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Election 2026: Government set to decide on fuel tax hike as deadline passes
🇳🇿 New Zealand /Elections & Politics

Election 2026: Government set to decide on fuel tax hike as deadline passes

From NZ Herald · () English

Translated from English and summarized by DistantNews. Read the original for the full story.

At a glance

News Named sources New plan
  • New Zealand’s Government is expected to decide whether to delay fuel tax and road-user charge increases scheduled for January 2027.
  • The decision needed to be made by August 31 so Treasury could include it in forecasts for the Pre-Election Economic and Fiscal Update.
  • Labour has pledged to cancel the increases for the next parliamentary term, while Finance Minister Nicola Willis warned that transport funding and construction jobs could be affected.

The Government is expected to settle a politically sensitive fuel tax question after the deadline for including the decision in Treasury’s election-year forecasts passed.

We will not be increasing fuel tax on the first of January next year. We just need to formalise that decision and reflect it in the government accounts.

— Nicola WillisThe finance minister described the Government’s position while noting that a formal Cabinet decision was still required.

Prime Minister Christopher Luxon and Transport Minister Chris Bishop were expected to announce the Cabinet decision at a post-Cabinet press conference. Bishop previously told Labour transport spokesman Tangi Utikere that a decision was needed by August 31 for inclusion in the Pre-Election Economic and Fiscal Update, due on September 29.

Finance Minister Nicola Willis said last week that the Government would not raise fuel tax on January 1 next year, although she said ministers still had to formalise the decision and record it in the government accounts. Fuel taxes are currently scheduled to rise by 12 cents a litre in January 2027, followed by increases of 6 cents in 2028 and 4 cents in 2029. Road-user charges would rise by equivalent amounts.

Kiwis should not be hit with higher fuel costs because this Government refuses to rule out a tax grab.

— Tangi UtikereLabour’s transport spokesman called on the Government to cancel the scheduled increases.

The issue comes with only nine sitting days left before Parliament is dissolved for the election and with a crowded legislative timetable. Labour has promised to block fuel tax increases throughout the next parliamentary term, a move it says would cost several billion dollars in lost revenue. Willis has challenged Labour leader Chris Hipkins to identify what spending would be cut to fund that commitment, warning that transport infrastructure funding supports construction jobs and businesses.

If he’s saying to every community in the country there will be less funding for your council to repair the roads, he needs to be straight with them about how many jobs will be lost, how many businesses will be destroyed, what a shudder that will put through our construction industry.

— Nicola WillisWillis argued that Labour’s pledge would require cuts to transport and could affect construction employment and businesses.
About this summary

Originally published by NZ Herald in English. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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