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.