Fuel tax proposed in ‘coffee and croissants budget’

The Christchurch City Council wants to introduce a fuel tax to help it repair earthquake-damaged roads.

The 2010 and 2011 earthquakes have so far cost the council $3.6 billion and an additional $4b needs to be spent during the next 30 years to return the city’s assets to their pre-earthquake condition, a Deloitte report has found.

Ratepayers face a 5.5 per cent rate increase for the 2018/19 year. This was on top of seven years of rates increases averaging 6.7 per cent each year.

The increases have not been enough to repair or replace all that was lost in the earthquakes, the council’s draft 10-year budget, the Long Term Plan (LTP), says.

A 4 cent a litre tax on petrol and diesel would raise at least $15 million annually, based on the 500 million litres of fuel purchased in Christchurch each year.

Christchurch Mayor Lianne Dalziel said rates were a finite resource and the council needed to consider new sources of funding.

A 10c a litre fuel tax is planned for Auckland. The council said it was not yet clear if the legislation would allow other local authorities to introduce a local fuel tax too.

The council was asking Christchurch residents what they thought of a fuel tax as part of its draft LTP, which was approved by the council yesterday and would be released for consultation on March 9.

Councillor Vicki Buck said if the council had a fuel tax, the proposed rate increase would be just 1.9 per cent – not 5.5 per cent.

‘‘We need to look at what are the other ways of raising money because rates have never been a good mechanism for equity.’’

Cr Deon Swiggs said a fuel tax was great in theory, but Christchurch drivers already paid 15 to 20c more a litre than in Auckland.

He wanted the Government to give councils back the GST paid on their rates.

‘‘That would be $50m to $60m of revenue we could have overnight.’’

Some councillors believed the council could do more to reduce its spending.

Cr Aaron Keown said the proposed 5.5 per cent rates rise was too high. He believed the council had spent too much money on community facilities that had become so flash they won architectural awards.

‘‘Once upon a time when I was a kid growing up, a community pool was a box. A box that housed the community.’’

Cr Yani Johanson said several Government decisions after the earthquakes had put huge costs on the council.

The Government’s central city blueprint was $400m more expensive than the council’s original plan. The decision to designate land where the former central library was for the convention centre meant the council had to build a new library, at a cost of $92m.

The decision to close, merge and relocate schools left the council to pick up the cost of associated traffic measures, he said.

Johanson believed the council could reduce the costs of its 10-year $4.2b capital programme.

‘‘I still think this budget in terms of the capital is more of a coffee and croissants budget than a bread and butter budget.’’

Cr Mike Davidson said the council was spending too much money on roading projects like the northern corridor, when a rebuild of the Shirley community centre had not made it into the draft LTP.