Supporting New Zealanders with the rising cost of living
Budget 2022 is being delivered in a difficult time for many New Zealanders. The impacts of rising inflation, supply chain challenges, and pressure on oil prices from the Russian invasion of Ukraine are being felt at the petrol pump and at the supermarket. This pressure is particularly acute for low- and middle-income households.
The Government moved quickly in March to reduce the fuel excise duty by 25 cents a litre, with equivalent reductions in road user charges and funding of half-price public transport, all for three months. In light of the ongoing impact of high oil prices we are extending the cut in fuel excise duty and road user charges for a further two months.
In addition, as this across-the-board support ends, further targeted support is needed to help with the cost of living, without unnecessarily exacerbating inflation.
The Government is introducing a cost of living payment of $350 in three monthly instalments starting 1 August, to provide short-term support to low- and middle‑ income earners. This is the equivalent of around $27 per week for three months, and represents half the total couple rate of the Winter Energy Payment. The payment will be available to individuals who earned less than $70,000 per annum in the past tax year, and are not eligible to receive the Winter Energy Payment – approximately 2.1 million New Zealanders.
Additionally, we are responding to the rising cost of living by:
- continuing to support half-price public transport until August, as well as implementing an ongoing 50 percent concession for Community Services cardholders
- extending the Warmer Kiwi Homes programme until the end of June 2024, to ensure that more low-income homeowners can access grants to cut energy bills and reduce emissions
- providing funding to support renewable and affordable energy projects, with a focus on low‑income communities and those with insecure access to energy, and
- responding to the findings of the Commerce Commission's market study into the supermarket sector, including legislative changes that would remove barriers to new retailers entering the market.
This package of support comes on top of the package of income support measures that came into force on 1 April this year. This included a significant lift in main benefit rates, student allowances, and increases to the Family Tax Credit, childcare allowances and superannuation. On 1 May the 2022 Winter Energy Payment ($450 per individual and $700 per couple) began to be provided to Kiwis on income support and superannuation to help them meet additional costs across the winter months.