Labour fueling cost of living crisis

National has ruled out any increase to fuel taxes in its first term.

A National Government will not increase petrol taxes in its first term, offering a clear alternative to Labour’s 12 cents per litre tax hike which will only extend the cost-of-living crisis, National’s Transport spokesperson Simeon Brown says.

“At the checkout counter and the gas station, Kiwis are feeling the pinch of the rising cost of living. National understands that Kiwi households are doing it tough, so we are ruling out any increases to petrol tax in our first term.

“Despite the cost-of-living crisis already fleecing hardworking New Zealanders, Labour has committed to increasing petrol taxes by 12 cents per litre, adding salt to the financial wound and inflicting more pain at the pump for Kiwi motorists.

“Once GST is taken into account, Labour’s 12 cent per litre tax hike will cost a family filling up a 60 litre vehicle an additional $8 per tank. Labour’s decision to impose a 13 per cent increase in road user charges for the heavy trucks which transport food to supermarkets would add $26,000 to the cost of operating a truck every year.

“Labour claims that these petrol tax hikes are needed to fund the transport projects they’ve cut and pasted from National’s transport plan, however National will deliver the transport infrastructure that New Zealanders need without increasing petrol tax in our first term.

“There is no need for Labour’s petrol tax hikes. Rather than adopting National’s plan to harness innovative funding tools, Labour is burdening Kiwi motorists with more tax hikes to fund transport projects they’ve failed to deliver in the past six years.

Labour would be fueling the cost of living crisis with their proposed steep increase to fuel taxes, most of which wouldn’t be used to improve roads and make them safer.

Far too many people are struggling to pay the current price. Far too many can’t afford the increases which come with the cost of oil and they certainly can’t afford another 12 cents in tax plus GST on top of that.

We simply cannot afford a Labour/Green/Te Parti Maori +/- NZ First.

The Taxpayers’ Union is right,  tell them no.

The Government has announced that they plan to hike fuel taxes by another 14 cents per litre. That is on top of the 29 cent hike that we have just had in July. Tell them no at https://t.co/xRbZqxLpU7 pic.twitter.com/2IFFxNtxq9

— New Zealand Taxpayers' Union (@TaxpayersUnion) October 8, 2023

 

Take a little less, add a lot more

Labour started the week announcing its intention to remove GST from fresh fruit and vegetables.

It’s a policy that would take a very little less from people’s weekly spending.

Yesterday it announced its intention to add 12 cents a litre to petrol and increase road user charges.

That would add a lot to people’s weekly spending – about $8 extra each time they filled their tanks.

Taking a little less in GST on the fruit and vegetables will complicate what is a relatively simple tax, be of most benefit to wealthy people and do least for the poor.

Adding a lot more cost to people through the fuel they use themselves and what it will add to the price of all goods and services that have a transport component. The wealthy won’t like that but it will hit the poor, and rural people, hardest.

Commenting on Labour’s transport announcement, Taxpayers’ Union Campaigns Manager, Callum Purves, said:

“Fuel taxes hit the poorest and rural communities the hardest who rely on their cars to travel and get to work. The announcement that fuel taxes would rise a further 12 cents under the Government’s plans will be a further slap in the face to New Zealanders who are already struggling with the cost of living.

“Despite tough talk on supporting those on low incomes, the Government has already put fuel taxes back up to a level where about half of the cost of filling up is paid in tax.

“Fuel taxes are justified to road users on the grounds that they fund road maintenance, but they are already being used as a slush fund to cover the costs of public transport and cycleway investment. Today’s announcement suggests that motorists are going to continue to be used as cash cows to subsidize non-road projects.

“The Government could fund significant levels of investment without increasing fuel taxes if it simply reverted the National Land Transport Fund back to what it was designed for – funding road maintenance and upgrades – or other user-pays forms of funding.”

Adding to the pain, if the tax increases the government will be taking more GST from fuel sales because it is imposed on the total cost, which includes the fuel tax.

How typical of Labour to take a little less in one area and a lot more in another.

This is yet another reason to make sure they are in opposition after the election and that means voting for a National-led government.

 

Taxing times

This is a very taxing time which is not the right time to increase tax:

National is calling on the Government to defer the 4c hike to petrol excise duty and road user charges scheduled for July 1 while its light rail project is on hold, Leader of the Opposition Simon Bridges says.

