The Government will provide $50 a week temporarily to thousands of working families, as rising fuel prices linked to conflict in the Middle East continue to put pressure on household budgets.
However opposition MP’s say it’s leaving too many behind and fails to meet the needs of all New Zealanders.
Finance minister, Nicola Willis, announced the support package on Tuesday, confirming around 143,000 low-to-middle-income working families with children will receive the increase through the in-work tax credit, part of the Working for Families scheme.
An additional 14,000 families will also become eligible for the payment at a reduced rate.
Willis said the policy was designed to target families in the “squeezed middle” who are in paid work but not eligible for main benefits.
“These are parents who are working hard, have modest incomes, and are supporting children. We know they will be hit particularly hard by the global fuel-price shock,” she said.
The payments are set to begin from 7 April for those paid weekly, and 14 April for those paid fortnightly, with most recipients not needing to take any action.
The income threshold was around $89,000 of annual household income for a family with one child, $112,000 for a family with two children and $135,000 for a family with three children.
The top up will last for up to one year, or until the price of 91 octane petrol drops below $3 per litre for four consecutive weeks.
The Government estimates the policy will cost up to $373 million if it runs for the full year, with funding already accounted for in this year’s Budget operating allowance.
Willis said the support had been carefully designed to avoid adding pressure to inflation or increasing government debt.
“We are very aware that almost all Kiwi families are feeling price pressures, but large, untargeted spending could make things worse,” she said.
“We’re focused on delivering timely, targeted relief while continuing to manage the public finances responsibly.”
The package excludes beneficiaries, superannuitants, and households without children.
Opposition not impressed ‘Leaves too many behind’
The Labour Party says the package leaves the majority of New Zealanders still facing higher fuel costs without any additional support.
“More people will miss out from today’s announcement than will benefit from it,” Labour Leader Chris Hipkins said.
“This is a drop in the ocean. We want to know what the Government will be doing for New Zealanders without children, superannuitants, students, and those who aren’t eligible for the in-work tax credit.
“People on low and fixed incomes can’t wait for help to slowly flow through the system. The sooner the Government can give those people answers the better.” Hipkins said.
The Green Party agrees and says the package fails to help those hardest hit by the fuel crisis.
“The Luxon Government has turned its back on hundreds of thousands of New Zealanders,” co-leader Marama Davidson said.
Co-leader, Chlöe Swarbrick, said the policy fails to support those pushed out of work and does not address wider cost pressures.
“This package does nothing for beneficiaries and their children, retirees, or unpaid carers, who are all left out entirely,” she said.
Te Pāti Māori co-leader Debbie Ngarewa-Packer also criticised the limited reach.
“We’ve got 143,000 that have been accommodated for, but there’s at least 620,000 that haven’t been,” she said.
“We haven’t seen support for students, for superannuitants, for those on benefits or in rural communities. We expected better, and certainly this is the government overpromising again and under delivered.”
Meanwhile, New Zealand First leader Winston Peters described the package as a “serious start”, while downplaying concerns about the duration of the global conflict driving fuel prices.
“I told you this is going to be over sooner than you think. Stand back and watch,” he said.
