Why Christchurch needs more taxes

The Christchurch City Council wants the power to introduce its own fuel tax. It should be allowed it. It might seem strange to be endorsing another way to increase the tax burden on a city facing a steady stream of rates rises over the next decade, but in a fuel tax there is a chance to soften the blow. Post-earthquake Christchurch could do with that.

The matter has reared its head as the Government prepares to fast-track regional fuel tax legislation that would allow Auckland to introduce a 10c per litre levy as early as July. Other areas could follow suit from January

2021.

The catch is in the title. If passed, the Land Transport Management (Regional Fuel Tax) Amendment Bill would be implemented by regional authorities, which in Christchurch means Environment Canterbury (ECan). The Christchurch City Council has submitted on the bill, asking that city and district councils be granted the same powers: ‘‘The council encourages the select committee to acknowledge that urban areas outside of Auckland are also in need of funding assistance and alternative revenue tools.’’

The council is right in principle, but not practice. Granting two levels of local government the power to administer the same tax would be a jurisdictional nightmare. Christchurch, with its eye-watering earthquake repair bill, would be better to make its case as an exception. No other territorial authority can point to a Deloitte report that says it will need to spend $4 billion over the next 30 years (on top of $3.6b incurred so far) to return its assets to pre-earthquake condition. No other city council is looking at 20 years to get the condition of its roads back in line with other major centres.

On top of that, given ECan and the city council’s track record of dysfunction on transport issues like the bus network, it is difficult to imagine their attempts at ‘‘regionwide alignment’’ on a fuel tax becoming anything other than a hot mess. If there is a legislative opportunity to avoid this, it should be taken.

The tax itself is a no-brainer for the city. Many ratepayers, not unjustifiably, argue that successive rates increases over the next 10 years will be used to pay for expensive facilities they will rarely use. A fuel tax paid exclusively by road users to fix the city’s broken roads presents no such problem. And if such a levy could ease the gradient on projected rates increases [average annual hike

4.37 per cent over 10 years], so much the better.

New taxes are, by nature, unpopular. In Auckland, where transport woes dwarf the rest of the country’s problems, the approval rating for a fuel tax is only just above 50 per cent. A self-selecting Stuff poll in February showed just 22 per cent of 4300 voters supported the same for Christchurch. That could change. When a Christchurch fuel tax was first mooted, city councillor Vicki Buck said it could cut 2018-19 rates increases from 5.5 per cent to 1.9 per cent. If the council can make numbers like that a reality, and in doing so bring back the 20-year road repair timeframe, Christchurch ratepayers will have cause for celebration.