Treasury advises Government to consider long-term view when weighing up fuel relief
Thursday, 19 March 2026
The Treasury’s chief strategist has bluntly appealed for the Government to weigh up the effect of providing fuel-tax relief on government debt.
During a speech in Auckland, Struan Little said Treasury’s 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”.
Little made the comment in the wake of confirmation from Finance Minister Nicola Willis that she was considering “timely, temporary and targeted” measures to directly assist households most impacted by, and least able to avoid, the rising price of fuel.
Willis said the Government was “moving very quickly” and would provide any support through “existing mechanisms”, rather than creating a new method for providing assistance.
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“I have already instructed the Inland Revenue Department to work on some options together with Treasury, and I can confirm that we’re looking at the tax and transfer system,” she said.
On Monday, Willis said she had in mind “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 as there is not a bus available for her at that time and who is facing acute income pressure”.
Little said the situation in the Middle East looked likely to test the resilience of the economy.
Countries’ ability to “get through and recover from situations like this” was helped by having the fiscal headroom to borrow or to “absorb the inevitable costs that come with a shock”, he said.
“The current situation is a reminder that New Zealand’s considerable economic and fiscal challenges in the medium and long-term are at least as important as the short-term challenges,” he said.