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Joyce: Regional Fuel Taxes Replaced

Fuseworks Media
Fuseworks Media

Transport Minister Steven Joyce says the government will not proceed with regional fuel taxes, which are an "expensive and inefficient" means of collecting revenue.

Regional Fuel Taxes will be partially replaced by smaller increases in national fuel taxes.

The previous Labour-led government approved a regional fuel tax for Auckland, rising from 2 cents per litre in July to 9.5 cents per litre in two years' time. Auckland road users would have been taxed at that rate for 30 years.

This was in addition to national increases in fuel taxes scheduled by the previous government of 1.5 cents per litre for the next three years. The total tax increase by 2011 would have been 14 cents per litre for Aucklanders.

A number of other regions (Canterbury, Bay of Plenty, Waikato and Wellington) were also considering, or beginning to consider, the implementation of regional fuel taxes to provide additional funding for local transport projects.

Mr Joyce says the government is opposed to regional taxes of almost 10 cents in Auckland or anywhere else.

"Regional taxes impose significant compliance costs to businesses and road users, and would result in much higher fuel prices for motorists in some regions." "Our preference is for a simpler system which delivers benefits to road users across the board."

From 1 October this year motorists will pay an increase of 3 cents per litre in fuel excise duty and drivers of diesel vehicles will pay the equivalent in road user charges. A second 3 cents increase will occur at October 1 next year. Each 3 cent per litre increase includes an annual increase of 1.5 cents per litre scheduled by the previous government. Mr Joyce says these smaller adjustments to roading excise and road user charges across New Zealand will make more funding available for roading across the country.

"Projects that were to be funded out of regional fuel taxes will, for the most part, continue as planned - the difference will be in how they will be funded. The electrification of Auckland's trains will proceed."

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