill,” Energy Minister Megan Woods said.
“This funding extension provides certainty for service providers so they can plan for the future and continue to support jobs and the local economy. Funding this from our Climate Emergency Response Fund recognises that warm, dry and safe homes are important for families, important for the climate and important for the economy,” Shaw said.
Budget 2022 will also provide $16 million over four years to support the delivery of community-based renewable energy projects, expanding the existing Māori and Public Housing Renewable Energy Fund.
The projects will support access to secure, renewable and more affordable energy, with a focus on small-scale projects in low-income communities.
Response to supermarket study
The Government is also tackling the root causes of higher grocery bills by introducing urgent legislation to stop supermarkets from blocking competitors from accessing land to open new stores.
The Commerce Commission’s findings indicate that restrictive covenants over land are a major barrier to supermarkets accessing new sites, so we’re banning these covenants from being used to stop competition. Legislation will be introduced on Budget night to make this happen.
The Government is looking at how a Code of Conduct between major retailers and suppliers could be developed, and what role a dedicated regulator for the grocery sector could play.
A formal response to the Commerce Commission’s report is due out in the coming days.
Luxon: Labour taking New Zealand backwards
Budget 2022 confirms that New Zealand is going backwards under Labour faster than ever, Opposition Leader Christopher Luxon says.
“This is the Backwards Budget. Kiwis, the economy and outcomes are all going backwards under Labour and today’s forecasts confirm the situation is only going to get worse before it gets better.
“Labour’s spending addiction means the books are going backward. Not content with a $6 billion spending spree, they’ve also raided future budgets – spending $2 billion from Budget 2023 and $0.4 billion from Budget 2024. And that’s before you count climate spending and the cost of living band aid – which are on top.
They’re pushing out surpluses and shifting the goal posts to clear the way for more spending by lifting debt limits.
“With inflation at a 30-year-high and prices running laps around wages, Kiwis are experiencing the worst cost of living crisis in a generation. The forecasts today show inflation is rampant for years to come.
“More and more Kiwis are falling behind each week, squeezed by growing costs and a Government that refuses to offer them meaningful income tax relief while ramming through the biggest spend-up in New Zealand history.
“Labour’s cost of living package is a temporary band aid. The squeezed middle are paying the price for Labour’s economic mismanagement.
“And despite smashing the record for government spending, outcomes are going backwards. They’ve added more than 10,000 bureaucrats to the public service, yet outcomes are getting worse.
“Under Labour, wait times for surgery and specialist assessments have blown out, literacy and numeracy achievement rates have hit alarming lows and violent crime and gang numbers have exploded.
“New Zealand is going backwards, fast. We simply cannot afford this Labour Government.”
Seymour: The Brain Drain Budget
“Jacinda Ardern and the Labour Government have today presented New Zealand with the Brain Drain Budget. Ambitious New Zealanders, tired of being milked, will weigh up leaving for greener pastures,” says ACT Leader David Seymour.
“Last December Treasury forecast a population of 5.188 million in the next financial year, six months later it forecasts only 5.175 million people. Even Treasury is forecasting a brain drain expecting New Zealand’s population to be smaller today than it expected six months ago.
“Those who rely on working to pay rising bills needed hope, but it’s not in this budget. Why should people stay here to be milked harder? Why be milked for Labour’s ideological projects and wasteful mismanagement?
“John Key said Working for Families was Communism by Stealth, now they’ve broken cover. Labour’s big answer is to put more people into state dependency, giving those earning under $70,000 just under $30 a week which will only add to inflation.
“Meanwhile if you earn over $70,000 you’re left to swim against the tide of inflation.
“Under Labour, the gap between the median wage in New Zealand and Australia has grown $6600. People will put up with a lot if there’s a strategy to make it better, but there’s no strategy in this budget.
“The Budget needed to do three things. 1) Reel in spending to kill inflation dead. 2) Reduce taxes so hardworking families can deal with the price rises they face already, and 3) make strategic investments for housing supply, defence, and education.
“Sadly, the spending binge carries on. Taxes will now be $21,945 per person per year, up $6120 from $15,825 per year when Labour came to office. Taxpayers are being milked harder, and we have no strategy for the future. It is not a good advertisement for skills and investment to come to or stay in New Zealand.
“ACT’s Alternative Budget for Real Change showed how spending could be reduced by $6.8 billion a year without touching health, education, or any frontline service. Instead, we will see an increase in wasteful and inflationary spending.
“ACT’s Alternative Budget for Real Change showed how a nurse on $70,000 would be $2309 better off. Instead, someone like that will see no difference except ongoing inflation.
“High Government spending will hurt New Zealanders in another way. If the Government doesn’t sort inflation, the Reserve Bank will sort it for them. If the Government keeps spending, the Reserve Bank will dampen inflation by raising mortgage rates.
“In case anyone thinks renters are safe from mortgage rate increases, they just have to ask themselves, who will pay a landlords’ mortgage, if not the tenants? Government blow outs will mean higher interest rates, which mean rent increases. The money supply has to be dampened one way or another, and the Reserve Bank’s way will hurt everyone.
“The budget needed to put in place a clear plan to raise productivity. They have not done any such thing. Labour throws money around in ways that are not effective or efficient. That’s why we’re seeing countries such as the Czech Republic, Lithuania, and Slovenia becoming richer than us.
“ACT’s Alternative Budget for real change would simplify the tax system from six different tax rates down to two. Simpler taxes don’t just mean less bureaucracy, they send a message that we are committed to a future where we won’t fleece you for every extra effort. It’s about exorcising tall poppy syndrome from the New Zealand psyche.
“Instead, Labour has delivered a Brain Drain Budget. Tax the productive to fund Labour’s ideological fantasies, then just hope they don’t leave. Unfortunately, more and more will.”
Taxpayers’ Union: The worst budget since Muldoon
Grant Robertson is the first Minister of Finance since Muldoon to fail to deliver a budget suplus during a time of economic boom, says the Taxpayers’ Union, commenting from today’s Budget 2022 Beehive lockup.“With Government revenues booming, it is stunning that Grant Robertson has failed to deliver either tax relief or a surplus,” says Jordan Williams, the Executive Director of the New Zealand Taxpayers’ Union. “The spike to inflation has seen record revenue flooding into the Beehive due to workers paying higher income tax rates and more GST. But despite the inflation, the lowest unemployment since records began, the end of Covid lockdowns, and better than expected economic numbers, Grant Robertson has actually pushed back the return to surplus.” “It is stunning that, during a cost of living crisis, Grant Robertson has failed to give back any of his windfall gain to the workers who earned it. His failure to deliver either income tax relief or a balanced budget beggars belief: while households tighten belts, Wellington balloons.”“With Government revenues as strong as they are, the Finance Minister could have today announced both income tax relief and a surplus. Instead, he’s decided to feast on the revenue with a laundry list of spending commitments.” “The temporary $27-per week ‘cost of living’ payment is a cruel joke. Unlike genuine tax relief, it fails to improve productivity incentives. It’s just a three month handout, and an ineffective one at that. At current prices, it wouldn’t even buy two blocks of cheese!” “The only silver lining is pushing back by three months the hike to petrol taxes and Road User Charges. With inflation running at 6.9%, the hike to petrol taxes should have been squashed permanently”
