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.