Consumers to take brunt of petrol tax increase

Consumers will end up paying the price if Auckland is hit with a double fuel-tax, the Auckland Chamber of Commerce says.

Photo: 123rf

The government announced this week it was looking at increasing excise tax on petrol between 10 and 14 cents a litre over the next three years. This comes on top of a 12 cents a litre regional fuel tax in Auckland which comes into effect in July.

Auckland Chamber of Commerce chief executive Michael Barnett said there should have been a wider discussion about paying for infrastructure before the idea of taxes were instituted.

“I am aware of three mid-sized freight companies that will collectively face petrol price increases of around $1 million per annum.

“Other businesses are telling me a similar story and making the point that tight margins mean that every cent will be passed on,” Mr Barnett said.

He said while Auckland needed significant investment in infrastructure, a double fuel tax was not the solution.

The government this week provided detail on how it wants to spend the annual $4 billion National Land Transport Fund – proposing to double spending on regional roads to make them safer, as well as providing 42 percent increase for upgrading local roads.

That would be partly offset by an 11 percent cut in spending on state highways. There will also be more money for public transport.

The government‘s planned increase in excise tax will help pay for the plan.

National Party transport spokesman Jami-Lee Ross has criticised the plan saying people in the regions would be paying more at the pump to fund trams in Auckland.

He said pulling funding from state highways meant fewer roads would be upgraded.

Transport Minister Phil Twyford is seeking feedback on the draft Government Policy Statement 2018 on land transport until 2 May.