“Given the unprecedented economic pain this country is feeling because of Covid-19, the Government should give motorists a break rather than hitting them in the back pocket.

“The Government introduced three years of annual tax increases to pay for its beleaguered Auckland light rail pet project that has gone absolutely nowhere since Jacinda Ardern promised it on the 2017 campaign trail.

“Now that the Government has confirmed light rail is on hold while the Government deals with Covid-19, the tax grab scheduled for July 1 shouldn’t happen either.

We have been paying the extra tax for three years in which there has been no progress at all on the light rail project which was used as the reason for the extra tax..

“Kiwi motorists have already suffered enough under this Government. The tax hikes it has passed into law amount to a $1.7 billion tax grab, with Aucklanders the hardest hit because of their regional fuel tax.

“If the Government does not defer the July 1 petrol tax increase then it will be a clear signal that Labour’s plan to repay the massive debt it’s taking on is more tax.

“New Zealanders need to keep more of what they earn to cushion the blow of Covid-19. A National Government will repeal the Auckland Regional Fuel Tax and won’t increase fuel taxes in our first term.”

I filled my car with petrol on March 25th, a few hours before the lockdown was imposed. I didn’t have to fill it again until last Thursday and wondered as I did how big a hit the government had taken from less fuel used and therefore less fuel tax and GST.

Given the amount of tax levied on each litre it would have been significant.

The government will also be anticipating a lot less company tax and the most optimistic of forecasts are for big increases in unemployment which will result in less PAYE coming in and more benefit payments going out.

None of that is an excuse for another increase in fuel tax.

Almost all goods and services have a fuel cost component so an increase in fuel tax is an increase in production costs for just about everything. That is the last thing any business needs when so many are faced with the need to retrench at best.

An increase in fuel tax is also not what people need with recession a certainty and depression a probability.

It’s definitely not what the poor who will be hit hardest need.

Last week’s Budget had to feature a lot of borrowing but not nearly as much as it did.

It didn’t have a plan for helping the country out of the economic damage wrought by the lockdown and the government has given absolutely no indication it plans to be going through every single cent it spends to weed out the nice-to-haves nor does it appear to be asking any of its departments or ministries to make savings.

The alternative to that is more tax, a lot more tax.

The increase in fuel tax will just be the start.

 

 

Mixed messages

The government is sending mixed messages on fuel prices.

It’s imposed a carbon tax as part of its climate change strategy while it’s also criticising fuel companies for charging too much.

In doing the latter they are conveniently ignoring the fact that nearly half of the cost of fuel at the pumps is tax.

The Government’s fuel hoax in one graph. (Credit to @MBIEgovtnz and @dbseymour) pic.twitter.com/XK4LjSKL5f

— New Zealand Taxpayers' Union (@TaxpayersUnion) December 5, 2019

Cost of higher fuel tax

An extra four cent tax was imposed on motorists yesterday.

The direct cost is obvious – it will be more expensive to buy fuel.

The indirect costs won’t take long to take effect – higher prices for everything that has a transport component.

That will hit individuals, community organisations and businesses.

And for what?

. . .Half-way into the “year of delivery,” and all we’re seeing is key projects delayed, down-sized or discarded. The public are seeing noticeable asset deterioration at a rate we haven’t seen previously. It’s across New Zealand, Forum members advise, not just Auckland. . . 

Where’s the money gone? What exactly has it been spent on? Auckland transport users certainly aren’t seeing the benefits.

The rest of New Zealand isn’t seeing any benefits either.

We’re paying higher prices for fuel and getting less spent on roads.

Petrol pain pressures policy on hoof

The pressure from the pain of petrol prices has forced a government backdown:

National Party Leader Simon Bridges has welcomed the Prime Minister’s forced backdown on her regional fuel taxes, and called on her to overturn her excise increases and remove the regional fuel tax imposed on Aucklanders.

“After pressure from the National Party over her Government’s decision to impose more and more new taxes on record petrol prices the Prime Minister has today finally backed down and ruled out rolling the regional fuel tax out beyond Auckland while she is Prime Minister.

“This is in spite of her Government introducing legislation which would have enabled the 11.5 cent per litre regional fuel tax to be rolled out around the country from 2021. It has already been imposed on Aucklanders.

“Fourteen other councils had already started discussions with the Government saying they wanted the tax and will be surprised to hear about the Prime Minister’s backdown today.

