John MacDonald: Fuel relief plan is focusing on the wrong people

I reckon the Government is going about this fuel price rescue package the wrong way. It seems to think it's doing the right thing picking low-to-middle income earners who, it assumes, are struggling to pay the higher fuel prices. 

Of course, someone on the minimum wage, for example, is going to be harder hit by $3.30, $3.40, $3.50 a litre than someone earning $100K.

Finance Minister Nicola Willis says the people the Government wants to help are the working New Zealanders who have little option each day but to get in the car and drive to work. It wants to avoid a blanket cut to the fuel tax and it doesn't want to invent a new scheme of income assistance from scratch. 

As the Minister puts it, she wants something that doesn't involve any paperwork. Which sounds like tax credits to me. But I think the Government needs to lift its sights and think a little bit more strategically about this. 

It should be thinking about the wider consequences of higher fuel prices, however long they continue. And, instead of paying a few bucks to people on the lower pay grades, what it should be doing is providing support or providing interventions for the likes of food growers, food manufacturers, the transport and logistics sectors. Because all of those groups, they're paying higher fuel prices. But they don't just suck them up like your average motorist does. They pass them on, don't they? 

Which means the low-to-middle income people being compensated for spending more on diesel and petrol for their vehicles will still be paying more for their bread and their fruit and their veggies. Any savings will just be cancelled-out by costs passed on to them from the food processors or producers, the manufacturers, the transport sector and the farmers at the supermarket checkout. 

Maybe the Government's trying to avoid the type of criticism that would inevitably come its way if it did what I think it should be doing. Because there would be no shortage of people saying it was just looking after its people and the fat cat farmers and the corporate food manufacturers. 

Can't you hear it? But all the Government would have to say to quieten-down those people is that, if it didn‘t, they’d be paying more anyway.

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Episode Transcript

Speaker 1 (00:06):
You're listening to the Canterbury Mornings podcast with John McDonald
from newstalksb.

Speaker 2 (00:12):
I reckon the government is going about this fuel price
rescue package the wrong way. It seems to be, or
it seems to think it's doing the right thing, picking
load to middle income earners who were assumed struggling to
pay the high fuel prices. And yet of course someone
on the minimum wage, for example, is going to be

(00:34):
hard to hit by what three point thirty three forty
three point fifty a leader than someone earning one hundred
k or whatever, And Finance Minister Nicola Willis says the
people the government wants to help the working New Zealanders
who have little option each day but to get in
the car and drive to work. So I wants to
avoid a blanket cut to the fuel tax, and it
doesn't want to invent a new scheme of income assistance

(00:56):
from scratch. I can understand why instead of that, wants
to rely on the tax and transfer system, including working
for families. As Nicola Willis said to Mike this morning,
she wants some that doesn't involve any paperwork. Kind of optimistic.
Still sounds like tax credits to me, don't you reckon,
which could be temporarily increased to boost people's incomes while

(01:18):
the war goes on and while the higher fuel prices continue.
But that's not the way it should be doing it,
I reckon. The government needs to lift its sights and
think a little bit more strategically about this, and I'll
tell you what I'm getting it. The government should be
thinking about the wider consequences of higher fuel prices, however
long they continue, and instead of paying a few bucks

(01:40):
to people on the lower pay grades, what it should
be doing is providing support or providing interventions for the
likes of food growers, food manufacturers, the transport and logistics sectors.
You know, because all of those groups they're paying higher
fuel prices, but they don't just suck them up like

(02:02):
your average motorist does. What do they do? They pass
them on, don't they, Which means the way the government
plans to approach it will see the low to middle
income people being compensated somehow for spending more on diasil
and petrol for the vehicles, but they'll still be paying
more for their bread and their fruit and their vengies.
It makes no sense to me, so any savings will
just be canceled out by costs passed on to them

(02:25):
from the food processes or producers, the manufacturers, the transport sector,
the farmers via the likes of the supermarket checkout. See
do you see it that way or not? Maybe what
the government's doing, maybe is trying to avoid the type
of criticism that would inevitably come its way if it
did do what I think it should be doing, because

(02:45):
there would be no shortage of people with there saying oh,
this is just national looking after its people, you know,
corporate welfare or the usual lazy slogans. You know, why
should the fat cat farmers and the big corporate food
manufacturers and all those guys, why should they get special
treatment when the rest of us are paying through the

(03:05):
nose for the peture and the daesel. Can't you hear it?
Or the reply to that short sighted talk? But yeah,
you see, the government would just have to say we're
helping the growers and the manufacturers and the people who
truck the stuff to you, because if we didn't, you'd
be paying more anyway.

Speaker 1 (03:22):
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