Show me the small change: The U-turns and sweeteners shaping election year

Sunday, 14 June 2026

Dr Vernon Small is a former Labour government adviser and journalist

OPINION: Two weeks after the Budget skated around it, the cost-of-living crisis is back in sharp political focus this week.

To be fair, the Government did earmark a $450 million Budget “contingency” to address cost pressures from rising fuel prices – a move that simultaneously allowed it to cry restraint and “no room for lolly scrambles” while stashing a small mound of sweeties in the corner to be tossed around closer to the election, or in response to any lolly-hurling from the other side.

Read more:

• A $20 ticket to the suburbs: Labour targets commuters with first big policy play

• Election 2026: Labour to introduce caps on public transport costs for cities, regions

Labour’s policy to cap the weekly cost of public transport fares, at $20 in our three biggest cities and $10 elsewhere, drew National immediately into signalling some of the $450m could go towards public transport assets – but not a further subsidy on fares.

Cost uncertainties aside - and Labour insists it has done the maths right to come up with $65m a year - the party’s first major policy announcement since 2025 was smart retail politics.

It would leave a significant chunk of vote-rich Auckland’s less-well-off commuters – and their families – with $30 a week more in their pockets while appealing to Labour-leaning Green voters across the country (and the especially strong Green vote in Wellington).

Media soundings with the public have found little opposition, other than some scepticism about the ultimate cost.

There is an argument that it would add another impost to the already massively overstretched land transport fund, which is kilometres away from being able to meet its remit to fund from user-pays road, rail, walking, cycling and public transport projects without huge top-ups from other tax revenue.

But the fare for Labour’s policy is only $65m – double it, even, if you don’t trust the costings – from within the oceans of billions needed to pay for all the projects Labour and National have in their pipelines. The fare subsidy could hardly be to blame for crimping other public transport spending or road building; its annual cost would fund less than a kilometre of motorway, by the measure of the $1.8 billion being spent on the Waikato expressway extension. More a “show me the small change” than “show me the money” moment.

Officials have also questioned how targeted such a fare subsidy would be. Which is fair enough, in as much as it does not tie the subsidy to need or the ability to pay. But then neither did the Government’s $50 a week fuel-crisis top up to families with children.

As a generality, lower-to-middle-paid suburban commuters tend to live furthest away from the central city, where houses are more affordable, so they will benefit most.

Nor is there a risk of a major equity outage.

It’s hard to envisage a stampede to bus stops by multi-millionaires wanting to cash in on the fare savings, leaving the marque languishing in the garage.

Meanwhile, National’s brazen U-turn on an electricity levy (tax?) to fund the White Elephant in the room – its $1b-plus LNG import terminal - was cut from similar cloth; where the cost-of-living meets vote-harvesting.

Back in February when the plan was announced, funding it from a levy on consumers’ power bills was deemed the fairest way by Ministers. It would spread the cost across the entire sector, and the big players could not be expected to stump up the considerable costs of building it and keeping it available. And in any case the levy would be less than the money consumers would save from a reduction in the “dry-year risk premium” built into power prices – so they would be net better off.

But now, four months closer to the election all that has gone.

A number of factors no doubt played into the back-track.

Faced with Opposition attacks on the “tax” on electricity users (driving up prices even further, after an 11.7% increase in the March quarter) the Government was on a hiding to nothing.

NZ First has been making hay among National voters and its robust stance on energy policy, particularly by Deputy Leader Shane Jones, has been one of the vectors for that.

With the cost of living as important, or more important, electorally as it was in 2023, new Energy Minister Simeon Brown - who is also National’s campaign manager - would hardly have relished campaigning on a levy that would push up household power bills.

Considering the Government’s enthusiasm for the levy back in February, you had to cringe at Brown’s comments that “Kiwis have been paying the price for an energy system run on the edge through higher bills and greater risk of shortages”. And that responsibility for keeping the lights on “sits squarely with the electricity sector, and that is the principle guiding our decisions on funding.”

Shades of NZ First’s strong talk aimed at the electricity gentailers.

And then the killer.

“Kiwis can be certain of one thing – it will not be funded by a levy on power bills”.

Now, backing down was, like Labour’s fare cap, good retail politics.

But it creates its own “show us the money” moment over how the LNG import terminal will be funded, even with a delay until 2028.

Brown has said options include “engaging with the gentailers on a fair funding model” with a “regulatory backstop” if those talks don't succeed.

It would be no surprise if the Government had to provide some support, even as an interim measure.

But with less than five months to run until the election, an unpopular impact on the cost of living has been avoided.

And that must be priority one.

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