Plastic straws out, fuel tax in: How are we faring one year on from 2023's changes?

Prescription fees, single-use plastics, public transport and fuel taxes all changed on July 1 last year.
Prescription fees, single-use plastics, public transport and fuel taxes all changed on July 1 last year. Photo credit: RNZ / Illustration / Nik Dirga.

By Susan Edmunds, Money Correspondent

This time last year, a lot was changing.

Prescription fees and plastic straws were out. Cheaper public transport was in.

But one year on, where have the changes left us? We've broken it down.

Prescription fees

The Labour government removed the standard $5 prescription charge from July 2023. It returns this July.

How much it benefited households over the past year is hard to pinpoint. Neither Te Whatu Ora Health NZ nor the Ministry of Health keep records of prescriptions that have not been collected, so it is unclear whether the removal of the fee prompted more people to claim their prescriptions.

The removal was estimated to cost the government $618.6 million over four years.

But Council of Trade Unions policy director Craig Renney said the change did not necessarily mean households would be paying that amount instead.

"Some households never paid it to begin with because many don't pick up prescriptions. Some people don't pick up the prescriptions because of the fee and if you take it off they start picking them up - the net loss is not the same."

Fuel tax

The fuel tax returned in full on 1 July 2023, adding about 29 cents a litre to drivers' bills.

Since then, petrol prices have fluctuated but this week, the price was about the same as it was when the tax returned.

Outside Auckland, where a further fuel tax applied, the price of 91 has been as low as about $2.70 a litre before discounts are applied, and as high as just under $3.

Infometrics chief executive Brad Olsen said that was a lot higher than it was pre-July 2023, and a lot of drivers would have liked to see the tax cut continue.

"But it's just such an expensive policy it was literally being borrowed for at the time," he said.

"It's frustrating to hear [politicians criticise] borrowing for tax cuts - we borrowed for petrol relief at a time when we think the climate is burning. I'm fine with politicians throwing stones but should they not look at what they did themselves in the recent past?"

Plastic ban

From 1 July 2023, a ban came into effect on single-use plastic straws, plastic plates and cutlery, takeaway containers, plastic produce bags, and non-compostable plastic produce labels.

At the time, there were suggestions this could mean added cost for some businesses, such as takeaway shops.

However, Restaurant Association chief executive Marisa Bidois said her members were supportive of the change, and any added costs had turned out to be "minimal".

"Some businesses will pass these costs on to their customers, while others will absorb them.

"As an industry that relies heavily on discretionary spending, businesses are very mindful of the current cost of living challenges, although as these products are more mainstream now the price differences are likely to be minimal if at all."

Half-price public transport scheme

The half-price public transport scheme came to an end on 1 July last year.

That meant those over 25 had to pay full price again, although fares for children under 13 remained free and those aged 13-24, Community Services Card holders and Total Mobility users continued to enjoy half-price fares.

Olsen said there had been no discernible increase in public transport use because of the fare reduction.

Data showed that through the period where the 50 percent discount was in place, the number of public transport trips was still down compared to 2019 in both Auckland and Wellington.

From July 2022 when it started, Auckland travel was down between 19 percent and 44 percent, and travel was down by 6 percent to 52 percent in Wellington

"Evidence that seemed to come out from agencies suggested it didn't do a lot to support better public transport outcomes," Olsen said.

"It was purely making it cheaper - it didn't increase massively the number of people taking public transport. If we want to achieve that we need other changes to improve the frequency and reliability.

"It might be cheaper, but if it shows up at the right time, for a lot of people that's a larger consideration."

The government has since put an end to cheaper fares for 13- to 24-year-olds and free travel for those aged five to 13.

Clean car rebates

Changes were made to the rebate scheme, which lifted fees for higher-emitting vehicles and changed the rebates available for zero-emissions imports.

The scheme was closed at the end of 2023.

Infometrics chief forecaster Gareth Kiernan said the scheme had an effect on the types of vehicles being sold.

He said shortly before each time the scheme was adjusted, there was a spike or dip in the registration of various types of vehicle as people either brought forward or delayed their purchases, depending on whether they were going to become cheaper or more expensive the next month.

"It's clear that the [scheme] had an effect on people's behaviour. However, it's not the only driving factor, and it's interesting to note that so far this year, registration patterns have gone back more towards the April 2022 to June 2023 period than the pre-Clean Car Discount period.

"This response could reflect sustained high petrol prices, making people more conscious of fuel efficiency and therefore more likely to choose conventional hybrids than they were previously.

"It could also reflect an increasing supply of hybrid vehicles available, as manufacturers change their mix of production, and there is a growing supply of hybrid used vehicles becoming available from Japan as well."

He said the introduction of road user charges for plug-in hybrids and electric vehicles had also changed the costs of running those, compared to petrol and other hybrid vehicles.

"It's also important to note that, although the Clean Car Discount was aimed at increasing uptake of electric or lower-emissions vehicles, it did nothing to change New Zealand's country-wide carbon emissions profile.

"Because New Zealand has a cap set in terms of its carbon emissions, which is designed to be met by the Emissions Trading Scheme, any reduction in emissions from the vehicle fleet simply mean there was less demand for carbon credits from the petrol companies, reducing the trading price for the credits under the scheme, and making it cheaper for other polluters to purchase those credits.

"If the government had wanted to have a real effect on emissions, it needed to reduce the supply of carbon credits in line with the faster update of lower-emissions vehicles."