Fuel tax would raise $40m

A Wellington regional fuel tax could have covered the cost of $500 millon worth of extra transport projects, documents reveal.

Stuff reported in October a fuel tax for the Wellington region was shot down by decision-makers despite claims it was being discussed. However, documents released to Stuff under the Official Information Act reveal the team behind Let’s Get Wellington Moving – an initiative led by the New Zealand Transport Agency in partnership with the Wellington city and regional councils – lobbied the Government in April and June, to introduce a fuel tax that would raise $40m in annual revenue. The documents show a regional fuel tax was among a number of alternative funding sources to bankroll the project.

The Government was told a regional fuel tax, at the same level for Auckland (10 cents per litre), would generate an annual revenue of $36m-$40m if applied across the whole region.

But if it was applied only to sales in Wellington City, a 10 cents litre tax, would yield $14.4m-$16m a year. The proposal on potential new funding options indicated there would be debt servicing of about $500m-$550m to cover costs.

Estimates outlined the charges that would be needed under each funding option to generate $10m of revenue per year; 2.63 cents per

litre for the region and 6.58 cents per litre for the city.

The calculation of $40m was based on 2017 Wellington region fuel sales of 457 million litres (274 million petrol, 183 million diesel). It showed that Wellington City accounted for about 40 per cent of regional fuel sales.

A regional fuel tax was expected to have a modest impact on the transport system and demand, with some shift to alternative modes, the documents show.

The documents included information provided to the Minister of Transport by the NZ Transport Agency, where it considered a regional fuel tax as part of Let’s Gets Wellington Moving.

They show a briefing was sent to ministers on April 10 and an updated presentation was sent in June, which was used in a discussion with ministers.

National leader Simon Bridges said the very fact a briefing was given in June showed the Government had been caught out. ‘‘They say they were not considering this, but in fact their officials were actively working on exactly that.’’

In October, Transport Minister Phil Twyford said the Opposition’s claim that the Government had been in discussion with Wellington councils about a regional fuel tax was categorically wrong. ‘‘The Government has explicitly ruled out a regional fuel tax in Wellington. The Wellington councils have asked for a regional fuel tax. I have ruled it out.’’

At the time Prime Minister Jacinda Ardern said she had ruled out regional fuel taxes around the country while she was the prime minister.

The OIA documents also show a Ministry of Transport adviser wrote to a Hamilton City Council staffer in January to say a fuel tax was not an option. ‘‘The Ministers have decided that they do not intend to approve regional fuel tax for any region outside Auckland during the current term of Government – so that should take us to the end of 2020. This was set out in Minister Twyford’s recent letter to the Mayor.’’

Wellington mayor Justin Lester said a fuel tax had been ruled out ‘‘some time ago’’.

Despite this, the group were still working out options on how to pay for the local share, he said. ‘‘All it [the documents] is doing is some analysis, so if you have to understand if you have to raise it, what could that be and how much would you likely raise.’’