The government is short of money. It has big spending commitments (a recession, an earthquake, the SCF bailout, on top of all the usual health and education and social spending stuff we expect it to do), but has slashed its own revenue base with tax cuts for the rich. It needs to raise more money to pay for its "roads of National significance" (which all oddly go to places Steven Joyce wants to go on holiday). So what does it do? Cancel the scheduled annual increase in fuel taxes. Instead, they'll make it up next year and in 2013 - when they're not facing an election.
Its a nakedly political move, which pretty obviously wouldn't be happening if there wasn't an election this year. But I guess it shows that Labour's narrative on the cost of living is getting to them. Still, I hope they'll enjoy eating it next time they plead poverty...
