Fuel tax and $pend fuel$ inflation

National MPs have been warning that the government’s proposed Auckland fuel tax wouldn’t apply just in Auckland – and they have been proved right.

The Government has today confirmed that it plans to gut regional roading projects to pay for trams in Auckland, and to charge regional motorists more to do so, National’s Transport spokesperson Jami-Lee Ross says.

“Today’s announcement will be met with anger and disappointment right around New Zealand, with the Government confirming it will cut around $5 billion out of the state highway construction programme over the next 10 years.

“That means roads which would have improved safety, created jobs, boosted regional economic growth and better connected our regional farmers and producers to our major centres will be axed.

“This is an extraordinary blow for regional New Zealand, from a Government which has claimed to stand behind it. Instead, the Government is saying their needs are secondary and ensuring tourists can get from the Auckland CBD to the airport is more pressing.

The government has put a $3 billion slush fund in the hands of Shane Jones for regional development. It would be far better to use some of that money for upgrading regional roads, but instead of tax increases not as well as them.

“Motorists right around New Zealand will also be shocked at the extraordinary new taxes the Government plans to impose on them.

“Aucklanders could actually find themselves paying as much as 25 cents a litre extra for their fuel within three years – once the proposed annual fuel excise and proposed regional fuel tax are taken into account.

“That means they will pay an extra $10 to $15 every time they fill up – and in less than three years the rest of New Zealand could be paying that fuel tax too, under legislation the Government introduced last week.

“That this Government will continue the previous Government’s commitment to road safety is to be applauded, but it is undermining that by axing the construction of New Zealand’s safest and busiest roads – the Roads of National Significance.”

The government has been crowing that the families package and increase in the minimum wage will help low income households. But there’s no point putting more money in one pocket if it’s taking more from the other.

An increase in fuel tax will increase the price of transport for people and goods.

The price of every trip will be higher for individuals, charities, businesses and entities like schools and health providers.

That will be inflationary and the people who will be hardest hit by the resulting price increases will be the poor the government is purporting to help.

The new tax also breaks an election promise:

The New Zealand Taxpayers’ Union says the Government’s proposal to increase fuel levies breaks Jacinda Ardern’s promise of ‘no new taxes’ and the widening of the Regional Transport Fund (paid for by petrol taxes) to include funding for cycleways and trams is a dumb idea.

Taxpayers’ Union Executive Director Jordan Williams says, “The plan to increase fuel taxes by 10-12 cents per litre means the Prime Minister is breaking her very clear pre-election promise of ‘no new taxes’.”

“Fuel tax is particularly harmful because of its regressive nature – the people it hurts most are poorer families living in fringe suburbs. This will ultimately mean less food on the table.”

“Aucklanders will be whacked twice over, with today’s fuel tax announcement applying on top of the proposed regional fuel tax.”

“And as if fuel tax hikes didn’t sting enough, the Government is going to be using the revenue to fund cycleways and trams, at the same time they’re slashing funding for highways. In other words, drivers are paying more to receive less.”

When I first became active in the National Party I sat through conference after conference where remits urged the then-government to ensure that fuel taxes went to roads  and not into the consolidated fund.

That eventually happened but now motorists will be taxed more and roading projects will receive less and Labour adds more fuel to the tax and spend fire.

 

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