“Her Transport Minister was also be surprised at his Prime Minister’s unilateral decision. This was forced policy made up on the hoof by a Prime Minister under pressure over her disregard for the costs her Government is imposing on New Zealanders.

Policy on the hoof is becoming a habit. This time it’s doing the right thing but it’s not a good way to govern.

“New Zealanders will be relieved. These taxes on top of record petrol prices are hitting them hard and pricing them out of their cars yet this Government was blindly forging ahead with new taxes because it can’t get its spending under control.

“The Prime Minister needs to go further, do the right thing and throw her numerous new taxes out completely. She should remove the regional fuel tax from Auckland as well as her first four cent national excise tax increase, and pledge not to impose any more new taxes.”

 She can cast blame on fuel companies but nearly half the cost of a litre of petrol is tax.

It was bad enough when all the money collected was spent on roads, it’s much worse now some is being spent on cycleways and public transport most of us will never use.

Who’s fleecing us?

Jacinda Ardern reckons fuel companies are fleecing us.

The Motor Trade Association says that isn’t so:

. . . MTA Chief Executive Craig Pomare says the biggest influences on prices at the pump are the landed refined price of petrol and diesel, taxes and the value of the NZ dollar against the USA dollar.

“Competition also has a big effect in New Zealand. It is well recognised that the deregulation of the market and the emergence of Gull, and other smaller independents such as Challenge and G.A.S. have affected prices in the areas where they operate. So too has the widespread use of discounting.”

Mr Pomare says the independent fuel retailers have minimal control over their daily pump prices.

“Most of these small businesses have contracts with the oil companies which give them very little wriggle room when it comes to setting their pump price.

“We take issue with the Prime Minister for suggesting that service stations, or oil companies are ‘fleecing’ motorists. Last year’s review of pricing by MBIE found no evidence of this. Like others in the sector, and the public, we support a further detailed market study to give us all more information on pricing structures.”

He says if the Government is seriously concerned, there is plenty of precedent for reviewing fuel taxes and either lowering them, or holding off on further increases.

Michael Barnett, chair of the Auckland Business Chamber has no doubt where the blame lies:

The tipping point for fuel consumers has been the blunt and ineffective fuel taxes imposed by local and central government. The margins identified by media today are less than most retailers would seek and have not changed.

It is worth noting:

• The major fuel companies welcome the proposed investigation from the Commerce Commission

• Of the 1,500 service stations in New Zealand, over 1200 are mum and dad running their small businesses, employing people and trying to make a profit. They deserve a return on the risk

• There are 20% more fuel providers than 5 years ago – does this signal a lack of competition?

The currency and additional Government taxes have created a price point consumers find unacceptable.

Consumers don’t only find the price unacceptable, Many also find it unaffordable.

The National Party has called for the tax increases to be dropped.

The Government should axe its fuel tax increases to provide immediate relief to motorists, Opposition Leader Simon Bridges says.

“Instead, the Prime Minister’s response to record high fuel prices is to announce yet another inquiry.

“She’s saying consumers are being ‘fleeced’ while her Government is driving up fuel prices and taking hundreds of dollars from Kiwi households through higher taxes on fuel.

“The inquiry will take months and any resulting changes could be years away. Meanwhile New Zealanders are paying record prices for petrol and the Government is collecting hundreds of millions of extra tax from them.

“Unlike petrol, talk is cheap. And the Government is a big part of the reason why petrol prices are so high.

“The importer margin, the profit petrol companies make on every litre of fuel sold and which the Prime Minister wants more information on, is 31 cents per litre and around the same as it was last year. The amount the Government makes is $1.25 – and that keeps increasing.

“The average New Zealand household is now paying $200 a year more in petrol taxes than this time last year, with Auckland families paying $324 extra as a result of higher petrol prices and this Government’s decision to hike fuel taxes. It’s pricing Kiwis out of their cars.

“There are a number of other reasons behind record petrol prices and National supports another look at the practices of fuel companies, something we also looked at in Government, but the Government should also be looking in the mirror.

“While the Government passes new legislation and waits for yet another report it should provide immediate relief to motorists by putting a stop to its relentless imposition of new taxes.”

