Fuel tax subsidy won't be extended beyond June deadline, Robertson says
The Government wont extend the fuel tax subsidy beyond its June deadline, Finance Minister Grant Robertson said. The Government temporarily cut 25 cents a litre from fuel taxes in March last year in response to a spike in fuel costs following Russias invasion of Ukraine. Having been extended several times , the subsidy is due to come to an end on June 30 when the next Budget, which will have a cost of living focus, kicks in. Robertson has previously said that continuing the subsidy wasnt affordable and he confirmed on Friday that it will come to an end in June. Robertson told NewstalkZB the Government was aiming for a more fiscally careful Budget to get back to surplus. Labour would need to strike a balance to bring spending down to normal levels, but support the countrys needs for the coming year, he said. READ MORE: * Cyclone Gabrielle: $50m for businesses, workers, $250m for roads * Fuel excise tax cut and half-price public transport extended, PM Chris Hipkins confirms * Fuel prices could rise by up to 40 cents a litre by April as tax cuts end * A jump at the pump: Government has little control as petrol tops $3 a litre The reduction in petrol excise duty combined with a cut to road user charges for diesel, and a half-price subsidy on public transport has come at a total cost of about $2 billion. AA principal policy adviser Terry Collins said ending the subsidy would push premium petrol prices back above $3 a litre, highs it hit last year . Unleaded 95 was averaging about $2.66 at the pump on Friday while Unleaded 91 was at $2.425, according to fuel comparison site Gaspy . Collins said he was surprised the Government was reinstating the tax just months out from Octobers election. Extending the petrol tax subsidy was one of the first moves of new Prime Minister Chris Hipkins, who has committed to a focus on bread-and-butter economic issues. It's a ballsy call to balance the Budget, Collins said. Given the number of other concessions they made around the cost of living, I just didn't predict this one. But he said the funds were needed to build and maintain roads that had suffered significant damage from recent storms and cyclones. There was a big need to fix our potholes and the state of the roads as it was let alone that they got trashed with the two major weather events, Collins said. They have got to pay for it somehow. By stalling and putting these things off, all it's really doing is it's pushing all these problems out into the future for somebody else to handle where they're going to be much bigger. They just can't keep doing it. Reduced income from petrol taxes meant the Government had to fund roading from other areas, putting more of a burden on general taxation, he said. The fuel tax is coming up for a three-year review in July.