Cost of living relief package: Rotorua locals give their views

Some locals are unconvinced slashed fuel prices are sustainable but others welcome that and other relief measures - including one expert who says they are ''better than nothing''.

There were mixed reactions to the changes from people spoken to by the Rotorua Daily Post with experts saying attempts to decrease the cost of living will only provide short term relief.

On Monday, Prime Minister Jacinda Ardern announced that 25 cents of excise tax would be taken off at the pump and public transport fares halved, admitting there was a cost of living crisis.

"We cannot control the war in Ukraine nor the continued volatility of fuel prices but we can take steps to reduce the impact on New Zealand families," Ardern said.

The changes are for just three months at this stage. The fuel changes took effect from midnight on Monday and the public transport changes will come on April 1.

Rotorua motorist and hospitality worker Yolima Tavares Monterrosa believes the 25 cents difference is only "a temporary solution."

Rotorua motorist and hospitality worker Yolima Tavares Monterrosa. Photo / Andrew Warner

"[Petrol prices] are in for an imminent increase," Monterrosa said.

"This measure is not sustainable. What the Government needs to do is design strategies to stop the increase not something to keep people quiet for a couple of weeks."

Monterrosa previously told the Rotorua Daily Post she and her family of three have reduced the number of car trips each week so that they are spending a maximum of only $40 on petrol.

Rotorua resident Angela Sadler said she agreed with the measures which lowered petrol prices but she would also like to know, "where is all this money coming from?".

"You don't just give out money willy nilly. A lot of businesses are suffering so I'd like them to have some help."

Tearrific Bubble Tea business owner Chris Senerpida. Photo / Andrew Warner

Tearrific owner Chris Senerpida said any decrease in the prices "helped a lot".

"The price for petrol has increased so much and I drive a lot in the morning and in the afternoon," Senerpida said.

"So when I did a full tank a couple of weeks ago it hit me how expensive the gas is now."

Senerpida said the reduction in the cost of petrol, even if only for three months, would help both his business and his personal expenses.

Alongside the fuel tax cut, Ardern announced almost 60 per cent of families will get an increase to Working for Families of on average $20.

Superannuation will increase by $52 per fortnight for a single person and $80 for a couple, and benefits will increase up to a further $35 a week, from April 1.

Rotorua Budget Advisory Service manager Pakanui Tuhura. Photo / File

Rotorua Budget Advisory Service manager Pakanui Tuhura said the measures were "better than doing nothing."

"They will help. How much they will help will really depend on how the rest of the community reacts. That's a hard one to make a call on," Tuhura said.

"I think the main reason that fuel costs need to be reduced is so people can get to and from work.

"The point that I totally support is the targeting of low-income families that are the most vulnerable at the moment. I like the way the Government is thinking in this area."

Tuhura said he couldn't think of how else the government could help except perhaps to give people work they don't have to travel to.

"The proof's going to be in the pudding. If somebody takes those measures and abuses them by just taking extras money and spending it on things they shouldn't then obviously it's not going to go very far."

Rotorua MP Todd McClay. Photo / Andrew Warner

Rotorua MP Todd McClay said the measures announced by the Prime Minister were "not enough".

"It should have been done sooner," McClay said.

"There remains a cost of living crisis. [These measures] do nothing for the spiralling cost of food or rents that are out of control.

"I speak to a lot of people who cannot afford to pay the bills but pleas from households seem to fall on deaf ears."

Economist Brad Olsen. Photo / NZME

Infometrics senior economist Brad Olsen said the announced measures announced were more a "political reaction than an economic reaction" and the measures "lacked any targeting".

"This does seem like a band-aid in the economic space," Olsen said.

"There will be a cost-saving for someone filling up at the tank but households are still facing rising costs."

Olsen said the lowered prices at the petrol pump would mean money had to come from elsewhere such as the Covid-19 response fund which is funded by debt.

"The challenge for the Government going forward is if fuel prices continue to rise, will they go further?

"I think we need to go back to what the problem is here."

Olsen said the cost of living crisis would affect different groups in different ways.

"Lower-income households don't have a lot of fat to cut. They are doing it the toughest so it would be best to target [their needs]."

Otago University research economist Dr Murat Ungor. Photo / Supplied

Otago University research economist Dr Murat Ungor said the 25 cent reduction would provide relief to consumers "in the short run".

"Inflation is rising and expected to continue doing so due to both domestic and global factors.

"Inflation is going to be with us for a while."

Ungor said the situation in Ukraine was not getting any better and as a result oil prices had surged to US$139 per barrel in the last 10 days.

"There are a lot of fluctuations in the global oil market," Ungor said.

"There is this danger that 25 cents per litre might just get swallowed up by global oil price rises.

"So these measures, although proving a relief to many New Zealanders, may not be enough to tackle the cost of living crisis."

Ungor said declines in real wages and the quickly rising prices for goods and services were also concerning.

"Community-based strategies that aim to improve economic opportunity for all, with a focus on disadvantaged residents, can be emphasised more to improve the wellbeing of future generations."

Ungor supported the Families Package because it provided "targeted assistance".