“Chris Hipkins’ dumb, election year populism shows he just doesn’t have the mettle to make hard choices. Reducing revenue while spending up large is Liz Truss-style economics”, says ACT Leader David Seymour.
“Chris Hipkins’ dumb, election year populism shows he just doesn’t have the mettle to make hard choices. Reducing revenue while spending up large is Liz Truss-style economics”, says ACT Leader David Seymour.
“There are at least three reasons this is a totally incoherent policy.
“First, petrol taxes are hypothecated for road building and maintenance. Anyone who has spent more than a few hours on our roads over the summer will have noticed they’re in desperate need of repair. When petrol taxes get cut the money has to come from somewhere else. The Government has decided that all taxpayers will pay for motorists to have temporarily cheaper petrol.
“Second, according to Brad Olsen, extending the fuel subsidy gives three times as much help to the top income decile compared to the bottom income decile. It’s terribly regressive.
“Finally, world oil prices are now well below where they were a year ago. Now is the time to rip the band aid off.
“Last year, ACT told the Government that ‘there’s nothing more permanent than a temporary Government program,’ and Chris Hipkins has proved us right by kicking the petrol tax cut down the road yet again.
"ACT first called the cost of living crisis in December 2021. The Government finally admitted it in March last year, and the petrol and public transport discounts were rushed together when the Government finally admitted there was a crisis. Now they’ve been extended yet again.
“What the Government could have done is introduced a durable solution, returning the proceeds of the Emissions Trading Scheme to citizens. Announced by ACT, it is a simple and practical policy that would give families a sizeable refund without reducing a cent from the roading budget.
"ACT’s policy has the advantage of being sustainable, while maintaining the incentive to emit less carbon. A family that used its carbon tax refund for greener solutions would effectively be subsidised by those who buy petrol.
"A serious approach to the cost of living crisis can be found in ACT’s Alternative Budget. The carbon tax rebate is part of this but there is much more.
“As the only party to publish a fully-costed alternative, ACT calls on the Government to reduce wasteful spending so that it can cut income taxes, stop piling red tape on businesses, and get the Reserve Bank back to focusing solely on inflation.”