Government fuel taxes will hurt everyone

3 MinutesBy NZ Trucking magazineApril 4, 2018

The Labour Government‘s proposed fuel taxes will have the effect of hitting everyone in the pocket, whether they use a motor vehicle or not.

The Government plans to increase fuel taxes by 9 to 12 cents a litre to fund an overhaul of the country’s transport system. State highway funding will be cut by 11 percent, while public transport funding will receive a 46 percent boost.

Based on a fairly typical 125,000 kilometres per year for a single operator truck getting 1.71 kilometres per litre (conservative for a truck running a metro round) and using about 70,760 litres annually, with a worst case scenario of 25 cents per litre, that would add a whopping $17,690 plus GST (as excise tax attracts GST) to each and every truck.

Considering the majority of goods in New Zealand are delivered by road, transport operators will have no choice but to increase their rates to cover the fuel taxes. That means the price of your bottle of milk and your new television will go up, as retailers will also increase prices to recoup higher freight costs.

National MP Amy Adams has accused the Labour Government of going back on its election promises to not impose any new taxes.

In an interview on 1ZB she said funding for regional roads was being axed and the new revenue was earmarked for projects such as a trolley system in Auckland and cycleways.

“We can debate the merit of those things, but let‘s not con motorists that when they‘re paying these extra taxes, that it‘s going to make their roads any better.”

Adams said if the taxes were being used to improve roading and safety, motorists would be more likely to accept them, but they were not.

The proposed fuel excise duty and road user charge increases over three years come into effect on September 1, which will be on top of the 10 cents a litre regional fuel tax that Aucklanders will have to pay from July 1.

While the money will go into the National Land Transport Fund as usual, KiwiRail will now be able to use this fund for the first time, and has plans to use $4 billion of that over the next decade to build rail infrastructure, mostly in Auckland.