The National-led coalition Government has actioned its plan to get rid of the Auckland regional fuel tax and replace it with congestion charging.
Transport Minister Simeon Brown confirmed the 11.5 cents per litre levy would be removed from June 30, at a press conference on Thursday afternoon.
Brown said ending the tax was one way to reduce the price of fuel and ease some of the financial pressure facing households in the city.
“Removing this extra tax of 11.5 cents per litre on petrol and diesel means the driver of a Toyota Hilux will save around $9.20 every time they fill up, while a Toyota Corolla driver will save around $5.75”.
The tax has brought in about $780 million for transport projects, and $341 million has not yet been spent. Auckland Transport will still be able to use the remaining money.
Simeon Brown said the money should go towards projects of “mutual priority to the Government and Auckland Council” such as the Eastern Busway and City Rail Link.
A range of other taxes and revenue gathering measures will be deployed to replace the fuel tax and continue to fund infrastructure upgrades in Auckland.
These include extra taxes on houses near projects or value capture, tolling some roads, and implementing congestion charges for peak travel times in and out of the central city. Brown notes the Government has also signalled the potential use of public-private partnerships to help deliver new infrastructure.
“Fuel tax is becoming an increasingly regressive form of taxation and costs people on lower incomes with less fuel-efficient vehicles more than those who have newer more fuel-efficient vehicles,” Brown said in a statement.
Other types of taxes could be better targeted at people who actually benefit from new roads and transport upgrades, but the cost of building roads and transport will not go away.
Brown vs. Brown
Auckland Mayor Wayne Brown responded to the announcement with a warning that the city would be short $1.2 billion in funding over the next four years.
Auckland Council would have to halt projects, potentially including the Eastern Busway which was highlighted as a Government priority, while it works out how to manage with less funding.
"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 regional fuel tax, some of these projects may very well be cancelled altogether,” he told media.
The missing money may mean residents paying higher rates or missing out on important transport upgrades.
"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," he said.
"Unfortunately, the Government has just made it a lot harder for us”.
A draft policy statement on land transport will be released in the coming weeks and will provide more detail on the Coalition Government’s transport plans.
83 Comments
Yeah! Finally petrol in Auckland can go from being slightly cheaper than in NPL to significantly cheaper than in NP.
So far they have cut taxes to all but the one group that were promised it in the election. Maybe Nicola has already resigned, hence why we haven't heard anything about it.
There is already an alternative source of funding with the road user charges coming on EVs, that have hitherto got a free ride. That's estimated at ~$80M per year, so will offset more than half of what the Auckland surcharge would have brought in.
Brown is dead right about the regressive nature of the tax - those that can only afford a single vehicle and live miles out of the city have been paying way more in transport taxes than, for example, wealthy inner-city land owners charging their Teslas on cheap overnight electricity. So I don't think it's just about scrapping Labour policies.
I'm not sure how you could claim that. The RUC on EVs is currently $0 per 1000km and will be $76 per 1000km come April. That seems like a new source of funding to me. There's no retrospective clawing back of charges for distances already travelled, so not deferred?
What I mean is people that moved out of their petrol/diesel vehicle from which road maintenance funding was being gathered, have deferred their share by moving into an EV. It's just balancing up the books again.
There's a good argument that many in battery degraded PHEV's will be in fact giving new funding.
Even if your battery has gone from 50km to 30km, you have to be doing a lot more than 30km a day to be worse off than just petrol. Might be the case for some but probably not many.
A PHEV with a big battery is the cheapest option. Bolt a generator onto your BEV and call it PHEV.
Why shouldn't you pay more if you decide to live out of town and travel more?
Many out of towners are running all of their vehicles (kids Ute at Uni included) on the business. No gst and depreciation, running costs write off.
I pay the same rego, wof and insurance costs as someone doing 200k a year when my car sits in the garage for weeks on end.
The real question is not who pays, but can NZ afford the cost of the roading system the public want?
Answer...nope.
Why shouldn't you pay more if you decide to live out of town and travel more?
Simple, it isn't a charge based on actual usage, but more so to maintain the network of road that can be used by the public in a region. Our world relies on roads and therefore it is a shared cost to all. How else do the groceries get to supermarkets, mail gets delivered to rural areas etc. End of the day AKL has a large road network which costs more to build and maintain, and unless public transport is prioritised and culturally shifted to being more of a preferred option, the council will continue to keep building and rebuilding roads and more motorways that cost exponentially more over time for the local population, and living out of town comes with ups and downs. Suddenly public transport is looking better by the day.
