Kerre Woodham: The fuel relief package is simply a morale booster

So help is on the way from the Government, as expected. The announcement came around 12:30pm yesterday. Thought it might be too late, because according to Donald Trump, “me and the Ayatollah are going to be controlling the Straits of Hormuz”. Be open very soon, he says. Well, that's good, isn't it? But in the meantime, while we wait for that to eventuate, Donald Trump and the Ayatollah cutting the ribbon over the Straits of Hormuz, 140,000 New Zealand families with kids will receive an extra $50 per week through the boost in the in-work tax credit. 

Christopher Luxon and Finance Minister Nicola Willis outlined the support package at Parliament yesterday. They said there will be some people who'll be disappointed, but it's a responsible decision that avoids hiking inflation, which the Reserve Bank Governor was warning about yesterday. The increase will begin from April 7th and it'll be paid weekly or fortnightly, depending on when people are paid. There'll be 143,000 families receiving it, as well as about 14,000 families who'll receive the credit but not as much – it'll be an abated rate. Beneficiaries and superannuitants won't receive the boost. The Government says, well, your payments are going to be adjusted from April 1st as per normal, so you'll be getting slightly more anyway.  

The in-work tax credit is a payment to families with dependent children where at least one parent is in paid employment and neither parent receives a main benefit from Work and Income. The cutoff for receiving the tax credit is around $89,000 of annual family income for a family with one child, $112,000 for a family with two children, $135,000 for a family with three. The added payment will last for one year or until the price of 91 octane petrol drops below $3 a litre for four consecutive weeks. It'll be estimated to cost around $373 million for the year, and Willis has promised the cost will be met within the government's operating allowance.  

So there you have it; that's the detail. It's pretty much as we expected, isn't it? And it's not perfect. There'll be some who feel overlooked and left out, others who'll say, you're all going soft, suck it up, put your head down, get through it like we used to, stop spending money on coffees and Netflix and you'll be fine. And others like me who see it more as a morale booster than an income booster. An acknowledgement that there have been tough times for the past five years and that many young families who are in the lower income because of where they are at their stage in life have been literally paying the price for the failings of well-paid public servants who made decisions that impacted on them and had absolutely no impact on the decision makers. When the going got tough, they took the money and they ran – they're sitting pretty now, thanks very much. And in the meantime, the reverberations and the repercussions and the ramifications of the decisions they made are literally being paid for by young Kiwi families. As the Finance Minister told Mike Hosking this morning, although they don't know the vehicular or transport circumstances of each individual low-income family, they know they'll be feeling the pinch from increased fuel prices across the board. 

“You are right that those families' circumstances will vary, but regardless of their circumstances, they will be facing increasing costs and many of them will be car users and many of them will experience other price pressures. In terms of diesel users, yes, we are very conscious that diesel prices have gone up massively. They're a huge input for our agricultural, manufacturing, industrial industries. The challenge we have there, Mike, is our number one goal is to make sure those industries have enough diesel to keep going, because that's what would do the most harm to the economy in terms of jobs and incomes. And so it would be wrong for us to be sending a price signal down now by reducing the price of diesel when actually, in future, if worst case scenarios played out, we might be having to preserve our supply of diesel. So that's what we're very focused on.” 

Which is a fair point. Lowering the price of diesel, allowing for a spend up on the diesel, is probably not a sensible thing if we have to bring in rationing. So I'd really very much like to get your feedback on this. As far as I see it, it's a morale booster. It's like, hang in there. Things are getting better. Things were getting better, just, and then along comes the attack on Iran and the tightening up of the Straits of Hormuz and the tightening up of the fuel supply, which is absolutely essential not just to the Western world, but to the entire world at the moment. It'll be over quickly or it won't. Hopefully it will. It won't last forever. The Reserve Bank Governor said she sees it hopefully as temporary and that good times are a coming. We've been promised them for s

Episode Transcript

Speaker 1 (00:06):
You're listening to the Kerrywood and Mornings podcast from News Talks.
He'd be so help is on.

Speaker 2 (00:12):
The way from the government. As expected, The announcement came
round twelve point thirty yesterday. It might be too late
because according to Donald Trump, me and the AA tooler
are going to be controlling the straits of a moose.
Be open very soon. Says, well, that's good, isn't it.
But in the meantime, well we wait for that to eventuate.

