The Greens want free buses; Treasury wants fiscal restraint; and one radio host thinks the government should help farmers, not working families, writes Catherine McGregor in today’s excerpt from The Bulletin.

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What the Greens are offering

This morning, the Green Party announced it is offering its votes to National to pass an immediate fuel crisis relief package – a fossil fuel crisis, it emphasises. With their combined 63 votes, no other party’s support would be needed. The package includes free public transport for three months (at a cost of approximately $143.5m), a targeted relief payment for adults earning under the median income and those living rurally, a windfall profits tax on fuel companies, reversal of changes to school bus eligibility and routes, restoration of Total Mobility Support for disabled people, and increased mileage rates for the country’s 23,000 care and support workers.

Green co-leader Chloë Swarbrick, who has written to prime minister Christopher Luxon with the offer, said the package was designed to help people “through this immediate crisis” while reducing fossil fuel dependence. “Free public transport is a no-brainer. We remove the barriers to access, reduce congestion, and free up fuel supply for those who don’t have a public transport option.” Co-leader Marama Davidson said the relief payment would target those “being squeezed the hardest and those with few other transport options”.

Targeted, timely, temporary

None of this is likely to eventuate, but the outlines of the government’s own approach are becoming clearer. As Vernon Small writes in the Sunday Star-Times (paywalled), the government has set very narrow limits around the shape of any relief package. “The three-in-one chant is for a solution that is targeted, timely and temporary.” That almost certainly means using the tax-and-transfer system, likely via the in-work tax credit or the independent-earner tax credit.

Finance minister Nicola Willis has spoken of helping “the mother potentially living in South Auckland, who has no choice but to use her car each day to get to her cleaning shift at the airport” – a signal that there will be an income cut-off, with beneficiaries and superannuitants likely excluded.

A debate over design

The debate over who the package should target – and how it should be funded – has been heating up. The Taxpayers’ Union, unsurprisingly, says any support must be funded through spending cuts, not borrowing. Treasury’s own chief strategist, Struan Little, made a similar argument in a speech last week. As The Post’s Tom Pullar-Strecker reports, his advice was “not to let the price of ‘91’ at the pump today distract us all from the cost of net core Crown debt tomorrow.”

Canterbury radio host John MacDonald, in a take republished on Newstalk ZB, argues the government is “going about this fuel price rescue package the wrong way” by focusing on lower-to-middle income earners. Instead, he says, it should be supporting food growers, manufacturers and the transport and logistics sector – businesses that pass fuel costs on to consumers. Any savings handed directly to households will be “cancelled out” by rising prices at the supermarket checkout, he says.

Hold your nerve

Writing in a paywalled column for the New Zealand Herald, Liam Dann argues for perspective. Despite all the current upheaval in the Gulf, Brent Crude is trading around US$107 a barrel, making him sceptical that prices could double from here – which is about what would be required for us to see 91 unleaded at $4 a litre nationwide.

His bigger concern is “the risk that Kiwis catastrophise our way into a self-fulfilling downturn.” Overly pessimistic forecasts drove excess stimulus during Covid – “something we have paid for dearly in the long run”. Dann isn’t denying that the next few months could be rocky. “Things may yet get worse before they get better,” he writes. “But if we take a breath, step back and look at the scale of problems we really face, I think we’ll be okay.”

Related:

• The government says it has seven weeks of fuel in reserve. (NZ Herald)
• A very useful – but non-official – dashboard of current petrol, diesel and jet fuel reserves, plus live shipment tracking (NZ Fuel Reserves Monitor)
• Donald Trump posted yesterday that he’s giving Iran 48 hours to open the Strait of Hormuz or he will “obliterate” its power plants. (Stuff)