Government to consider future of cost of living payment

<p>The government may opt to keep its <a href="https://www.1news.co.nz/2026/06/23/cost-of-living-crisis-deepening-for-many-kiwis-researcher-says/" target="_blank">cost of living</a> payment for a little longer, despite one of the triggers to end the payments likely to be met.</p> <p><b>By Giles Dexter of </b><a href="https://www.rnz.co.nz/news/political/811878/government-to-consider-future-of-cost-of-living-payment" target="_blank"><b>RNZ</b></a></p> <p>The deputy prime minister, who argued for the four-week test in the first place, is supportive of <a href="https://www.1news.co.nz/2026/03/16/govt-flags-potential-cost-of-living-relief-no-fuel-tax-cut-amid-iran-war/" target="_blank">keeping the payments</a> for now, in case recent lower prices have turned out to be a blip rather than a return to normal.</p> <p>But David Seymour says if it is a return to normal, then it is time for the payments to end.</p> <p>Since April, 143,000 families have been able to receive support through a $50 boost to the in-work tax credit (IWTC).</p> <p>The support has been designed to cease after 12 months, or until the price of 91 petrol drops <a href="https://www.1news.co.nz/2026/04/03/how-long-will-it-take-for-fuel-to-drop-below-3-again/" target="_blank">below $3 a litre</a> for four consecutive weeks, whichever comes first.</p> <p>Prices dipped below $3 in late June, and on Tuesday morning fuel monitoring website Gaspy reported the average price of 91 had returned to $3 exactly.</p> <p>The finance minister has hinted that, given the "s-shape in which prices have gone up and down", the relief will stay.</p> <p>On Monday, Nicola Willis said she had received three weeks of official data, and would get data for the fourth week on Wednesday.</p> <p>"We anticipate that will show fuel prices below $3 for the week previous, which will trigger me to take advice to Cabinet on what we do with the scheme going forward," she said.</p> <p>"However, officials have advised me that, given the significant increase in international fuel prices in the past few weeks, they are anticipating that the fuel price in future weeks will have <a href="https://www.1news.co.nz/2026/07/15/fill-up-now-fuel-to-climb-again-amid-renewed-us-iran-conflict/" target="_blank">spiked up</a> above $3 again."</p> <p>ACT leader David Seymour supported holding onto the payment in case the lower prices turned out to be a "blip" instead of a return to normal.</p> <p>"The policy says we have to make a decision if it goes four weeks under $3, and that leaves some leeway for a scenario where this ends up being the only four weeks for the rest of the year where the price is under $3. I don't think we should get rid of it in that case," he said.</p> <p>"But let's see. Give it another week, and if it starts to look like we're going to be under $3 for a long time, then it's time to save money for the taxpayer and end this policy that was there for dealing with high fuel prices."</p> <p>Documents released by the Treasury earlier this month showed initially, the government was only considering the 12-month package.</p> <p>The one-year increase to the IWTC was estimated to cost $373 million. It would cost less if the four consecutive weeks of fuel under $3 happened before then.</p> <p>Seymour said it was ACT that got the four-week rule over the line.</p> <p>"In a few weeks we will know, was this four weeks a blip or was it a return to more normal prices? If it was a blip, we'll be glad that we didn't abandon the policy prematurely. If this is hopefully a return to more normal prices, then the only thing to do is to cease this payment and save the taxpayer hundreds of millions of dollars."</p> <p>Labour MP Kieran McAnulty said people needed help, and Labour supported the relief staying in place.</p> <p>"We're criticising them for not doing enough, but we're not going to ask them to take away the sole standing thing that they have done."</p>