New Zealand Boosts Support for Working Families Amid Rising Fuel Prices

A bill providing additional temporary support for low-to-middle income working families amid rising fuel prices driven by the Middle East conflict has passed its final reading in Parliament today, Revenue Minister Simon Watts says.

The conflict in the Middle East is directly resulting in higher prices at the pump, putting additional pressure on Kiwi households, Mr Watts says.

That’s why the Government added an amendment to the Taxation (Annual Rates 2025-26, Compliance Simplification, and Remedial Measures) Bill to provide timely, temporary, targeted support to working families most impacted by rising fuel prices.

From 7 April, about 143,000 working families with children will get an extra $50 a week through a boost to the in-work tax credit. A further 14,000 working families will receive a smaller payment.

This support is carefully targeted at families in the squeezed middle – parents who are working hard, not eligible for main benefits, and raising kids on modest household incomes, Mr Watts says.

The Bill also includes measures to remove tax barriers so New Zealand businesses can attract more investment and talent.

The Government wants to grow the economy, so households and businesses have better opportunities here at home, Mr Watts says.

We have revised the thin capitalisation rules to make New Zealand more attractive to overseas investors, especially for infrastructure projects.

Thin capitalisation rules limit deductions for debt that foreign investors can claim on their New Zealand investments. These rules prevent income being shifted offshore and protects our tax base.

But these rules can sometimes go too far and discourage investment, particularly for the capital-intensive infrastructure projects that are typically funded by large amounts of debt.

The changes introduced by this Government makes sure our rules strike the right balance.

The Bill also includes a range of other measures to help attract and retain capital and talent, such as: Allowing new migrants and returning Kiwis to be able to use a new taxation method that taxes realised returns rather than estimated gains.

Helping startups and listed companies by improving the rules for employee share schemes to allow more flexibility on when tax must be paid.

Allowing digital nomads to stay longer before being taxed, making New Zealand a more attractive place to visit and spend money.

These changes ensure New Zealand remains an attractive place to work, invest, and raise a family, Mr Watts says.

By supporting working households and strengthening our tax settings, the Government is building a future where the economy is stronger, businesses can grow and Kiwis have more opportunities.