Regional fuel tax dust-up
Local authorities are already showing interest in following Auckland’s example. But they face resistance, writes John Anthony.
Regional fuel taxes could become a fact of life for many New Zealanders as councils look for ways to fund infrastructure beyond rates.
Auckland Council has agreed to open public consultation on a proposed regional fuel tax of 11.5 cents per litre for a maximum of 10 years.
The option of a fuel tax has become available thanks to the Land Transport Management (Regional Fuel Tax) Amendment Bill, which was introduced to Parliament by Transport Minister Phil Twyford in March.
The bill, currently before select committee, allows Auckland to adopt a fuel tax from July. From 2021, New Zealand’s remaining regional councils will be able to apply to the Government for a maximum of 10 cents per litre fuel tax (plus GST).
Some councils have already expressed interest in following Auckland’s lead.
In a submission to the select committee, Greater Wellington Regional Council said it supported the bill but would like the ability to make parts of the region exempt, as Auckland Council had also requested.
Waikato Regional Council had not reached a position but Hamilton City Council had already told the Government it was keen to have a fuel tax.
Christchurch City Council wants to introduce a fuel tax to help repair earthquake-damaged roads.
Environment Southland, Otago Regional Council, Taranaki Regional Council, West Coast Regional Council and Northland Regional Council did not have a position on the bill.
In the central North Island, Horizons Regional Council did not support the bill.
The introduction of a regional fuel tax, on top of the Government’s proposed nationwide petrol excise duty, ‘‘would be felt extremely hard by our communities’’, chair Bruce Gordon said.
It would consider a regional fuel tax if sub-region or district specific taxes were available but until then it had no intention of applying for one, he said.
Bay of Plenty, Hawkes Bay and Canterbury Regional Councils did not respond to questions by time of publication.
Local Government New Zealand president Dave Cull said his group supported the bill but wanted the tax to be made available to all councils, not just regional councils.
‘‘There is a need for more and more sustainable funding mechanisms for local government in general,’’ Cull said.
Currently the vast majority of council revenue came from rates, which were based on property values, he said.
‘‘Rates are not going to cut it. It’s not enough to provide for the investment that’s needed right across the country.’’
One benefit of a fuel tax was that it captured revenue from visitors, he said.
‘‘The roads are being used by thousands of people who don’t contribute in any way in the local area because they’re visitors.’’
Regional fuel taxes would work best in areas with small populations, because rate revenue was low but visitor numbers were high, he said.
Some smaller councils spent up to 70 per cent of their revenue on roads, he said.
‘‘A regional fuel tax or sub regional fuel tax could be just the thing.’’
AA petrol prices spokesman Mark Stockdale said a regional fuel tax would appeal to councils looking to raise revenue while avoiding rates rises.
However, the AA did not support regional fuel taxes outside of Auckland, he said.
‘‘No other part of New Zealand has the same critical pressures
‘‘It would be unfair and unreasonable to impose yet more taxes on fuel in those areas that pay much higher fuel prices.’’
that Auckland has.’’
Other regions would not have the population needed to generate a reasonable amount of revenue, he said.
The geographic size of other regions also meant it would be easier for motorists to avoid a tax by travelling outside the border to buy fuel at a lower price, he said.
Many regions already paid higher fuel prices than Auckland, he said.
‘‘It would be unfair and unreasonable to impose yet more taxes on fuel in those areas that pay much higher fuel prices.’’
Administration costs in smaller regions could also be disproportionately high compared to the revenue a tax would raise, he said.
AA petrol prices spokesman Mark Stockdale