Steven Joyce

Transport Minister Steven Joyce says increases in fuel excise duty (FED) and Road User Charges (RUC) which come into force tomorrow will bring benefits to all New Zealanders through better roading and public transport networks.

The 3 cent per litre increase includes an annual increase of 1.5 cents per litre scheduled by the previous government. The additional 1.5 cents partially replaces previously planned regional fuel taxes. Mr Joyce says the increases will flow into the hypothecated National Land Transport Fund and assist investment in transport projects throughout the country.

"The additional revenue from these increases will contribute to the billion dollars that will now be spent on our state highway infrastructure each year. "That ongoing investment is crucial in assisting economic growth and will enable greater productivity to be gained from the transport network."

In part, today's increases replace previously planned regional fuel taxes. Mr Joyce says regional fuel taxes are expensive and inefficient ways to collect revenue. The previous Labour government had approved a regional fuel tax for Auckland, rising from 2cpl in July this year, to 9.5cpl in two years time.

A number of other regions were also starting to consider the implementation of regional fuel taxes to provide additional funding for transport projects