Help Yourself
Nicola Willis' support package does nothing for most.
Now I really empathise
Looking through your bloodshot eyes
And I know you, you're so frustrated
But we all become what we once hated
Besides, nobody can be that wise
Songwriters: James Hogarth / Freddy James / Amy Winehouse / Larry Stock.
Government Support.
Yesterday, the government finally announced its support package to help Kiwis through the fuel crisis. Nicola Willis opened her enormous purse, and once the moths had flown free, it was revealed that 143,000 families with kids would receive $50 per week. You can find all the details here.
Willis said the support was “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.”
For once, the government was indeed “laser-focussed”, managing to miss the vast majority of Kiwis with their targeted assistance. Which is not to say that those who receive the additional payment are not deserving, they certainly are, but what about others?
What about pensioners who need to get to medical appointments, parents not in work taking kids to school, couples or individuals without kids who were already struggling, and, of course, the users of diesel, which will drive the price of goods we all pay for?
Isaac Gunson, spokesperson for the Child Poverty Action Group, said, “Close to a quarter of a million children live in households receiving a core benefit, and the idea that there's no additional support for them that will be made available is pretty outrageous.”
Labour leader Chris Hipkins had this to say:
Couldn’t they have been a bit more generous?
I know that Nicola Willis is averse to spending money, seeing her role largely as one of wealth transfer from those with little to those with plenty, but how much has she actually spent as she smiles into the camera, playing the role of the kind-hearted socialist?
Well, 143,000 x $50 = $7.15m, which is quite a bit of loose change to find down the back of the couch, or equally likely, within Nicola’s rainy day fund for when bad things happen.
But what about the additional revenue the government is taking in as a result of the price rises, and I’m not talking about Road User Charges, but simply GST.
As Chris Hipkins said on RNZ yesterday, “If you do basic maths, they're looking at about $3 million a day extra in GST revenue … so based on current fuel volumes, if you were looking at a dollar a litre increase, that's about $3m extra a day they're taking in GST revenue.”
Hmm, that $7m in support each week doesn’t sound so generous when you factor in an additional $3m in GST per day.
If you started on Monday morning, that support would be paid for by lunchtime on Wednesday, and for the rest of the week, it’s all cream for the government. They are making money from the fuel crisis, even after you factor in the support package.
Our government thinks that local council spending should be capped, but what about the GST on fuel? Why not also cap that? That way, everyone who uses fuel would benefit, like support workers who need to travel to see patients, are not well paid, and who simply cannot absorb the extra costs.
Needless to say, Nicola Willis was holding on tightly to the increase in revenue, claiming that the GST take was “likely to be offset by reduced use of fuel, but also reduced spending elsewhere in the economy as Kiwis adjust their budgets”.
This, despite offering no evidence that petrol consumption had fallen at all, or that people were spending less on other things to pay for fuel.
But surely, if you think people will need to cut spending on other essentials like food or energy to pay for their fuel, that’s a clear sign that more support is needed.
The Greens respond.
Green Party co-leader Chlöe Swarbrick was disappointed that there was no encouragement for public transport use.
Her co-leader, Marama Davidson, said, “The Government showed today it is not prepared to match the scale of what people are facing and the crisis New Zealanders are dealing with. The situation demands far more than what was announced today.”
To that end, the Greens proposed their own plan, which included “free public transport, direct relief for everyone earning under the median income, increased mileage for care workers, more school bus services and a windfall profits tax.”
Now that is a support plan. I agree with all that the Greens have suggested.
Mind you, I thought we should do those things even before the fuel crisis, along with other measures to wean us off our fossil fuel addiction.
Blaming others.
David Seymour offered a familiar tune, blaming the last government, and whining, “The previous government spent all the money, and while we are still cleaning up that mess, it limits our ability to respond to new pressures. That means any support we provide now must be disciplined, affordable, and carefully designed.”
Despite the fact that debt has continued to increase under the coalition, which somehow manages to deliver less while spending more:
Whether it’s support workers who can’t afford to get to their jobs, prices that are going to escalate beyond what people can afford, or food banks that can’t keep up with demand, this is a time when the government needs to take significant action to intervene, but unfortunately, their support package is pretty much the bare minimum they could’ve done.
Overseas, a number of countries are taking things far more seriously:
This week, Spain rolled out a €5 billion ($9.9 billion) plan that reduces the value-added tax (VAT) on petrol from 21% to 10%.
In Portugal, a temporary reduction has resulted in savings of up to 7.3 euro cents (14.5c) per litre.
Price caps on fuel have been extended this week in Croatia - €1.62 ($3.22) per litre for regular petrol, and €1.73 ($3.43) per litre for diesel.
Taiwan uses a “price-smoothing” mechanism to keep gas prices low, absorbing about 60% of price increases. They also offer targeted fuel subsidies for the fishing sector (14%) and the agriculture sector (50%).
The Brazilian government has introduced a temporary suspension of federal taxes on diesel.
Surely our government could do more to help.
One of these days, it would be nice to write something without thinking back to how much better things were under Jacinda Ardern and Grant Robertson and how much better off the country will be when this coalition is gone.
Today is not that day, but I’m really hopeful it will come in November.
This morning on Gaspy NZ, the average price for a litre of unleaded is $3.38. To put that in context, it is cheaper to subscribe to Nick’s Kōrero for a whole year than it is to buy 20 litres of petrol. Your support allows me to keep much of my writing accessible for those who simply cannot afford to pay. ❤️
Have a good Wednesday, folks. It sounds like some stormy weather is on its way, and I don’t mean economic, so hunker down and stay warm and dry.
Ngā mihi,
Nick.
To conclude today, here’s Amy Winehouse with 'Help Yourself':
This Government seems to very much favour the "ambulance at the bottom of the cliff", but just like our poor fire appliances it's an ambulance that keeps breaking down and won't be able to help everybody.
Rather than seeing this as a storm to be weathered it would be nice for politicians to be seeing this as a warning sign as to how fragile our dependence on imported fuel is - the whim of a mad king, a natural disaster, an Asian economic downturn not to mention the Climate Crisis. It's not as if we don't know how to make things more resilient and the time to start was yesterday.
The Greens put that proposal several days ago (as well as advocating for years sensible actions to deal with the climate crisis) and have not had the courtesy of a response from the government. The current CoC are utterly unfit to govern.