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April 21, 2022 3 mins
I’m beginning to wonder whether the Government may have made a rod for its own back over the fuel tax cuts. If you’ll remember, they amounted to almost 30 cents a litre including the GST bit – making a huge difference to what people were paying at the pump.
So, yesterday’s big news – the news everyone had been waiting for was the much-anticipated announcement of where inflation was going to be. And while it was tantalisingly close to 7 percent, it came in slightly under, at 6.9 percent, which was half a point better than the more pessimistic predictions of some economists.
Still, it’s the highest inflation has been for over 30 years.
Sometimes I’m not so sure whether the public pay a lot of attention to details such as whether inflation is 6.9 percent or 7 percent.
What we notice is the price we pay for goods and services, whether it be at the supermarket or in our shopping malls or at the petrol pump.  
When it comes to the price at the petrol pump, Grant Robertson has suggested it was the Government’s cut to fuel taxes (which took effect in back in mid-March) that made the difference. “I think it has potentially kept it under 7 percent”, he said.
It’s kind of ironic as most of the language around inflation coming from the government is that inflation is the result of global and supply chain issues and nothing whatsoever to do with them.
Yet in the next breath Grant Robertson is saying - effectively - ‘well if it hadn’t been for us, it would have been higher!’
So, it begs the question - what is the future of the fuel tax?
I filled up my car yesterday. Then, as with almost every other time, I looked at the price and thought ‘thank goodness the government made that cut or it wouldn't be looking too pretty’.
One of the most regular reminders the public have of the cost of living, is the price of petrol as we drive past those petrol station signs, whether or not we’re pulling in that day to fill’er up. (It’s worth noting we’re still way more expensive than the price people in other markets such as the USA.)
But getting back to the point, apparently there is something the government can do! Grant Robertson has told us so, and has given us a perfect example with the fuel tax cut having reduced inflation.
So - how on earth are they ever going to raise it again?
Is this something that they’re simply going to have to keep on because it’s the one demonstration of where the government is sacrificing its own coffers for the sake of ordinary New Zealanders who are feeling under pressure in almost every aspect of their spending?
That then leads to the question around public transport with prices being chopped in half to accompany the fuel tax cut.
There remains the competing issue of climate change because as we know petrol driven cars are the devil.
But as long as we rely on them the government is caught between a rock and a hard place.
So, if you consider the future of this tax alongside the future of a government whose fortunes have been on the slide in recent polling, I think it’s going to be a pretty tough sell any time before the election for them to reintroduce those petrol taxes.
Megan Woods says ”we are continuing to monitor the situation given the volatility and global oil markets”.
I would say the situation that they’ll be monitoring will be the polls, and that those alone will determine the future of the price of fuel and the fuel tax.
So, I reckon, that this side of the election, those fuel tax cuts – they're here to stay.

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