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Government Pumps Up Petrol Price Nationwide

Fuseworks Media
Fuseworks Media

By Kate Chapman of NZPA

Wellington, March 16 NZPA - The whole country will soon find itself funding Auckland's roads after the Government today announced it would increase the national petrol tax and can regional fuel taxes.

The national fuel tax will increase by three cents a litre in October this year and again in October 2010. The increase includes the 1.5 cents a litre planned by the previous government.

The Auckland regional fuel tax, which was to increase to 9.5 cents a litre in two years, was approved by the Labour government to fund a number of transport projects including electrification of the city's trains.

Canterbury, Bay of Plenty, Waikato and Wellington were also considering a regional tax, Transport Minister Steven Joyce said.

He said the regional tax was canned in preference of a "simpler system which delivers benefits to road users across the board".

But Aucklanders will not miss out -- the projects the tax would have funded will still go ahead.

Mr Joyce said the Government was committed to the electrification of Auckland's rail network and the plans would continue unchanged.

The project would be funded by the crown through capital appropriation or additional debt funding "until such time as patronage levels reach the point where regular passenger transport subsidies are sufficient".

"The Government has decided in principle that now that KiwiRail has been repurchased by the government, it should be the owner of the new crown-funded passenger rail stock in Auckland and Wellington."

When challenged that the change meant the rest of New Zealand would be funding Auckland's transport, Prime Minister John Key said if the state highway network was more efficient in Auckland the whole country would benefit from a better New Zealand economy.

"The sharp end of all this is, the reality is, at least five regions were going to put on a regional petrol tax, so the vast bulk of the country they would have experienced the regional petrol tax anyway.

"You've got a situation where you have a regional petrol tax, it is hideously complex to administer and people will start doing all sorts of behavioural changes to avoid paying what would be quite a large tax in the Auckland region."

The changes to the petrol tax were part of the Government's $1 billion additional investment in the state highway network.

The national fuel tax increases were expected to raise $283 million towards the investment.

The rest will come from new crown investment ($258m) previously set aside for the Wellington passenger rail infrastructure and a reallocation from non-state highway areas ($420m).

The savings from non-state highway areas includes money saved on administration costs and reduced increases in the cycling and walking areas.

"Yes, we are putting some pressure on the non-state highway classes to get better results from those classes," Mr Joyce said.

When 84 percent of people go to work by car, truck or motorbike "we need good roads to grow and compete".

Labour transport spokesman Darren Hughes said the changes to regional fuel tax was "unfair on the vast majority of New Zealanders".

"The huge irony is that it is also unfair on Aucklanders because they won't see many of the benefits, including new rail stations and integrated ticketing, that would have come their way under the planned regional fuel tax."

Mr Hughes said the Government had shown "absolute preoccupation with roads at the expense of public transport".

Local Government New Zealand president Lawrence Yule said it was difficult for councils to plan with a changing transport policy environment.

He said while the changes today would bring some certainty they "may require significant changes" to some councils' plans.

The Government's focus on state highway construction showed a "complete denial" of the transport challenges facing the country, Green Party co-leader Jeanette Fitzsimons said.

"Not even a well-run business would plan a transport system to be this short-sighted."

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