The government has delayed the fuel excise hike that was planned for next year – and will use its fuel crisis rainy day fund to help pay for it.
Fuel tax had been set to increase by 12 cents in January next year – followed by another 6 cents in 2027 and another 4 cents in 2028 – for a total increase of 22 cents.
Ministers have agreed to instead stagger six-monthly hikes of 5 cents – beginning in 2028.
That means a total increase of 20 cents over the same period – but backloaded.
The government estimates that will cost it about $1.5 billion in lost revenue – which would have gone towards the funding of roads and public transport.
Cabinet has agreed to use its $450 million rainy day fund – created in this year’s Budget – to help cover that – and will find the remainder elsewhere.
– more to come