Mike's Minute: A gesture, or an actual economic solution?

How many ways can you slice the petrol handout? 

Many. 

The Government is to be commended on restraint, and I hope that message of restraint has sunk into the New Zealanders who think we have money on trees and debt is never to be paid back. 

And for those who think Hipkins, Robertson, and Ardern were economic geniuses, Fitch have provided the wake-up call.  

The bill on interest alone for our debt is heading towards $10 billion a year. We have no room to move. 

We commend them too on the $370 million coming out of the operating Budget. In other words, no new borrowing. 

But its downhill from there I'm afraid. 

$50 a week for a year, or until 91 octane is at $3 or less for four weeks. 

In that random mechanism is the weakness of not only government, but relying on government. 

What's targeted about $50 for certain people based on the fuel price? How many of those people getting $50 drive an EV and their fuel bill is unaffected? 

How many don't use much fuel anyway, no matter what the cost? What about the city dwellers who walk a lot? 

I drive 12km a day, so 60km a week. If I do 10L per hundred, that's six litres. That's $35-45 a week for fuel. 

I'm winning. The Government is giving me free money that pays for my fuel bill. That's nuts. 

The people affected by fuel are the people who travel the distance. It has nothing to do with income. It's miles, but a government can't hand out money in that way. 

So how targeted is this actually? Yes, low incomes are affected in greater percentage terms when prices rise, but only if the price is a major for you. Petrol might be more expensive, but it's only a burden if you use a lot of petrol. 

Money is going to people who we have no idea whether they actually need it, because the mechanism that drives the support is all wrong. 

But what are they to do? 

The truth is this is the best of a series of bad options. Cap the fuel tax? A lot of people argue that. Sure, then millionaires get Ferrari's full of gas cheaper. 

It is the weakness of having a populous who has come to rely on government too heavily. 

Itches are scratched for political ends, not economic solutions. 

This looks more like a dartboard gesture than an actual economic solution. 

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