Govt must pay for trains re­gard­less – ARC Adding fuel to the fire

Central Leader - - News - By Heather McCracken

The gov­ern­ment will be asked to cough up for Auck­land’s elec­tric trains whether a re­gional fuel tax is ap­proved or not.

The re­gion’s bid for a 5 cents a litre tax has been down­sized to 1c in the face of sky­rock­et­ing petrol prices.

But Auck­land Re­gional Coun­cil chair­man Mike Lee says if the leg­is­la­tion is still turned down, cen­tral gov­ern­ment will be asked for the cash.

“If the bill does not suc­ceed we’ll send out a clear mes­sage to both po­lit­i­cal par­ties that Auck­land will not be dumped on again.

“Auck­land has had a shock­ing deal in the past.”

A pro­posed 5c a litre tax ear­marked to pay for elec­tric trains has been ruled out for next year by Prime Min­is­ter He­len Clark.

The leg­is­la­tion change to ap­prove the tax must be passed by Par­lia­ment.

Mr Lee says the new pro­posal for 1c a litre from next year, ris­ing grad­u­ally to 5c, is still be­ing con­sid­ered.

“We’re just wait­ing on the pass­ing of the bill.”

He says as fuel prices rise so does the need for fast, mod­ern trans­port.

“The pub­lic will no longer tol­er­ate the idea of Welling­ton, a much smaller city, hav­ing a gov­ern­ment-funded, brand new elec­tric sys­tem and Auck­land hav­ing to make do with re­fur­bished diesels.”

The re­gional coun­cil aims to have some of the net­work con­verted be­fore the 2011 Rugby World Cup.

A fleet of elec­tric trains to re­place the diesel en­gines is es­ti­mated to cost $500 mil­lion.

But this week the coun­cil was forced to vote on an an­nual bud­get with­out pro­vi­sion for buy­ing the new trains.

The bud­get had to be signed off by June 23, but the fuel tax leg­is­la­tion is still wait­ing for its sec­ond read­ing in Par­lia­ment.

The coun­cil says work on elec­tri­fi­ca­tion con­tin­ues and the fuel tax was only in­tended to fast-track the project.

The bud­get can be re­vis­ited if the tax is ap­proved dur­ing the fi­nan­cial year.

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 in­creas- ing by that much be­cause peo­ple would be us­ing less petrol,” he says.

“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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