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Govt and Labour argue over rising costs

Contributor:
Fuseworks Media
Fuseworks Media
Clayton Cosgrove
Clayton Cosgrove

Feds pse Q for 0400

Wellington, May 25 NZPA - A row over rising costs has started, with Labour saying families are going to be hit hard by the budget and the emissions trading scheme.

Prime Minister John Key says that when the ETS comes in on July 1 petrol and power increases will only cost families about $3 a week.

"Is that an appropriate price for a household to pay for the environment...to me that feels about right," he said yesterday.

But Labour MP Charles Chauvel says power bills will add 5 percent to household power bills apart from electricity company hikes.

"This comes at a time of nil wage growth, continuing upward pressure on those on fixed incomes and forecast inflation of nearly 6 percent," he said yesterday.

Presbyterian Support Federation chairman Jim Pearce said the GST increase -- it goes up from 12.5 percent to 15 percent on October 1 -- would be a blow to struggling families.

"The Government says this budget is fair for everyone with income tax cuts and compensation for the GST rise for beneficiaries," he said.

"In reality though those on low incomes have no choice about spending on the essentials like food which will attract higher costs."

Mr Key countered Labour's ETS argument by saying if the previous government's scheme had been put in place it would have been twice as expensive for families.

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