Prime Minister Christopher Luxon is making it clear that the government will not be spreading taxpayer money thin to cover all groups affected by skyrocketing fuel prices caused by ongoing unrest in the Middle East.
When asked about support for businesses facing increased costs, Luxon emphasised that the government’s approach is “pretty clear.”
“We’re acknowledging upfront we cannot alleviate the pressure for everybody, but we do have a framework around timely, targeted, temporary support, which I think most New Zealanders would understand and appreciate.”
At a press conference on Tuesday, Luxon highlighted diesel’s critical role as the “lifeblood of our economy,” noting that key sectors such as farming and construction rely on it to keep operating.
“Price increases have been particularly sharp for diesel, rising at a much faster rate than petrol and jet fuel, and that is due to the strong and inflexible global demand and the disruption to diesel refineries, which have been most impacted,” he said.
“It is understandable that diesel users want relief from rising prices, and we are acutely aware of the pressure that all Kiwis are feeling, but seeking to alleviate that pressure for everyone would be unaffordable and irresponsible.”
Luxon repeatedly referenced lessons learned during the Covid-19 pandemic, pointing to the economic consequences of indiscriminate spending.
“The short-term gains that people experience from spending decisions made during the pandemic resulted in long-term pain in the form of high inflation, high interest rates, high debt and a prolonged recession from which we had just started recovering before the conflict began.”
The government has currently implemented targeted measures, including a $50-a-week boost to the In-Work Tax Credit, benefiting roughly 143,000 families with children. Beneficiaries and superannuitants received their annual automatic adjustment on April 1. Last week, the government also approved a temporary 30% boost to mileage rates for home and community support workers who must drive to deliver care.
Luxon made it clear on Monday that broad, untargeted handouts are not on the table. He acknowledged the strain rising prices place on households but warned that using a “cash bazooka” approach could worsen inflation.
Asked whether other groups, including struggling businesses, would see support, Luxon reiterated the government’s philosophy of timely, targeted, temporary assistance as the only responsible path.