Poorer motorists face petrol pain
Owners of older, less fuel-efficient cars will bear the brunt of petrol tax increases, an economist says.
Last week Transport Minister Phil Twyford said the Labour-led Government wanted a fuel excise duty increase of between nine and 12 cents a litre to fund billions of dollars’ worth of land transport planning, focussing on road safety and rapid rail.
That, combined with Auckland Council’s regional fuel tax could result in Auckland motorists paying upwards of 20 cents per litre more for petrol.
It prompted the Salvation Army to warn the city’s poorest citizens would feel the greatest effect.
NZ Initiative economist Sam Warburton said his research showed that was correct.
‘‘Petrol excise duty is grossly regressive no matter how many kilometres someone drives,’’ he said.
‘‘The amount of fuel tax people will pay varies by how much fuel their vehicle uses.
‘‘It’s easy to imagine that lowincome people have older, less fuelefficient vehicles, and that, with bigger families, Ma¯ori and Pacific Island families might more often own vans and bigger cars. While these cars all cause the same need for roads, including the same damage to roads unlike, say, diesel trucks, which are charged more, they pay vastly different levels of tax.’’
He said someone who owned a car that was among the 5 per cent least fuelefficient would pay two-and-a-half times as much tax as someone who drove one of the 5 per cent most fuel-efficient.
‘‘A 10c per litre tax increase inAuckland will mean that households that can afford a hybrid or other new vehicle will pay about $65 more per vehicle per year.
‘‘A low-income family with an old van will pay about $150 per vehicle per year. Combine that with the general petrol tax people are already paying and that lowincome family with a low fuel-efficiency vehicle will pay about $1100 per vehicle per year. People that can afford fuelefficient vehicles will pay about $430 per vehicle per year.’’
Motorists who drove long distances would be worse off.
‘‘Particularly if they drive to nightshift jobs where congestion is low and they receive little benefit from their taxes going to public transport.’’
But Twyford said the worst thing for low-income families was not having public transport options and being forced to use cars, which were the most expensive form of transport.
‘‘Having no choice other than having to drive through gridlocked traffic is a huge cost on low-income households. Investing in affordable, fast public transport will reduce costs for families and give them the freedom to escape the high cost of car dependency.’’