Venu Menon
Wellington, June 29,2023
The House witnessed an animated discussion today on the fuel tax subsidy, with National Party Deputy Leader Nicola Willis raising concerns over the impact on New Zealanders when the “government rips off the fuel tax band-aid this weekend.”
But Deputy Prime Minister Carmel Sepuloni (currently acting PM) pointed out that the fuel subsidy was put in place last year to offset the high fuel price, which had nearly reached $3 per litre, “but we knew that it wasn’t going to last forever.”
Sepuloni said she was relieved that petrol prices “have come down since then.” She recognised, however, that petrol prices could increase.
But from July 1, “many of the initiatives that we announced at Budget 2023 will come into effect.” These included cheaper or free public transport, cost reduction in early childhood education and the scrapping of co-payment for prescriptions.
But National’s Willis, who is her party’s finance spokesperson, said the government’s measures to combat the cost of living crisis were “nothing more than a temporary band-aid that inevitably creates more pain when the government rips it off.”
Denying the charge, Sepuloni retorted: “We have said that the co-payment [for prescriptions] will be removed, and that’s not temporary. The changes and access to child care and the support for child care costs is not temporary. The fact that those on the sole parent benefit will now get child support pass-on is not temporary.”
Willis listed the problems facing New Zealanders, including higher inflation, higher rents, higher food prices, higher house pieces, and lower growth compared to pre-Covid levels.
Sepuloni pointed to the near- record low unemployment rate which stood at 3.4%. She said inflation was a global phenomenon, which impacted New Zealand.
On Wednesday, Minister of Finance Grant Robertson launched a spirited defence of the economy. He pointed to a resilient labour market with “New Zealanders in work in record numbers, and wages growing.”
He cited Stats New Zealand to show that employment rose for “the fifth month in a row, with filled jobs rising by 5,461 or 0.2% in May, taking the total number of jobs to 2.37million.” The goods and services industries have kept the jobs market buoyant, Robertson noted.
A region-wise break-up showed that the number of filled jobs in Auckland rose 4.6% over a year earlier, Canterbury by 3.8%, Waikato by 3.4%, Wellington by 2.7% and Otago by 5.2%.
Robertson added that the jobs market remained positive with the Westpac-McDermott Miller Employment Confidence Index at 105.6. “A number above 100 represents optimism, while below represents pessimism,” he explained.
While all regions saw a fall in perceptions about current job opportunities, that reflected “some of the issues that New Zealanders are dealing with at the moment.”
On exports, the finance minister admitted that New Zealand’s exporters were facing challenges and “that will continue for the rest of the year.” However, he cited Stats New Zealand figures to show that exports rose 2.8% to $7 billion in May, led by dairy products, fruit and seafood.
On an annual basis, exports rose 8.2% to $ 72.8 billion. Annual exports to China rose 2.3% , to Australia by 7.5%, to the EU by 8.6%, and to the US by 12%.
Robertson told the House that Prime Minister Chris Hipkins was currently leading a 29-strong business delegation to China to “boost export growth with a key trading partner.” The key sectors ranged from dairy, meat and wood, to emerging areas like gaming, health and wellness, as well as tourism, and education.
“We are continuing to strengthen and diversify our economic ties with the rest of the world, including through our new free-trade agreements with the UK and the EU,” Robertson told the House.
He reiterated that while many New Zealanders “are doing it tough, as a country we are well placed to face the challenges ahead.” Unemployment was at record lows, and public debt levels were well below countries “we compare ourselves with.”
Robertson said the Labour Government was “continuing to strike a balance to support New Zealanders in the here and now, while investing in strong public services and a resilient infrastructure network to build for a better tomorrow.”
Venu Menon is an Indian Newslink reporter based in Wellington
