About that fuel tax

26/06/2020

The Taxpayers’ Unions is calling on the government to scrap the increase in the fuel tax which is due to take effect next week.

Union spokesman Louis Houlbrooke says, “The Government justified its annual hikes to fuel tax on the basis of funding infrastructure projects – the biggest one being Auckland Light Rail.”

“Now that light rail is canned, there is no excuse for next week’s hike to fuel tax. In fact, during an economic recession, hiking a tax on productive travel would be madness.”

“If Phil Twyford forges ahead with his planned tax hike, it should be seen as nothing more than a cynical revenue grab.”

And what about the tax already taken?

With plans for light rail from Auckland CBD to the airport abandoned. Gull asks what happens to the 11.5 cent per litre and an estimated $150 million annual tax take from the Auckland Regional Fuels Tax?

Gull, New Zealand’s leading innovative energy retailer, today questioned what happens to the Auckland Regional Fuels Tax levied at 11.5 cents per litre including GST on each litre of petrol and diesel delivered into the Auckland area. This Tax introduced in July 2018 raises an estimated $150 million dollars per year and would be happily welcomed back into the wallets of stretched households and businesses.

If the $300 million Taken over the last two years hasn’t been spent on light rail, where has it gone?

Dave Bodger General Manager Gull New Zealand says “we support greater investment in public transport, but with one of the largest projects now reported in the media as abandoned what happens to the tax that was imposed on Aucklanders to help fund this infrastructure? In tough times is this an opportunity to halt the tax while there is no plan? To reduce the tax? If that is not on the cards, then can we have a plan as to where this significant slice of the motorist’s pay-packet is now being spent or planning to be spent? “

If a tax can be increased it can be decreased.

“All motorists are watching every dollar they spend and with a major economic slowdown looming, returning this into the economy would be a welcome relief for each family’s budget,” notes Bodger.

He continues “If the motorist has the opportunity to spend or save this money, people with better abilities than me and access to data could probably estimate how many jobs this type of stimulus boost may create. In our view Kiwis need every piece of help available right now. Can a change in this tax, that appears to be in the main not needed right now, be part of economic support packages? “

Fuel taxes are inflationary. They hit all goods and every service with a transport component, chief of which is food, and they hit the poorest hardest.

If a private business took money from a customer for a particular purpose and used it for another it would be guilty of misappropriation.

If the government continues to inflict the fuel tax for public transport when it’s major project has been canned it will be misappropriating money that every individual and business hit by the recession needs for their own purposed and to help with the recovery.


How much more will you pay for food?

27/06/2018

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.


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