This Government needs to realise it can’t keep heaping costs on New Zealand families, driving up the cost of living and making it harder to get ahead. pic.twitter.com/ZdP8lgeVK5

— Todd Muller (@toddmullerBoP) October 8, 2018

The Taxpayers’ Union agrees:

Taxpayers’ Union Economicts Joe Ascroft says “When the Government was legislating for fuel tax hikes, we argued that these taxes punish hard-working families – especially those that live in the city-fringe and are forced to commute for work. The Government should back the call from the Opposition and provide much-needed relief to family motorists who are struggling.”

“Now that National has called for fuel tax repeal, it must meet that commitment if it goes back into Government in 2020, 2023, or later. It’s easy to argue for tax cuts in opposition, but walking-the-talk in Government is much harder. The Taxpayers’ Union will be watching closely.”

Who is fleecing us?

The government that is taking nearly half the price of fuel in tax and worsening the pain by spending the increases not on roads but public transport and cycle ways most of us will never use.

$2.63 and rising

Is this the most expensive petrol in the country?

Regular petrol in Wanaka yesterday cost $2.639, premium was more than $3 and diesel was $1.999.

The lower value of the New Zealand dollar is contributing to the rising price, but so too is the government’s new fuel tax.

It’s supposed to be levied only in Auckland but it’s appears to be spreading throughout the country.

And whether or not the tax is spreading north and south of Auckland, the pain of higher fuel prices is being felt nationwide.

All goods and services have a transport component, when the price of fuel increases, it put pressures on every single thing that is transported.

And the virtue signalling about the environment is cold comfort for those of us who will rarely if ever use Auckland’s public transport and have no public transport available locally.

This will be a tax too far for many people.

A government that talks about caring about child poverty needs to act to reduce the costs their parents can’t avoid.

 

Paying more getting less

Petrol in Palmerston North on Tuesday cost $2.11 a litre.

In Kurow on Wednesday it was $2.30.

That’s hard to stomach when the four-lane highway that was planned for the very busy Christchurch to Ashburton section of State Highway 1 has been canned.

A little bit of the extra we’re paying is a result of higher prices for crude oil and the lower New Zealand dollar.

A lot of it is tax.

We’re paying more and getting less.

 

Poor pay less and more

Transport Minister Phil Twyford says the poor will pay less fuel tax than wealthier people.

He’s right in dollar terms but if he’s worried about the impact that’s not what matters, it’s the proportion of income that counts:

“Transport Minister Phil Twyford is either very brave or very stupid in arguing that fuel taxes are easiest on the poor,” says Taxpayers’ Union spokesman Louis Houlbrooke.
 
“He is doggedly focusing on the dollar impact of the fuel tax, and ignoring the cost as a proportion of total income.”
 
“It’s no surprise that rich people buy more fuel – they buy more of everything. But people on low incomes spend a far larger proportion of their income on fuel, meaning a tax hike will have a far bigger effect on their real quality of life.”
 
“It only takes five minutes to graph Twyford’s figures and see the real impact of fuel tax.”

Stunning propaganda from @PhilTwyford on fuel tax today. He argues it's not regressive. But his own data shows exactly the opposite: pic.twitter.com/LEbxrxiA5X

— New Zealand Taxpayers' Union (@TaxpayersUnion) June 27, 2018

“The verdict is clear: fuel taxes whack the poorest almost four times as hard as they whack the richest.”
 
“It’s stunning to see such selective ignorance from a centre-left Minister who is meant to understand issues of fairness and equality. Isn’t this stuff Labour Party 101?”

As David Farrar points out, the poor consume less of almost everything (except tobacco) but spend a higher proportion of their income on it

The cost of the fuel tax will be greater for higher income people but the poor will pay more of what they earn on it:

Now let’s look at the average incomes for each decile

• Decile 1 – under $23,900
• Decile 5 – $64,400 to $80,199
• Decile 10 – over $188,900

So the extra fuel tax as a percentage of income is:

• Decile 1: 0.52%
• Decile 5: 0.27%
• Decile 10: 0.14%

Let’s not forget it’s not just the direct cost that will hit the poorest hardest.

Every service and all goods with a transport component (and can you think of anything that doesn’t have one?) will be impacted by the tax and that will, sooner or later, lead to price increases, inflationary pressure and interest rate rises.

The Ardern/Peters/Shaw/Davidson coalition government, all parties in which purport to represent and work for the poor, is adding to the cost of living and making life harder for them.

