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Fuel, alcohol costs to go up from today

The increase today in the taxes on fuel, road user charges and alcohol is being called a tone-deaf move. The government is being criticised for the increases amidst the Covid-19 downturn.

The excise tax is going up 3.5 cents to about 70 cents per litre of fuel. Photo: RNZ / Dan Cook

Motorists will have less in their back pocket today if they have to fill up - the excise tax is going up 3.5 cents to about 70 cents per litre of fuel.

People on the streets of New Plymouth said it is not fair.

"I don't mind the booze going up but the rest of it stinks," Ross said.

"I guess you've got to get the money from somewhere but equally it's probably not the time to increase costs on what is already an expensive commodity that they already get a fair bit of revenue from," Malcolm said.

Chris Carr is a fifth-generation transport operator with Carr and Haslam - which has 70 trucks making deliveries nationwide.

He said the 5.3 percent increase on road user charges is tone-deaf - and while he might be able to pass on the increase to his customers - other trucking companies may not.

"They don't understand that it is a government tax - that we are collecting tax on behalf of the government - they see it as an increase in cost from a carrier and just reject it out of hand ... so that means that a lot of carriers will end up paying for this out of their own pockets and [it] will probably threaten their viability," he said.

Road Transport Forum chief executive Nick Leggett said he asked Transport Minister Phil Twyford to stop the road user increase going ahead because of the Covid-19 pain.

Leggett said the excise taxes went into a pool of money that did not get fully spent.

"The truth is that the National Land Transport Fund that those user charges go towards remains underspent - so it's very difficult to see in a time of real economic pressure and hardship for many that this additional cost will go on businesses and their customers," he said.

But Twyford said that money was desperately needed as the country recovered.

"We need the increase ... now more than ever - our government's totally focused on the economic recovery - if we were to stop those increases going through now it would take $2 billion out of the transport budget - at the very time that we are trying to invest in infrastructure to boost jobs," he said.

It's not only fuel and road user charges going up today - alcohol is too.

Brewers Association executive director Dylan Firth said the increase mirrored the inflation rate before lockdown and that was tough to handle.

"With the CPI (consumers price index) ... increasing by 2.63 percent based on a measurement that was made in March before the Covid-19 lockdown and economic downturn that we've seen with it ... it's effectively $29 million out of the sector," he said.

Also from today paid parental leave is being extended to 26 weeks, along with tinkering to simplify superannuation and veterans' pension schemes.

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