Fired up over fund­ing short­fall

Auckland City Harbour News - - News -

A short­fall in trans­port fund­ing should be made up with GST from petrol, says Cham­ber of Com­merce head and Auck­land Re­gional Coun­cil deputy chair­man Michael Bar­nett.

Mr Bar­nett says the gov­ern­ment has re­ceived a wind­fall of ex­tra tax rev­enue from in­creas­ing petrol prices.

“A strong case ex­ists for the gov­ern­ment divert­ing this or equiv­a­lent rev­enue back to Auck­land to mit­i­gate for the de­layed re­gional fuel tax,” he says.

But Cam­paign for Bet­ter Trans­port spokesman Cameron Pitches dis­putes whether the gov­ern­ment ben­e­fits from higher fuel prices.

“I don’t be­lieve tax would be in­creas­ing by that much be­cause peo­ple would be us­ing less petrol. Peo­ple are un­der a mis­con­cep­tion the gov­ern­ment is get­ting more money.”

A trea­sury re­port re­leased in 2005 by Fi­nance Min­is­ter Michael Cullen says petrol price hikes lead to lit­tle change in tax rev­enue.

In the long term, rev­enue can drop be­cause peo­ple use less petrol and spend less on other goods.

Mr Bar­nett says his cal­cu­la­tions al­lowed for a drop in fuel con­sump­tion.

“There’s been some fluc­tu­a­tions in vol­ume but there’s still been a sig­nif­i­cant gain by gov­ern­ment.”

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