December 11, 2023

What you need to know: Fuel tax increase, public transport cost hike for some, prescription fee removed

Prime Minister Chris Hipkins.

Costs will increase from Saturday for many New Zealanders who use public transport, while motorists will soon start to feel the pinch of the fuel tax discount ending.

But while the cost of getting around may be about to rise for some, children under the age of 13 will ride public transport for free and those aged 13-25 will continue to receive half-price fares.

A raft of changes made by the Government come into effect on Saturday, including the transport cost adjustments, the removal of the $5 prescription co-payment fee, tweaks to how child support payments are passed on and the banning of more plastic products.


The transport changes being made on Saturday include ending the half-price public transport fares for many New Zealanders.

In early 2022, the Government slashed the fares at the same time as it lowered the fuel excise duty by 25 cents per litre and made equivalent changes to road user charges (RUC). That came in the face of spiralling fuel prices off the back of Russia’s invasion of Ukraine.

The package of transport savings was intended to only last a few months but the reductions have been repeatedly extended by the Government to keep Kiwis’ cost of living down amid high inflation.

But it was never intended to be permanent. The Ministry of Transport estimated the cost of the reductions until January 31 had been $1.3 billion, while the latest extension announced in February until June 30 was estimated to cost about $718 million.

The half-price public transport fares finish on Saturday for many New Zealanders but there are some savings still to be had for some.

As announced in Budget 2023, public transport passengers aged between 5 and 12 will receive free fares, while they will permanently be half-price for those aged 13 to 24. Those with Community Service Cards and Total Mobility Users will also benefit. 

“This will make it easier for kids to get to school and provide relief to family budgets, saving up to $30 a week for the average household with two children,” acting Prime Minister Carmel Sepuloni said this week. 

“When half-price fares for under-25s and community services card holders and total mobility users are added together, barriers to taking public transport help tackle congestion and get Kiwis moving will be removed for 1.6 million Kiwis.”

The fuel excise duty reduction, which amounts to about 29 cents when accounting for GST, is also coming to a close on Saturday – much to the dismay of the Opposition.

“Not only will Kiwis be hit by the $15 extra to fill up the tank of an average car [but] the price hikes will likely hit sausage rolls, bread, butter – and other basic food items that Kiwi families are already struggling to pay,” National Party Finance spokesperson Nicola Willis said.

“The damaging follow-on effects of the price hike will likely be felt across the wider economy and hit household budgets hard.”

However, fuel prices are much lower now than when the reduction was first made. Then, prices were hovering around $3 as Russia’s invasion of Ukraine affected supply chains.

On Wednesday, according to Gaspy, the average price for 91 was $2.34 per litre and for 95, it was $2.54.

There have been long lines outside of petrol stations as people tried to fill up before the tax increased again.


To support New Zealanders’ getting easier access to medication, Kiwis will now have the $5 prescription co-payment financed by the Government. In Budget 2023, the Government set aside $619 million to remove the co-payment. 

“This will benefit a huge range of people including almost 770,000 New Zealanders over the age of 65 who received prescription medicines in the community last year,” Health Minister Ayesha Verrall said in May. “This Government is ensuring our health system provides equitable access for all New Zealanders, so they can get the health services when and where they need them, irrespective of where they live,” Dr Verrall said.

Single-use plastics ban kicks in 

Time is up for a range of single-use plastic products, with a Government ban on single-use drinking straws, tableware and cutlery, and produce bags taking effect on Saturday.

The Ministry for the Environment said ending the use of these products – which are in addition to the 2019 single-use plastic shopping bag ban – said moving away “from hard-to-recycle and single-use plastics will help reduce plastic waste, improve our recycling systems and protect” New Zealand. 

“After July 1, 2023, the manufacture, sale or distribution of single-use plastic produce bags, and plastic plates, bowls and cutlery will be banned,” the ministry said

“By banning these items, we are taking practical steps towards a low-waste future and healthier environment.”

All businesses were legally obligated to comply with the regulations, the ministry said.

“The Ministry for the Environment will first work with businesses to ensure they understand their obligations, however, penalties apply for non-compliance.   

“We will generally take an educational approach and offer advice to help businesses understand their responsibilities.” 

According to the ministry, it would take enforcement action “where appropriate”.

“Parties that contravene the Waste Minimisation Act 2008 may face prosecution and, if convicted, fines of up to $100,000 per offence,” it said.

Child support payments

Single-parent families will get a median gain of $20 per week.

After a Bill that was voted in by Parliament earlier this year, child support collected by Inland Revenue (IRD) will be passed directly on to parents on a sole parent rate of the main benefit. 

Previously, child support payments were collected and used to offset the cost of the benefit paid to parents.

“The first payment to receiving carers will be made on August 22 as child support payments are made the following month, as long as the liable parent makes their payment on time,” IRD said.  

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