And adding to that is yesterday’s announcement we’ll all be paying an extra 10.5 cents a litre over the next two years in excise tax.

P.S.

Michael Redell writes on regressivity, petrol taxes, and ministerial PR at Croaking Cassandra.

Thomas Lumley examines the issue at Stats Chat.

Sam Warburton tweets on it here.

 

Trust & confidence needed for investment

Who’s surprised?

New Zealand business confidence plunged to a seven-month low in June with retail most gloomy as costs, credit and capacity weigh on firms.

A net 39 per cent of 341 firms surveyed in the ANZ business outlook survey expect general business conditions to deteriorate in the coming 12 months, 12 points lower than May’s result and the lowest that measure has been since November 2017.

The survey has become a political football since the election as headline confidence has continued to weaken, with Finance Minister Grant Robertson saying he thinks it’s an issue around perception and the survey is not historically correlated with GDP growth.

Companies are also typically more downbeat about the broader economy under a Labour administration, and ANZ stressed today that business sentiment “is only one input into the decision-making that drives the economy” and “firms’ expectations of their own activity are a better gauge of future GDP growth.”

That measure was today down but remained positive, with a net 9 per cent of firms predicting increased activity in their own business, from net 14 per cent last month. . .

Businesses need trust and confidence to invest and grow, this government has shown little to foster either.

The captains’ call to halt future oil and gas exploration without consultation or warning; the fuel tax;  the prospect of employment legislation which will strengthen unions at the expense of employers and employees; an increase in strikes; the prospect of higher inflation and interest rates . . .

All this and more are disincentives to the investment which is needed for the business growth which secures and increases employment and economic prosperity.

 

How much more will you pay for food?

The fuel tax legislation the government has just passed to allow Auckland Council to compensate for the mayor Phil Goff’s inability to rein in costs will hit us all.

Taxpayers’ Union spokesman Louis Houlbrooke says:

“Aucklanders will get a rude awakening at the pump from Sunday, thanks to a big-taxing government bailing out a big-spending mayor.”
 
“The Government’s rhetoric about funding transport infrastructure is just a distraction from Phil Goff’s failure to deliver the Council savings that he promised. He’s saved around 0.3% in operational spending, when he promised to save three to six percent.”
 
“This fuel tax will hit the poorest hardest, especially those who live in outer suburbs and drive older vehicles.” . . 

It won’t just hit Aucklanders, it will hit us all because it will add to the cost of transport on all goods and every service.

But wait, there’s more bad news that will directly impact on the cost of food:

Confusion reigns after Labour passed its Regional Fuel Tax (RFT) law yesterday, says Horticulture New Zealand chief executive Mike Chapman.

“This tax comes into force in Auckland on Sunday, yet there is no system in place for off-road ‘behind the farm gate’ vehicles and machinery used by the 441 fruit and vegetable growers in Auckland that we represent,” Chapman says. “Growers should not have to pay the RFT for vehicles and machinery that are supposed to be excluded from this tax, yet on Sunday they will have to. We are talking about considerable numbers of vehicles and machinery used to produce healthy food for New Zealanders, both in Auckland and beyond.

“Having paid this tax that doesn’t apply to off-road use, because there is no exemption process, they will then have to go through a complicated and costly process to get a rebate on that tax. This is just not logical. The Government has spent seven figures developing a rebate system without ever talking to future users, or considering that they shouldn’t have to pay the tax in the first place.

“It makes no sense, nor is it fair, that this money will sit in a government bank account earning interest for at least three months, when it has been unreasonably collected before possibly being eligible for rebate. This tax is designed to improve Auckland’s transport system, and therefore must exclude vehicles not used on those roads. Food production also uses a lot of diesel-fuelled machinery that gets captured by this tax unnecessarily.

It’s not just fruit and vegetable growers that will be hit.  All farmers and fishers in the Auckland region will be hit by this and cost increases will spread beyond the region and that will inevitably lead to increases in the price of all food – fruit, vegetables, nuts, grains, fish, poultry, eggs, bacon, ham, pork, beef, lamb and milk.

“This process has been so rushed to meet Auckland Mayor Phil Goff’s announced 1 July deadline, that we feel that we have not been listened to and the full democratic process has been unnecessarily truncated – to the point Labour suggested the committee stage of the Bill did not even need to be debated, in the interests of time.

