‘Squeezed middle’ gets $50 weekly fuel relief as beneficiaries left in the cold

2026-03-24 - 00:54

Roughly 143,000 low- and middle-income families will receive an extra $50 a week for up to a year as part of the Government’s response to the fuel crisis, Finance Minister Nicola Willis has announced. Beneficiaries and superannuitants are among those who will be left in the cold, with Willis citing the need for government support to be targeted and temporary – but keeping open the possibility of further initiatives if prices continue to skyrocket and households face further pressure at the pump. Willis and Prime Minister Christopher Luxon on Tuesday afternoon announced the details of the Government’s support package for New Zealanders dealing with rising fuel prices as a result of the United States’ ongoing war with Iran, which has affected key shipping routes and threatened energy infrastructure in the Middle East. As widely expected, the coalition’s financial support will come through a boost to the Working for Families in-work tax credit, available for families with dependent children where at least one parent is in paid employment and neither parent receives a main benefit. Roughly 143,000 families receive the tax credit, which is currently set at $97.50 a week but will now rise to $147.50 a week as part of the Government’s support package. A further 14,000 families would become eligible for the tax credit as a result of the change to the base rate, although they would receive less than $50 a week. Willis said the increase would be temporary, running for one year at most or until the price of 91 octane petrol fell below $3 a litre for four consecutive weeks. “The policy is carefully targeted to families in the squeezed middle – parents who are working hard for a living, are not eligible for main benefits, and yet have modest household incomes with which to support their children. “We know these families will be hit particularly hard by the global fuel-price shock. We are delivering them timely relief.” The Government would on Wednesday introduce an amendment paper to the Taxation Bill currently before Parliament, allowing the changes to come into effect from April 1. Willis said the policy would cost $373 million if it ran for a full year, and would be funded from the Government’s operating allowance in its upcoming Budget rather than through new borrowing. “What happened after Covid, when the Government let all of the normal rules go, we saw inflation go far higher than it needed to, debt more than double as a proportion of the economy, and it has taken New Zealand many years to climb out of that mess.” Asked why the Government had chosen to exclude beneficiaries from receiving any temporary relief, Luxon said: “We cannot alleviate pressure on everybody as a function of our fiscal constraints that we’re dealing with, and if we want to be responsible economic managers about that, we’ve been very clear about our frame, which has to be temporary and targeted.” He said the Government did not intend to remove sanctions for beneficiaries who were unable to make it to job interviews due to high fuel costs, arguing it was “working very well”.