Petrol tax to rise 6c a litre

BY COLIN ESPINER, POLITICAL EDITOR
Last updated 05:00 17/03/2009

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Petrol taxes will rise 6c a litre under the Government's plans to build more roads.

Yesterday, Transport Minister Steven Joyce unveiled a near-$1 billion fund to fast-track state highway projects.

The project will be part-funded through a national petrol tax, which will add 3c a litre to the price of all grades in October and another 3c in October next year.

Joyce has scrapped plans to allow local authorities to levy regional petrol taxes. That means councils in Auckland and Canterbury will no longer be allowed to use taxes as a way of raising funds for local projects.

Environment Canterbury had considered a 5c tax, and Auckland a 14c tax.

The previous Labour government had planned to increase petrol taxes by 1.5c a year.

However, the tax increases make up only $283 million of the $1b fund. A large proportion, $420m, comes from cuts to other transport budgets, including public transport, walkways, and cycleways.

The balance will come from an additional $258m out of the Government's capital allocation to land transport over the next two years.

Canterbury regional transport committee chairwoman Jo Kane said cuts to public transport subsidies were a concern as the region's transport programme was committed to promoting public transport.

"One size doesn't fit all, and Canterbury lends itself very easily to public transport," she said. "For Canterbury, we will still have our national state highway projects but our whole local share is actually reliant on getting people off the roads and into passenger transport, and it's working."

The draft regional land transport programme 2009-19 has $1b worth of projects planned over the next decade.

The committee had explored a fuel tax to bridge a $184m funding shortfall but now faced a "bidding war" to secure Government funding.

Joyce could not say how much was being cut from the budget for public transport.

However, he said the area had enjoyed big increases in funding in recent years and it was time that road users had their share.

"Public transport is still getting very good growth. It's just not going to get as much as it would have done under Labour," Joyce said. "But 84 per cent of New Zealanders go to work by truck, car or motorcycle."

However, the Government has committed to the electrification of Auckland's passenger-rail network.

It will be paid for, and operated by, KiwiRail essentially the taxpayer rather than through Auckland's proposed regional petrol tax.

Joyce said regional petrol taxes would have been costly to administer and unfair.

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He admitted, in some cases, that could mean Christchurch drivers were helping fund Auckland roads.

However, all regions would get a share from the new national tax, he said.

Decisions on which roads would be built and a timetable rested with the New Zealand Transport Agency.

However, the Government would make its preferences clear. They included Christchurch's southern motorway. He said $10.7b would be spent on roads in the next decade.

Labour transport spokesman Darren Hughes said the plan was unfair on most New Zealanders who would share the cost of electrifying Auckland's rail system and building its roads.

"The tragedy is that detailed plans, which had been worked through with Aucklanders and which would have seen Aucklanders taking control of their own transport destiny, are being tossed glibly out the window.

"There is another tragedy too. The Government is again showing its absolute preoccupation with roads at the expense of public transport, walkways and cycleways."

Green co-leader Jeanette Fitzsimons said the plan would make New Zealand more oil-dependent and increase carbon emissions while doing nothing to solve traffic problems. "This is the way to solve our transport challenges from a blueprint dated from the 1950s."

- © Fairfax NZ News

38 comments
Post a comment
Murray   #38   12:36 pm Mar 18 2009

The milieu of commentary is about whether, over the years, Aucklanders have paid petrol taxes which have benefited other regions more than themselves, or vice versa, and who it is that knows what they are talking about.

The fact is that there are many benefits to all of us as a nation (and for the planet) if the reliance on fossil fuels is able to be diminished.

Not least of these is New Zealand's balance of payments deficit.

The regional fuel tax enabled the marginal pricing of fuel to encourage the use of alternatives to consumption where these were available.

The replacement regime has removed $420 million from public transport funding.

Silly "them and us" nonsense such as "it was time that road users had their share" is not going to do anyone any good.