“This will affect growers’ businesses and costs considerably, to the point of hundreds of thousands of dollars a year. Those costs will be passed on to consumers, making healthy food more expensive at a time when many households are already struggling.

“We are not at all consoled by New Zealand First’s Shane Jones’ comments in the third reading debate of this Bill yesterday:

“That’s why we thoroughly endorse what the Minister said during the second stage when the House considered this bill. He is bringing forward, in short order, a body of work that will enable the inefficiencies and the areas that have to be refined in terms of a broad rebate system. It will deal not only to the challenges of implementing this particular impost, but also the entirety of the country.

So I say to the potato-growers, onion-growers, not only will I look forward to defending your elite soils, destroyed by Nick Smith under the last regime, but there will be an efficient process to ensure that people who feel that too much of the fuel that they’re purchasing with this impost they cannot claim back through a robust rebate system. So the bill does deal with that, and the Minister is going to go on to make further announcements.” – From Hansard.

“This will not happen by Sunday,” Chapman says. “We are very disappointed in this process. We can only hope that the ‘inefficiencies and the areas that have to be refined in terms of a broad rebate system’ will be dealt with using the same speed that was used to force this ill-conceived Bill into law.

“We do not want a rebate system, we want proper exemption. We do not believe growers should have to pay the tax in the first place and lose this money for a full three months before they can claim it back. It is ridiculous double handling, cost, and extra jobs for the public service to have to pay a tax and then claim it back. There is no logic, efficiency, or fairness in that.” 

Fine words don’t feed families and this tax, rushed through parliament will make it harder still for those already struggling to put healthy food on their tables.

The government is crowing about the help it’s giving with its Families Package and winter fuel payment but that will be no compensation for the increased costs of everything because of the fuel tax.

Increased costs will fuel inflation which in turn will put pressure on interest rates which will put more pressure on prices . . .

The fuel tax will fuel a vicious cycle of cost increases which will hit the poor hardest, all because Goff and his council can’t control their spending.

11.5c + 3-4c = more poverty

Petrol was $2.22 a litre when I filled up my car yesterday.

That’s expensive and it’s going to get worse:

Aucklanders will be hit with a 11.5c a litre rise as soon the regional fuel tax comes into effect on July 1, with petrol companies saying they will be passing the full increase on.

And there will be more pain when prices rise by as much as 4c a litre again on October 1 if the first round of three national fuel excise increases is implemented following a policy statement announcement at the end of June.

The Government has indicated the increase will be 3-4c every year for three years. . . 

A tax of 11.5 cents now and 3-4 cents in a few weeks will add up to more poverty.

Aucklanders might face the highest price increase but it will affect all of us one way or another because at least some of the price rise will spread throughout the country.

Every trip everyone makes in a petrol-fueled vehicle will cost more and so too will every trip everything everyone buys, and everything that goes into everything everyone buys.

The price rise might encourage some to forgo private transport for public, but public transport doesn’t serve everyone in cities and there are no passenger trains and local buses outside cities and you can’t put goods and services on trains and buses.

The price rises will fuel inflation which will put pressure on interest rates which will put more pressure on prices which will further fuel inflation . . .

And who will be hardest hit by that?

It’s always the poorest.

Auckland needs better roads but had mayor Phil Goff kept to his promise of finding 3-6 percent efficiencies across the Council budget, this tax would not be needed.

For the sake of us all, Aucklanders must come up with a viable alternative who could beat the incumbent at next year’s election to save us from another three years of tax and spend.

Fueling inflation

The headline said As fuel prices hit record high, govt mulls tax cut.

That was in India.

Prices are high in New Zealand too but the tax will be going up.

The AA’s weekly fuel price report last week noted:

Another increase in fuel prices, the second in a week, this time led by Z, with all fuels up 4 cents per litre. This brings the ‘national’ price of 91 octane to $2.30/litre, the highest price ever recorded – in nominal terms that is; as we note below, we’ve paid much more in real terms when you adjust for inflation. Plus the tax on petrol has now broken through the $1/litre barrier. And all this before Auckland Council is due to introduce a 10cpl regional fuel tax in July, and the Government a 3-4cpl increase in petrol excise later this year.

Why have prices risen 23cpl in the last 2 months? International refined commodity prices have risen over 16% since the last price cut in February due mostly to geopolitics, while the NZ dollar has fallen nearly 5c against the US$.

