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Source: New Zealand Government


  • Petrol excise duty cut by 25 cents a litre for more than five months until 31 January 2023
  • Road User Charges reduced by the equivalent until 31 January 2023
  • Half price public transport fares extended until 31 January 2023
  • Treasury estimates combined impacts of policy will reduce headline inflation by 0.5 percentage points in the June 2022 quarter.

The Government is providing significant additional cost of living support and is fighting inflation by extending the reductions to fuel excise duty, road user charges and half-price public transport by more than five months until the end of January next year.

The cut to fuel excise reduces the cost of filling up a 40 litre tank of petrol by over $11, and for a 60 litre tank, over $17 and half price public transport sees an average person who pays two $5 fares a day save $25 a week.

“We know that inflation is rising across the world, and cost of living pressures are making it tough for New Zealand right now. High fuel prices, particularly driven by the impact of the Russian invasion of Ukraine, are a global problem affecting households and businesses in New Zealand,” Grant Robertson said. 

“That is why we moved in March to cut fuel excise tax by 25 cents a litre and road user charges by equivalent levels, along with halving public transport fares.

“At the time of the Budget we extended those reductions, and are now extending them again by more than five months until January 31 because we want Kiwis to have some certainty over the coming months in the face of volatile prices at the pump.

“The Treasury’s estimate is that the combined impacts of this policy will reduce headline inflation by 0.5 percentage points in the June 2022 quarter. Even though many commentators are forecasting that inflation will peak in the June quarter, it is likely to stay for some time at levels higher than we have seen in recent years.

“There’s no easy fix for the cost of living, but we’re taking a range of actions to ease the pressure on families. In the case of today’s announcement we know that the rising price of fuel has a direct effect on inflation, and making these changes is a targeted approach to a root cause of the cost of living pressure being faced by Kiwi households.

 “We also have the first cost of living payment going out in two weeks’ time. This payment will support an estimated 2.1 million people aged 18 and over for a three month period,” Grant Robertson said. 

“The global fuel price crisis is not leaving many untouched so we’re pleased we’re doing what we can to ease pressure on motorists,” Megan Woods said.

Transport Minister Michael Wood said since half price fares were introduced on April 1, public transport use has increased in the three largest centres, Auckland, Wellington and Christchurch.

We know this makes a real difference for people feeling cost of living pressures, particularly lower income households. Because half price public transport will now be available for all New Zealanders until the end of January, the Community Connect scheme will now start on February 1 next year.

“This will also give more time for local authorities to put in place the systems required to efficiently administer the Community Connect scheme that will give those who have Community Service Cards free public transport.

“Extending the reductions to fuel excise duty and road user charges will also help to reduce the fuel burden on the road transport sector, and in doing so keeping the cost of food and essential goods lower,” Michael Wood said.

Extending the fuel excise and RUC reductions until the end of January is estimated to cost $589 million. This is money that goes directly to the National Land Transport Fund to pay for building and maintaining roads, and funding public transport, walking and cycling initiatives. The cost to extend half price public transport is an estimated $63.1 million.

“In the end of financial year wash up we have identified funding that we can re-prioritise to meet these costs and top up the National Land Transport Fund, in particular from lower than forecast write-offs from the Small Business Cashflow Loan Scheme, and money remaining in the COVID Support Payment allocation,” Grant Robertson said.

Cost of living support to date:

  • Fuel excise reduction of 25 cents per litre until January 31
  • Equivalent reduction in Road User Charges
  • Half price public transport until January 31, and permanently for Community Service Card holders from February 1
  • Temporary cost of living payment of ~$27 per week for people over 18 earning less than $70,000 who do not receive the Winter Energy Payment.
  • Increases to Working for Families, Superannuation, student allowance and main benefits from April 1
  • Working with the supermarket sector so Kiwis are getting a fair price at the checkout
  • Parental leave payments boosted by up to $40 a week
  • Winter Energy Payment providing more than one million New Zealanders with up to $80 extra a month to help with power bills through the colder months
  • Free school lunches for more than 211,000 children
  • Minimum wage increases since 2017 mean fulltime minimum wage workers now earn an extra $218 a week
  • GP visits are cheaper more for than half a million people, including free doctors’ visits for all children under 14
  • Best Start payment providing an extra $65 a week for parents of newborns