Rosie   #37   05:18 am Mar 18 2009

Nice comment #8 - with auckland so synonymous with power cuts recently why provide an even bigger burden on the power grid lol. Seems like we'll be paying to upgrade their power station next - maybe they should put a toll on the bridge between rich and poor cause it's certainly getting longer!! cheers national

Kevin   #36   09:37 pm Mar 17 2009

This will probably be the first of many tax increases National will impose to help pay for the income tax cuts they promised and said were affordable.

jake the snake   #35   08:24 pm Mar 17 2009

Good - but not enough. Tax it more. Cars pollute the air, cause congestion, road rage, boy racer problems, a sense of entitlement that is unhelpful to community living - and they kill so many people! Bring back public transport, bikes and good walking spaces. Keep cars to a minimum and we will all be much better off.

alex   #34   05:35 pm Mar 17 2009

"C'mon Kiwi's lets just get on with fixing this country and bringing us up the OECD rankings - back to wealth and prosperity. Its bloody hard out there and frankly National can't do any worse than Labour did in 9 years" In reply to Timmys above statement I have to say what a bunch of rubbish, under the previous labour government we had budget surpluses, record low unemployment and economic growth whereas under the previous right wing govt of ruth richardson and roger douglas we had rising govt debt, asset sales,high unemployment, stagnant economy and NZ still dropped down oecd rankings! Lastly in times of recession why is the national govt raising petrol taxes, sacking public servants (making unemployment worse) and no stimulus package of any sort. This is at odds to the proactive approach to managing the recession undertaken by Australia, China, UK, USA and europe.

Random   #33   04:04 pm Mar 17 2009

You have to be a complete and utter moron if you think this means the rest of the country will be paying for Aucklands roads. Considering Auckland contributes more than 1/3 of NZ's tax intake we are subsidising the rest of you!

Regionalising all taxes and government spending would be fantastic for Auckland. Doubly so because we'd get to laugh at all the idiots with tall poppy syndrom crying now.

Arch   #32   03:05 pm Mar 17 2009

The Labour Government were going to increase petrol 3 cents a litre over the the same period anyway.Inland places like Queenstown and Wanaka are already paying up to 6 cents a litre more than the metropolitan areas and they are going to be lumbered with another 6 cents. No wonder they are up in arms. It would be fair to all if petrol was the same price over the whole country. It may be a small increase overall but the inland areas would not be penalised to the same extent.

scuba steve   #31   01:43 pm Mar 17 2009

80% of petrol already is TAX we dont need anymore on it on top of that registration is also 1 big TAX and aside from this if the money is going towards things like trains why aint the train commuters fitting the bill??? Road users already have to pay enough for roads with a TAX on a TAX on a TAX so why should we have to pay for trains as well??? we dont ask the train commuters to pay for our roads do we???

patrick   #30   01:24 pm Mar 17 2009

@ #25 quite frankly Matthew I think you're full of it.

Sure the country needs good roads, but only where roads are the most efficient way to meet the transport demand Taking Into Account Population Density And Journey Distance. To move people in cities, the most efficient way to do this is by public transport and/or cycle/pedestrian lanes.

In the rural sector, roads and automobiles are the most efficient way to go, again due to journey distances and population density. Also you will find that the roads require less maintainence as they are used less.

You will find that what annoys people from other parts of the country the MOST is not as much that they have to spend money in Auck so much as they seem to repeatyedly make the same mistake. Might as well have a tax dollar fueled bonfire.

Murray   #29   01:09 pm Mar 17 2009

"Joyce said regional petrol taxes would have been costly to administer and unfair."

Could he elaborate?

There is a statement from a North Shore mayor in this morning's NZ Herald, giving his "heartfelt thanks to people in the provinces for their generous contribution towards sorting out Auckland's transport problems".

To not endeavour to regionalize the funding for major transportation projects is totally "unfair".

Costly....? Well, there are existing systems for petrol tax, road tolls and road user taxes etc.

John Key mentioned the price of petrol changing at the Bombay Hills. Well, don't have borders with high marginal changes. With modern computer graphics it would be easy enough to map all the retail outlets. It would be easy enough to determine "a spread" for the new transportation asset and have the levy high near the asset and "fading away" with low marginal differences between neighbouring outlets. The levy would be centrally collected and applied to projects as it is now, but there would be much more "fairness".

Steven Joyce made a comment the other day about the elderly "cottoning onto the free public transport available with their SuperGold Cards and the likelihood of consequent increased subsidies in the future". The elderly are not stupid. They are well aware of their SuperGold Card benefit, but most of them choose to drive their cars.

The other very important aspect with the application of marginal rates of fuel tax is that it encourages the use of the asset for which it is paying. The farmer or person in the countrytown has no option but to drive to the city for supplies once a fortnight, or so. The person near to the asset has an option to use it.

And who is paying for these discounts on fuel that large supermarkets are able to offer with the purchase of groceries - 10c per litre I saw on a Countdown sign yesterday?

Joyce is showing typical National Party ignorance and churlishness when he says, "it was time that road users had their share".

If that isn't an ignorant "them and us" to the country's detriment, then I have never heard one.


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