(00:38):
Donald Trump and the aatoler cutting the ribbon over the
straits of a moose. One hundred and forty thousand New
Zealand families with kids will receive an extra fifty dollars
per week through As we were discussing yesterday the boost
and the end work tax credit. Christopher Luxen and Finance
Minister Nichola Willis outlined the support package at Parliament yesterday

(00:59):
and they said there will be some people who'll be disappointed,
but they said it's a responsible decision that avoids hiking inflation,
which the Reserve Bank governor was warning about yesterday. Since
she a breath of fresh air just as a bye
the bye. So nice to have calm, sensible, rational intelligent
people in charge of the coffers anyway. The increase will

(01:22):
begin from April seven, by which time the AA, Toler
and Donald will probably be sailing the straits of a MOLLS.
But nonetheless it will begin from April seven. It'll be
paid weekly or fortnightly, depending on when people are paid.
There'll be one hundred and forty three thousand families receiving it,
as well as about fourteen thousand families who'll receive the

(01:42):
credit but not as much. It'll be in abated rate.
Beneficiaries and supernuitants won't receive the boost. The government says, well,
your payment's going to be adjusted from April first, as
per normal, so you'll be getting slightly more anyway.

Speaker 3 (01:56):
So.

Speaker 2 (01:57):
The inn Work Tax Credit is a payment to families
with dependent children where at least one parent is in
paid employment and neither parent receives a main benefit from
work and income. The cutoff for receiving the tax credit
is around eighty nine thousand dollars of annual family income
for a family with one child, one hundred and twelve

(02:17):
for a family with two children, one hundred and thirty
five for a family with three. The added payment will
last for one year, or until the price of ninety
one octane petrol drops below three dollars a liter for
four consecutive weeks. It'll be estimated to cost around three
hundred and seventy three million for the year, and Willis

(02:37):
has promised the cost will be met within the government's
operating allowance.

Speaker 1 (02:41):
So you have it, you know.

Speaker 2 (02:43):
That's that's the detail. It's pretty much as we expect it,
isn't it. And it's not perfect. There'll be some who
feel overlooked and left out. Others who'll say, oh, you're
all going soft, suck it up, put your head down,
get through it, like we used to stop spending money
on coffees and Netflix and you'll be fine. And others
like May who see it more as a morale booster

(03:06):
than an income booster. An acknowledgment that there have been
tough times for the past five years, and that many
young families who are in the lower income because of
where they are at their stage in life, have been
literally paying the price for the failings of well paid
public servants who made decisions that impacted on them and

(03:30):
had absolutely no impact on the decision makers. When the
going got tough, they took the money and they ran.
They're sitting pretty now, thanks very much. And in the meantime,
the reverberations and the repercussions and the ramifications of the
decisions they made are literally being paid for by young
kiwee families. As the Finance Minister told Mike Costing this morning,

(03:54):
although they don't know the vehicular or transport circumstances of
each individual low income family, they know they'll be feeling
the pinch from increased fuel prices across the board.

Speaker 3 (04:05):
Are that those family circumstances will vary, but regardless of
their circumstances, they will be facing increasing costs, and many
of them will be car users, and many of them
will experience other price pressures. In terms of diesel users, yes,
we are very conscious that diesel prices have gone up massively.
They're a huge input for our agricultural, manufacturing, industrial industries.

(04:27):
The challenge we have there, MIC is our number one
goal is to make sure those industries have enough diesel
to keep going, because that's what would do the most
harm to the economy in terms of jobs and incomes,
and so it would be wrong for us to be
sending a price signaled out now by reducing the price
of diesel, when actually in future, if West case scenarios
played out, we might be having to preserve our supply

(04:49):
of diesel. So that's what we're very focused.

Speaker 2 (04:51):
On, which is a fair point, lowering the price of
diesel allowing for a spend up on the diesel is
probably not a sensible thing if we have to bring
in rationing. So I'd really very much like to get
your feedback on this. As far as I said, it's
a morale booster. It's like, hang in there, things are
getting better. Things were getting better just and then along

(05:14):
comes the attack on Iran and the tightening up of
the streets of Amos and the tightening up of the
fuel supply, which is absolutely essential not just to the
Western world but to the entire world. At the moment,
it'll be over quickly, or it won't. Hopefully it will.

(05:35):
It won't last forever. The Reserve Bank governor said she
sees it hopefully as temporary, and that good times are
a coming. We've been promised them for so long we
probably we're probably a bit cynical, but the good times
are coming, they are improving. This I see is a

(05:57):
morale booster. To those who are doing the hardest, doing
it the toughest, who don't have the wriggle room, who
don't have the disposable income, and I'm okay with that.

Speaker 1 (06:07):
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