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In yesterday’s Budget, Finance Minister Grant Robertson committed $814million for a $350 per person cost-of-living payment for people earning under $70,000 a year.
About 2.1 million New Zealanders will be eligible for the $27 a week payment over three months from the start of August.
Mr Robertson said the Government needed to protect New Zealanders from the immediate impact of cost-of-living pressures.
Shoppers spoken to yesterday by the Otago Daily Times welcomed the payment.
Arrowtown woman Jo Scott was shopping at Countdown Andersons Bay yesterday and said it was "outrageous" how much the cost of food had gone up.
Yesterday’s shop cost her $75 on "just a few things" to get her through.
She said the payment would be a "big help".
Another shopper, Ann Cottrell, of Dunedin, said the payment would be "marvellous".
She spent just over $140 on essential items which she hoped would last her about 10 days .
Mrs Cottrell could not remember how much she usually spent a week, but knew it was a lot less than yesterday’s shop.
The extra $27 a week would go a long way to helping with the increasing prices, she said.
The Government also extended the fuel excise duty and road user charges cut for another two months.
Six months ago, it would have cost him between $70 and $80 for a full tank of fuel.
Yesterday, it cost him $125 — "it’s actually insane".
Extending the excise duty was a "very good thing", he said.
University of Otago department of economics senior lecturer Dr Murat Ungor did not think the cost-of-living payment would add extra pressure on inflation.
However, it could do if landlords or supermarkets saw it as an excuse to put prices up.
The payment would be mostly spent on food, rent and power by people on lower incomes, he said.
Polson Higgs tax partner Michael Turner said the payment was "pretty much" a tax cut.
It represented a 0.50% tax reduction for someone earning $70,000 or 0.73% for someone on $48,000 a year.
"It looks like a tax cut when it’s not," he said.
It was unusual for IRD to be administering such a payment, he said.
The Government also introduced urgent supermarket legislation as part of the Budget to ban covenants over land as a barrier to supermarkets accessing new sites and restricting competition.
Easing the rising cost of living
- New temporary cost-of-living payment of $350 over three months for people earning up to $70,000 a year.
- Fuel excise duty and road user charges cut to be extended for two months.
- Half-price public transport extended for further two months.
- 26,500 more insulation and heating retrofits for low-income homeowners.
- Urgent Budget-night legislation introduced to remove barriers to new retailers entering the grocery market, to help bring prices down.