Petrol tax is already more than $1 a litre. It will go up three to four cents for all of us later in the year and Aucklanders will face another 10 cent/litre tax from their council.

It’s hard enough accepting more than $1 in fuel tax when it was going on roads. It will be even harder to swallow when it’s going to be spent on public transport in Auckland.

The government has been telling us about how it’s helping the poor.

With fuel prices rising and tax on top of that, they will be giving with one hand and taking with the other.

Everything we buy is transported. If the fuel price rises so will everything else and that will fuel inflation and it’s always the poor who are hardest hit by that.

Let’s (not) tax this

The National Party has updated its election tax advertisement as it works to counter the government’s fuel tax grab.

The National Party is highlighting Labour’s double whammy of national and regional fuel tax increases by launching an advertisement to illustrate the costs faced by consumers and a petition to encourage people to voice their opposition, National’s Transport Spokesman Jami-Lee Ross says.

“These taxes will hurt consumers in the pocket. As well as the direct impact on what you pay at the pump, they have an effect on most other products you buy, and that really adds up,” Mr Ross says.

“The Government’s plan is to hit consumers twice, firstly in Auckland but also around the country.

“The net result is motorists paying up to a massive 25 cents a litre in more tax – that’s $15 every time you fill up the car.

“And the regional fuel tax legislation makes it clear that other regions are expected to be paying for regional fuel taxes even though Labour said they wouldn’t be able to.

“People will end up paying more and getting less. This is particularly so in regional New Zealand where the nationwide petrol tax increase is paired with a big decline in state highway investment.

“Regional New Zealanders are being made to shell out for new trams down Auckland’s Dominion Road.

“People are angry on this one. The Government needs to rethink its approach and ease up on the cost increases on Kiwis.

“They claim they are worried about people’s incomes and then they hit them with this.”

The three parties in government claim to be determined to help the poor.

Any increase in fuel tax will hit the poorest hardest and more than counter any gains they might have made through increases to the minimum wage or government payments.

You can sign a petition against the tax here.

Fuel tax increase canned

Some good news for tough times:

The planned fuel tax increase of 1.5 cents per litre which was due to come into effect on 1 July has been deferred while economic conditions remain tight, says Transport Minister Steven Joyce.

The increase was part of a package of changes agreed to by the government in March 2009, designed to make the funding of New Zealand’s land transport system simpler and more efficient.  The package included the cancellation of the economically inefficient regional fuel taxes and their replacement with smaller national increases.

Mr Joyce says given the ongoing economic impact of the global recession and the Christchurch earthquakes, it makes sense to hold off on the increase for another year so as not to add further costs to the economy.

This is a temporary reprieve but we can be grateful for small mercies when we get them.

February 25 in history

On February 25:

138 The Emperor Hadrian adopted Antoninus Pius, effectively making him his successor.

1570 Pope Pius V excommunicated Queen Elizabeth I.

1778 José de San Martín, Argentine general and liberator of South America, was born.

 

 

1793 George Washington held the first Cabint meeting as President of the United States.

 

 

1797 Colonel William Tate and his force of 1000-1500 soldiers surrendered after the Last Invasion of Britain.

 

Carregwastad Head, the landing site for Tate’s forces

1836 Samuel Colt received an American patent for the Colt revolver.

1841  Pierre-Auguste Renoir, French painter, graphic artist and sculptor, was born.

1845 George Reid, fourth Prime Minister of Australia, was born.

1861 Rudolf Steiner, Austrian philosopher and educator, was born.

1870 Hiram Rhodes Revels becamethe first African American to sit in the U.S. Congress.

1873  Enrico Caruso, Italian tenor, was born.

1890 Dame Myra Hess, English pianist, was born.

1890  Vyacheslav Molotov, Soviet politician, was born.

1901 Zeppo Marx, American actor, was born.

1901 J.P. Morgan incorporated the United States Steel Corporation.

1908 Frank G. Slaughter, American novelist, was born.

 

1912 Marie-Adélaïde, the eldest of six daughters of Guillaume IV, becomes the first reigning Grand Duchess of Luxembourg.

