New Zealand’s government is trimming more programs so it can free up money to alleviate rising cost-of-living pressures, Prime Minister Chris Hipkins said.
(Bloomberg) — New Zealand’s government is trimming more programs so it can free up money to alleviate rising cost-of-living pressures, Prime Minister Chris Hipkins said.
The programs to be delayed or stopped include numerous transport projects and brings savings from reprioritization to about NZ$1 billion ($620 million), Hipkins said Monday in Wellington. Separately, the government said it will increase a range of welfare payments by the rate of inflation from April 1, meaning beneficiaries and pensioners will get a 7.2% lift in incomes.
Hipkins has declared the cost of living as his government’s number one priority ahead of an October general election, pledging to refocus on ways to relive pressure on households. Since taking over as prime minister in January, he has dropped a proposed merger of public radio and television while raising the minimum wage and extending a fuel-tax cut.
The two tranches of reprioritization announced so far will save about NZ$1 billion, “which will be reallocated to support New Zealanders with the cost of living,” Hipkins said. “It will give Ministers and wider government more bandwidth to deal with cost-of-living issues and the cyclone recovery.”
The government will save NZ$568 million by stopping the clean car upgrade scheme. It will “significantly narrow” a highway speed reduction program.
Hipkins also said the government will roll out transport projects in largest city Auckland “in stages,” including work on light rail connecting the central city and airport.
“Auckland Light Rail will happen in stages — with the first stage expected to be confirmed by the middle of this year,” he said. “Staging the rollout will align it with other critical transport investments, particularly the second Waitematā Harbour Crossing.”
The government is shifting to index benefits to inflation rather than the average wage to help an estimated 1.4 million New Zealanders cope with rising living costs, Hipkins said. Annual inflation was 7.2% in the fourth quarter whereas net average wages increased 6.2%.
Benefits to increase include job-seeker support, payments to sole and young parents, and pensions. The government will also increase tax credits for working families and increase student living allowances.
(Government corrects amount saved from clean car scheme in fifth paragraph)
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