Photo: Illustration / Nik Dirga
Explainer - The cost of living is set to rise for New Zealanders today, as several tax cuts and subsidies end, but other changes to prescription costs and child support payments may have a more positive impact.
Many new regulations and changes kick in as of 1 July, from the petrol pump to the chemist.
Long queues formed at many petrol stations yesterday, ahead of the end of the fuel-tax discount of 25 cents a litre.
Half-price public transport for people over 25 has also ended, although children under 13 will ride free and those aged 13-24, Community Services Card and Total Mobility users will still get half-price fares.
New Zealand Post is raising its prices today, while alcohol excise tax rates are going up by 6.6 percent.
And the restaurant industry warns the cost of takeaways is set to rise, with the ban kicking in today on single-use produce bags, plates, cutlery and straws.
The government said it is easing the pain with other measures, including the removal of $5 prescription charges, which also comes into effect today.
An Auckland petrol station was deserted this morning after the petrol prices went up. Photo: RNZ / Bailey Brannon
Bigger bill at the pumps
A budgeting specialist says the spike in fuel and transport prices is going to hurt those already struggling.
The government's fuel-tax subsidy ended at midnight, and means motorists will pay about 29 cents per litre more at the pump.
Māngere Budgeting Services chief executive Lara Dolan said fuel is one of the highest costs for families.
"Our clients currently spend between $50 to $120 per week on their petrol, which is approximately 15 percent of their weekly income.
"Most of our clients are already in financial hardship, so an additional increase will put them further into hardship."
Dolan said public transport is not a reasonable alternative for families.
At NZ Post, which is struggling with a continued drop in mail delivery, prices will rise for many services, with the cost of a standard letter rising from $1.70 to $2.
Parental leave increase, child support changes
In another change for families, parental leave payments will increase by 7.7 percent from today, to reflect the 7.7 percent rise in the average weekly earnings.
The maximum weekly rate for eligible employees and self-employed parents will increase from $661.12 to $712.17 gross per week.
The government has also changed the law on child support meaning solo parents will benefit by a median $20 a week.
Previously child support payments were taken by the government and used to offset the cost of the benefit paid to the parents.
Now, more than 41,000 sole-parent families will have that money re-directed to them.
Minister for Social Development Carmel Sepuloni said this means sole parents will get an average of $65 per week of child support.
Sepuloni said some of the poorest whānau are sole parents.
"It used to be that if you were a sole parent beneficiary and you didn't get the child support from your ex, and so therefore you couldn't benefit from that extra money.
"It was discriminatory, actually. We finally got rid of it."
She said the government has taken action to right an unfair policy that dates back to 1936.
Families will see the change in their child support payments from 22 August.
An expert on family policy said the law change on child support is a step in the right direction but is not without flaws. Penny Ehrhardt said as the extra money will be considered income, some parents will lose access to other support.
"You might get $20 more but then you might find that you lose your accommodation supplement, for example, which with prices in rentals is absolutely key to surviving, so you will not necessarily be $20 better off."
Ehrhardt said the law change is logical and will make the system better but more can be done to address poverty for single parent families.
Prescription changes 'history making event'
A pharmacist is calling the end of the $5 prescription charge today a history-making event that will make a massive difference to peoples' lives.
The cost-of-living measure was announced in this year's budget.
Sanders Pharmacy owner Gemma Perry said every day in every pharmacy in New Zealand, people do not pick up their prescriptions because they cannot afford the fee.
"People will say to us, 'Which one do I get, the pain relief or the antibiotics?'
"It's a really hard decision to make when someone's really unwell and one's going to help them right now and the other one's going to actually fix the problems."
Perry said pharmacists can now focus on advising people on their health care, instead of on coaching people through making incredibly tough financial decisions.
Easier pathway for Aussie emigrants
New Zealanders who have been living in Australia for four years can apply for a direct citizenship from today.
The Australian government announced the pathway in April.
Since 2001, New Zealanders in Australia were been allowed to stay indefinitely, but gaining permanent residency or citizenship had been difficult.
Chair of advocacy group Oz Kiwi Joanne Cox said the major reform will make people feel like they belong in the country they have chosen to live in.
"For too long New Zealanders have been treated as second-class citizens and without that access to a fair, affordable pathway to citizenship it was really, not only discouraging, pretty, I'd say, discriminatory, but also of course, great disenfranchisement.
Australians have had a direct citizenship pathway in New Zealand for five years, but Australia had failed to return the favour until now.
