$1.2 billion shortfall with Government set to axe Auckland Fuel Tax in July

Thursday, 8 February 2024

PM Christopher Luxon announces plans to scrap Auckland regional fuel tax, saying it'll help ease cost of living pressures. (Video first published February 8, 2024.)

Auckland Mayor Wayne Brown is warning rates may need to rise, after the Government confirmed it was axing the Auckland Regional Fuel Tax.

Aucklanders pay an extra 11.5 cents per litre of fuel, collected as a regional fuel tax. Auckland is the only council to have utilised law allowing it to collect a regional fuel tax.

Prime Minister Christopher Luxon said that tax would end in July.

The tax was introduced in July, 2018, and had collected more than $780 million. Of that, $341 million was yet to be spent. But mayor Brown said all of this money had already been allocated.

Prime Minister Christopher Luxon and Transport Minister Simeon Brown announce the cessation of the Auckland regional fuel tax.

Luxon said the remaining money from the Auckland transport fund would be used on three projects: The completion of the City Rail Link, the Eastern Busway, and road improvements.

Transport Minister Simeon Brown said more than a dozen projects - around cycle lanes, road safety and walking, could be stopped.

“I'm sure the mayor will be happy there might be slightly less speed bumps being delivered,” Simeon Brown said.

“Ending this tax is one way to reduce the price of fuel and ease some of the financial pressure facing households in our largest city.”

But Wayne Brown quickly responded, saying this decision would leave the council in a far worse position.

Auckland Mayor Wayne Brown is warning rates may need to rise as the Government ends the regional fuel tax.

The mayor said the council would need to find $1.2 billion over the next four years to cover the funding shortfall.

“Aucklanders will have to pay higher rates or miss out on major road and public transport improvements,” he said.

Late last year the mayor’s office commissioned polling which showed just 26% of Auckland supported cutting transport projects in exchange for axing the fuel tax.

Transport Minister Simeon Brown said some transport projects would likely stop.

“The money set aside has been fully allocated to projects that are under construction. It just isn’t spent until contractual milestones are met. That’s standard practice when you’re building something,” the mayor said.

“I must be honest with Aucklanders about the financial constraints we are under. As a direct consequence of the Government’s decision to cancel the RFT, some of these projects may very well be cancelled altogether.”

Mayor Brown said the Government had pushed Auckland into a difficult position, where the council would need to consider rates rises.

“This is a problem that can’t be solved just by making cuts. Every Aucklander agrees that our transport system is a mess and it’s going to cost a lot of money to fix. That money must come from somewhere. Unfortunately, the Government has just made it a lot harder for us.”

Brown said it was likely Auckland Council would have needed to increase rates anyway, with its existing work programme. He said decisions about rates were “a decision for council”.

Luxon said the Government would work with Auckland Council to find new funding tools, which could include congestion charging