Editorial: July 1 changes - households will feel the cost of living pinch as fuel costs surge

Motorists queued up to fill their tanks at Costco in Westgate ahead of the petrol tax discount ending on July 1. Photo / Dean Purcell

EDITORIAL

Pinch and a punch for the first of the month.

The pinch is coming to households with fuel tax and full-priced public transport fares reinstated for those aged over 25 from July 1, and the punch may well follow for the Labour Government in the next opinion polls once the squeeze is being felt.

The blows are part of a swathe of changes that also include a total ban on plastic straws, parental leave payment increases and new rules on child support benefits.

But it is the back pockets that will feel lighter due to the end of the fuel tax discount, adding 25c a litre and almost 4c extra GST. The subsidy for road user charges for diesel vehicles also ends, while half-price public transport fares will stop for most, with only children under 13 riding for free, while half-price fares for community services card holders and people under 25 will remain.

Opposition parties will be ready to drive home a message that profligate Government spending and ideological pursuits have left us with little than moths in our purses. There’s no doubt the Government has spent heavily to ease the cost of living pressures (about $2 billion on reduced fuel tax and road users charges, and $142 million for the half-price public transport).

The good news, as Liam Dann pointed out earlier this week, is recent falls of around 6 per cent in the global oil price may soften the blow on our wallets and cushion the impact on Labour’s popularity stakes.

Will it be enough to spare this Government? The next few polls will tell us whether this really will be a cost-of-living election.