Auckland petrol tax hurts poor — report

Auckland’s new regional petrol tax of 11.5 cents a litre is placing an unfair burden on low-income and Ma¯ori households, says the body that promotes issues for Ma¯ori to Auckland Council.

The Independent Maori Statutory Board released a report yesterday showing low-income Auckland households spent more of their income on fuel than higher earners, making the fuel tax unfair in terms of its impact on the less well-off.

People on lower incomes were also more likely to run older, less fuelefficient vehicles and have fewer available public transport options for travel to and from work.

Transport Minister Phil Twyford said the report was out of date and did not take into account the Government’s Families Package introduced in July that gave 384,000 low-income families with children an average of $75 extra per week.

The report showed annual fuel costs increases could be as much as $366 for lower-income households, and an additional $452 if the fuel efficiency of low-income households’ vehicles was considered.

For the lowest-income people, the tax would mean an extra $4.88 to $7.32 a week in petrol costs, the equivalent of a school lunch.

The regional fuel tax policy is regressive.

David Taipari, Independent Maori Statutory Board

The council introduced the regional petrol tax on July 1 after the Government passed legislation to allow for it. The tax is expected to raise $1.5 billion over 10 years.

The board said the council and Government must find ways to offset the fuel tax’s impact on low-income Auckland households, particularly Ma¯ori in the region’s south and west.

Board chairman David Taipari said little or no policy consideration had been given to the impact of higher fuel prices on low-income people. He urged the Government and the council to look at ways the impacts of the regional fuel tax and the newly introduced national fuel levy could be offset as both were adding to Auckland’s poverty problem.

“The implications have not been adequately thought through and the problem needs to be urgently addressed,” Taipari said.

The board would ask the council and Government to set up a system to monitor and track the effects both fuel taxes were having on lowincome Auckland households using Census data and household expenditure and travel surveys.

“The regional fuel tax policy is regressive . . . disproportionately impacts on lower-income households, many of which are Ma¯ ori and producing even more inequitable impacts when the fuel efficiency of vehicles is taken into account.”

He said the report listed options both local and central government could consider to ease the disproportionate burden the fuel cost increases would have. These included further increases to Working for Families, tax relief, discount cards, rates relief and specific targeted transport services.

Twyford said the Families Package would help offset the 11.5c a litre increase in fuel for drivers in the Auckland region: “The report also fails to acknowledge the associated high cost on low-income families of running a car, and the potential savings they will make when better public transport options are available.”