Government introduces regional fuel tax legislation

Friday, 23 March 2018

It is estimated Auckland needs $27 billion to fix its congestion woes.

Legislation allowing Auckland to apply for a regional fuel tax has been introduced by the Government.

Minister of Transport Phil Twyford announced on Thursday, the Land Transport Management (Regional Fuel Tax) Amendment Bill would enable Auckland Council to seek funding for specific transport-related projects.

The tax would be applied to petrol and diesel, and impose a maximum rate of 10 cents per litre, for a maximum of 10 years.

Its purpose would be to assist in funding the estimated $27 billion Auckland needed to spend on transport infrastructure over the next decade to stop congestion from getting worse.

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Auckland Mayor Phil Goff is welcoming the legislation.

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Under the bill, the council would first have to consult with residents on the projects it wished to fund, then would be required to obtain Government approval before the fuel tax could be implemented.

'The Government has agreed to only consider a regional fuel tax in Auckland during its first term in office,' Twyford said.

Solving Auckland's gridlock problem was also important for the rest of New Zealand with congestion in the city between 2015 and 2017 estimated to have cost the economy between $1.3 billion a year in lost productivity, he said.

Mayor Phil Goff said the Government's introduction of the legislation was a 'welcome first step'.

'Worsening traffic congestion is a significant issue in Auckland, a fuel tax will provide up to $1.5 billion to invest in critical transport infrastructure,' Goff said.

A fuel tax was cheaper to administer, contained a user-pays element for road usage and raised about twice as much money as the interim transport levy, he said.

The controversial levy is a targeted rate established in 2016 and will expire on June 30 this year.

'The equivalent rates increase needed if there were no fuel tax would be an 8 to 9 per cent rates increase on top of the general rates increase of 2.5 per cent plus any other targeted rate,' he said.

Last year the Automobile Association found a 10 cents per litre regional fuel tax would cost the average Auckland motorist driving an average car $125 extra per year.

However, despite this nearly half of the 2900 written submissions received by the council for its Draft Long Term Plan were in support of the tax.

The bill would head to a select committee for public submissions and was expected to be passed in June, making it ready for implementation in Auckland by July 1.