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Nearly 150,000 New Zealand families will soon receive a weekly cash payment to help them afford petrol, the government has announced, in what is believed to be the world’s first fuel relief package that directly pays citizens since the Iran war began.
On Tuesday, prime minister Christopher Luxon and finance minister Nicola Willis announced roughly 143,000 families with children will get an extra NZ$50 ($29.20; £21.80) a week through a boost to the in-work tax credit – a payment to families with dependent children where at least one parent is in paid employment and neither parent receives benefits. Another 14,000 families on slightly higher incomes will also be eligible for payments, but will receive less than $50 per week.
The increase will be temporary, lasting for one year from 1 April, or until the price of 91 octane petrol drops below $3 ($1.75; £1.30) a litre for four consecutive weeks.
Petrol prices have increased roughly 40-50 cents a litre, pushing the average price of unleaded fuel to more than $3 per litre in New Zealand since the Middle East conflict began. Meanwhile, some petrol stations have reported running out of petrol, as people rush to stock up. As of Tuesday, the country had 46 days’ worth of combined petrol, diesel and jet fuel stocks.
Luxon said the priority was ensuring the country had sufficient fuel supply, but he was conscious that the increasing price at the pump was “eating into household budgets”.
Willis said the policy was targeted to families “in the squeezed middle” – parents who were working, not eligible for benefits and had modest household incomes.
The ministers accepted that some New Zealanders would be disappointed they were not be eligible.
“We cannot control global oil markets or international conflicts, but we can soften the impact on working families who cannot easily avoid higher fuel costs by delivering support in a responsible and well-targeted way,” Willis said.
But the relief package fails to help those hit hardest by the higher fuel costs, said Green party co-leader Marama Davidson.
“This package does nothing for [people receiving benefits] and their children, retirees, or unpaid carers, who are all left out entirely,” Davidson said. “This is a crisis and the government’s response will do nothing for most New Zealanders.”
Governments around the world have been implementing measures to address the skyrocketing fuel prices and shortages, from the Philippines cutting down to a four-day week, to fuel rationing in Sri Lanka.
Ireland’s government is set to sign off on cuts to excise duty on fuels to cushion the economic impact from the conflict. Thailand and South Korea have implemented caps on domestic fuel prices, with the latter also considering providing additional energy vouchers to subsidise some households.
In the Pacific, the Marshall Islands said it will reduce income taxes for workers to mitigate to some of the cost of living pressures.
But New Zealand appears to be the first country that has offered a direct cash payment as part of a government relief package.
The isolated nation is particularly exposed to the energy shocks produced by the conflict and to economic crises generally. It is highly dependent on global trade and susceptible to disruptions in supply chains and shipping.