1917 Anthony Burgess, English author, was born.

1919 Oregon placed a 1 cent per U.S. gallon tax on gasoline, becoming the first U.S. state to levy a fuel tax.

1921 Tbilisi, capital of the Democratic Republic of Georgia, was occupied by Bolshevist Russia.

1925 Glacier Bay National Monument (now Glacier Bay National Park and Preserve) was established in Alaska.

1928 Charles Jenkins Laboratories of Washington, D.C. became the first holder of a television license.

1932 Adolf Hitler obtained German citizenship by naturalisation, which allowed him to run in the 1932 election for Reichspräsident.

1933 The USS Ranger (CV-4) was launched, the first US Navy ship to be built solely as an aircraft carrier.

1935 Sally Jessy Raphaël, American talk show host, was born.

1941 February Strike: In occupied Amsterdam, a general strike was declared in response to increasing anti-Jewish measures instituted by the Nazis.

 De Dokwerker in Amsterdam remembering the February strike

1943 48 Japanese prinsoners and one guard were killed in the Featherston Prinsoner of War riot.

 

1943 George Harrison, English musician (The Beatles), was born.

1945 Elkie Brooks, English singer, was born.

1945  Turkey declared war on Germany.

1946 Jean Todt, French executive director of Scuderia Ferrari, was born.

1947 State of Prussia ceased to exist.

 

 

 

1948 The Communist Party took control of government in Czechoslovakia.

 

1950 Néstor Kirchner, President of Argentina, was born.

1951 The first Pan American Games were held in Buenos Aires.

1953 José María Aznar, former Prime Minister of Spain, was born.

1954 Gamal Abdul Nasser was made premier of Egypt.

1956 In his speech On the Personality Cult and its Consequences Soviet leader Nikita Khrushchev denounced the cult of personality of Joseph Stalin.

1971 The first unit of the Pickering Nuclear Generating Station, first commercial nuclear power station in Canada, went online.

1973 Julio Iglesias, Jr., Spanish singer, was born.

1976  Chris Pitman, American keyboardist (Guns N’ Roses), was born.

1980 The Suriname government was overthrown by a military coup initiated with the bombing of the police station from an army ship of the coast of the nation’s capital; Paramaribo.

1985 Benji Marshall, New Zealand rugby player, was born.

1986 People Power Revolution: President Ferdinand Marcos of the Philippines fled after 20 years of rule; Corazon Aquino became the first Filipino woman president.

1991 Gulf War: An Iraqi Scud missile hit an American military barracks in Dhahran, Saudi Arabia killing 28 U.S. Army Reservists from Pennsylvania.

1992 Khojaly massacre: about 613 civilians were killed by Armenian armed forces during the conflict in Nagorno-Karabakh region of Azerbaijan.

Memorial to the victims of Khojaly Massacre

1994 Mosque of Abraham massacre: In the Cave of the Patriarchs in Hebron Dr. Baruch Kappel Goldstein opened fire with an automatic rifle, killing 29 Palestinian worshippers and injuring 125 more before being subdued and beaten to death by survivors. Subsequent rioting kills 26 more Palestinians and 9 Israelis.

2009  BDR massacre in Pilkhana, Dhaka, Bangladesh. 74 People were killed, including more than 50 Army officials, by Bangladeshi Border Guards.

 

Sourced from NZ History Online & Wikipedia

Fuel Tax Better Than Road User Charges?

Petrol is more expensive than diesel because the former has a fuel tax levied on it and the latter doesn’t. But diesel powered vehicles pay Road User Charges instead.

The chair of the Road Transport Forum, Steve Doughty told Mary Wilson on Checkpoint last night that he’d be keen on an investigation to determine if fuel tax might be better than RUCs.

My initial reaction to this is positive. RUCs are based on distance, the further you go the more you pay. That sounds fair enough until you work out that vehicles which travel further efficiently pay more than those which travel a shorter distance inefficiently.

Fuel taxes, are consumption taxes so the more you use the more you pay and there is a financial incentive to use it efficiently.

Doughty reckons that the administration on RUCs costs around $100 million a year. That sounds high but there must be a lot of paper work involved with all the vehicles each with individual RUCs which need to be purchased and processed.  It would be simpler and cheaper to pay fuel tax at the pump as we do for petrol.

Changing from RUCs to fuel tax might be more expensive for people with diesel powered cars who drive short distances. But it would definitely be easier and, by reducing the adminsitration,  possibly cheaper for every vehicle covering long distances.

It would also relieve traffic police of the task of checking RUCs are up to date and writing tickets if they’re not 🙂