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Speaker 1: You're listening to a podcast from Newstalk Z'B. Follow this

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Speaker 1: and our wide range of podcasts now on iHeartRadio.

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Speaker 2: The government is rolling out a fifty dollars a week

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Speaker 2: in work tanks credit in two weeks time to help

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Speaker 2: people hardest hit by petrol price increases. Roughly one hundred

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Speaker 2: and forty three thousand families with children will get the boost,

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Speaker 2: costing an estimated three hundred and seventy three million dollars

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Speaker 2: if that lasts for the full year. So it will

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Speaker 2: continue for the year, or until the price of ninety

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Speaker 2: one drops below the three dollar a liter for four

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Speaker 2: weeks in a row. Gareth Kennon heads up the forecasting

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Speaker 2: team at Infometrics and joins us now Gareth, Good afternoon.

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Speaker 3: To you afternoon.

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Speaker 2: So on your view, is this a prudent intervention from

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Speaker 2: the government.

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Speaker 3: Yeah, pruden is probably the right word. I mean, it's

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Speaker 3: you know, you're talking one hundred and forty three thousand families.

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Speaker 3: You know, it's ten percent of the population probably who

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Speaker 3: are going to benefit or be touched by this policy

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Speaker 3: and extra payment going out. I mean, the government has

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Speaker 3: started from a position where you know, they did want

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Speaker 3: it to be targeted. They did want it to be

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Speaker 3: temporary entirely than those are the words have been given

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Speaker 3: also starting from a position of course where they had

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Speaker 3: ratings downgrade over the weekend, so they will have been

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Speaker 3: a conscious they don't want to go rushing out and

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Speaker 3: spending a lot more money. Given the attitude that the

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Speaker 3: ratings agencies are taking at the moment.

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Speaker 2: Getting a lot of techs over the last hour gareth

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Speaker 2: from people saying why couldn't they look at cutting the

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Speaker 2: fuel excise tax? So as Nicola willis correct that if

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Speaker 2: they did go the universal option and look at that

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Speaker 2: fuel tax on the government side, would that be inflationary.

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Speaker 3: Potentially inflationary in terms of, you know, enabling people to

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Speaker 3: get out and continue spending more at a time when

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Speaker 3: there are already obviously cost pressures coming through the system.

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Speaker 3: I think the biggest issue around the fuel excise duty though,

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Speaker 3: is that you are helping everyone out, and you know,

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Speaker 3: while everyone is feeling the pain at the moment, some

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Speaker 3: people are feeling it a hell of a lot more

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Speaker 3: than others, and so I think, you know, trying to

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Speaker 3: limit it to sort of lower and middle income people

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Speaker 3: is much more appropriate than putting forward a fuel exis

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Speaker 3: duty cut which we saw a few years ago. And

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Speaker 3: you know when Frankly, my household, my sort of income,

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Speaker 3: we don't need that assistance. Yes, we don't like paying

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Speaker 3: more fuel, but we can afford to do it.

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Speaker 2: Do you think the government could go a little bit

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Speaker 2: further than what they've done today, Gareth, if this situation

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Speaker 2: continues that there's some groups arguably who need it, like

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Speaker 2: rural communities with no public transport, industry that relies on

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Speaker 2: vehicle fleets and fuel of struggling at the moment. Could

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Speaker 2: that be a real potential that is eyed up in

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Speaker 2: the near future.

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Speaker 3: Yeah, I'd be reluctant to go down the industry route.

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Speaker 3: I mean, you know, businesses have an ability to potentially

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Speaker 3: pass on those higher costs if they need to in

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Speaker 3: some regards, and we have seen a little bit of

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Speaker 3: I guess almost industry wealthare corporate welfare policies over the

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Speaker 3: last twelve to twenty four months in some regards anyway,

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Speaker 3: So I don't think we necessarily need more of that.

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Speaker 3: The rural community question is an interesting one because you're right,

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Speaker 3: they don't have the public transporter access to that, but

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Speaker 3: it is also potentially one that's difficult to really target

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Speaker 3: particularly tightly. But yeah, look, let's be honest, the longer

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Speaker 3: this crisis drags on, the longer the war drag soon,

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Speaker 3: the more pressure that will be on the government to

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Speaker 3: potentially do more.

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Speaker 2: And tough timing for the government and Nichola willis. The

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Speaker 2: budget is two months away, Gareth, and has that ring

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Speaker 2: true that when she mentioned it's going to cost three

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Speaker 2: hundred and seventy three million dollars if that policy is

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Speaker 2: in place for a year, But that has already been

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Speaker 2: factored into the Treasury's fiscal forecast, which gives her that

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Speaker 2: regal room come maye.

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Speaker 3: Yeah, I was a little surprised when I read that.

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Speaker 3: I mean, the government does always have some operating allowance

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Speaker 3: in terms of its spending that it has in each

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Speaker 3: budget going forward. Usually by the time you're getting through

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Speaker 3: to March or rapful, most of that allowance has been

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Speaker 3: allocating in various places. So I'll be interested to see

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Speaker 3: how they sort of make those numbers work when the figures,

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Speaker 3: you know, the budget comes out in a couple of

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Speaker 3: months time. But I don't have to believe or out

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Speaker 3: a word.

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Speaker 2: Yeah, it's going to be very interesting when we see

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Speaker 2: that may budget. Gareth, thank you very much for your

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Speaker 2: time this afternoon, really appreciate it. We'll catch up again soon.

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Speaker 3: It's good to talk to.

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Speaker 2: That is Gareth Kennan. He is the head of the

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Speaker 2: forecasting team at Informetrics.

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