Grant Robertson reveals future of cost of living payments

December 4, 2022
Deputy Prime Minister Grant Robertson.

Finance Minister Grant Robertson says further cost of living payments are "not on the agenda" as concerns about inflationary pressure grow, but that the Government was still considering whether to extend fuel excise duty relief.

Speaking to Q + A this morning, Robertson said a decision on extending fuel excise duty discounts would be made "very shortly" before Christmas but warned that it wouldn't be a long-term extension.

“We'll make our judgement very shortly around whether or not we think it can be extended, but if it does, that won’t be for a long period of time, because ultimately, we need that money for the long term for the things New Zealanders really want and need - good quality roads, public transport.”

In July, the Government said the 25 cents per litre cut to fuel excise duty would be extended until the end of January 2023 - after initially being introduced in March.

"Cabinet hasn't taken that decision yet - what we have said, all the way through, is we'll look at the economic conditions as they are and make any decision then."

"But we're acutely aware of the fact that, actually, the fuel excise duty cut has contributed to lowering inflation because fuel is such a big part of the CPI - actually, what we've done is kept inflation in check," Robertson said.

When asked about the cost-of-living payment, the Finance Minister said the Government was focusing on relief that "doesn't exacerbate inflation", like increases to the Family Tax Credit and childcare subsidies.

"That's not on the agenda at the moment. What we want to do is get ourselves through this next period of time," he said.

A 'very tight' Budget 2023 anticipated

Looking forward to next year's budget, Robertson said he expected it to be "very tight" after several years of abnormal pandemic-related spending.

"What we're looking towards is returning our expenditure as a percentage of GDP back down to around the 30% level - the level that it's traditionally been at," he said.

"That's going to make for a very tight budget. It's going to be a budget that will largely be about getting the basics right - managing New Zealand through a really tricky period of time.

"So while the news this week from the Reserve Bank certainly wasn't welcome - it's something that actually we've been planning for, for some time."

When asked whether he thought the Reserve Bank was out of touch as compared to its counterparts around the word, Robertson said the bank was running ahead of others.

"The Reserve Bank in New Zealand is a little bit ahead of everybody else. So they began, their rate increases earlier than others did - partly because the New Zealand economy came through Covid more strongly than others.

"So we're probably a quarter or two quarters ahead - in many ways - of where others have been. It is a tricky balance for the Reserve Bank."