Yes I get and accept at. Was in my draft post but was getting too long! It shows of course the huge complexities and how to pay.
It is another argument to maintain and spread the cost across entire network and entire population. I assume the roading persons extract the fixed cost of a road from the variable associated with vehicle usage.
Agree they are a bit putting the cart before the horse - but I suppose as long as they spend what is accumulated/unspent and the costs to put in (in particular) road tolling - then that would be wise such that that gets up and running.
I don't agree with targeted rates on properties for this purpose. They will slap these on properties that are in the near vicinity of public transport infrastructure - but to be honest, most folks with money don't want to live near these public amenities - they'd rather live in quieter and less congested neighbourhoods and do park and ride. The reality is although the previous government talk about land value 'up-lift' in these near vicinity areas - you'd be 'up-lifting' that tax from the least advantaged sectors of the population.
For example, there is a big train/bus transport hub here in the Hutt - busy around there all of the time - median-density neighbourhoods being developed close by, but it's not the wealthy buying into those near-vicinity developments. The developer gets an "up-lift" in terms of the development of the land, but the inhabitants get no on-going benefit (aside from being able to walk to the transport hub). The park and ride folk get free parking at the hub - so you could say they would be "free-riding" on the high rates the close in folks are paying via a targeted rate.
"I don't agree with targeted rates on properties" - same.
To me it only makes sense on commercial properties. And how much could you possibly squeeze out of them, probably a tiny fraction of the cost of any transport project. And commercial projects lose a lot of money during the work, e.g. the CRL. To then tax them for the privilege of losing all their customers seems a bit nasty.
I also don't like the idea of people paying for the privilege of living near new transport. Often those areas have put up with poor transport options for ages while other areas had good options. Then when its finally their turn, the rules have changed and they have to pay for it.
I don’t understand what you mean
The fact is that hundreds of thousands of apartments will be possible within walking distance of train stations, which will be part of a much improved rail infrastructure, which has had a fortune spent on it
less investment elsewhere will help focus development in these prime locations. There will be even more value in these locations
How do you plan and fund Infrastructure for sporadic development over huge geographical areas? Impossible. Or at least impossible in any financially sustainable way.
If you stop spreading it so widely you can focus it on where development should really go - central locations near good existing PT, jobs and amenities
For example Kainga Ora (or do they have a new name?) are building 10k houses in Mangere and 11k in Roskill, they were going to be served by light rail. Don't build them? Or add that demand to the existing roads?
I agree that sporadic development over huge geographical areas is crazy, but restricting to three rail corridors, with the central stations near "historical" (rich) areas like Meadowbank, Kingsland, Mt Eden, Remuera, etc, might be a bit too restrictive.
Those KO houses won’t get built, pipe dream. Even if Labour had remained in power, it was a pipe dream. Have you not heard about the woeful progress in Tamaki? They are about 20% of where they should have been by now according to their plans.
I know you loved the light rail because it would have served the area you live in and enhanced your property value, but it was a debacle of a project. Especially when you factor in that the housing plans in Roskill are a joke.
Except with rates you cannot directly attribute the cost to specific transport projects in the public view. So in essence anything that goes into rates becomes more hidden in the mess. The extra rubbish bin collection charges that many properties don't have and cannot access those services for instance are hidden in there. Because if it was user pays it was already stated to be completely unaffordable and pointless.
But because it is hidden in rates out of sight out of mind especially for renters.
It is also why Wellington moving to separate water metering and payment has such a protest against it because it is viewed as a completely new cost, not one they had been overcharged for already hidden in the rates and paying for all the lost water through leaks and high users. So the water metering would actually reduce the costs for many as it would be more true to their own usage & services.
Can;t say it is much of an issue really. I got my last water bill in at around $75 for the quarter, chump change. If wellington had individual water meters they could easily quantify the level of leakage in the pipes and also target areas with greater leakage when prioritising repairs or replacement of their pipes, which would save money for the residents in the long term.
Soo once again, the tax isn't being eliminated its being changed to come from different, easier to avoid if you are rich - sources. And the current tax which for all its issues, is pretty decent at what it aimed to do - encourage people to burn less fuel, and penalise those who chose to continue to burn lots of it. It will cost people with some less efficient vehicles, but not as much as it will cost the rich people driving big UTEs and sports cars....
This will win them votes, but ultimatly mean less efficient tax gathering and ultimatly a worse city to live in.
“Removing this extra tax of 11.5 cents per litre on petrol and diesel means the driver of a Toyota Hilux will save around $9.20 every time they fill up, while a Toyota Corolla driver will save around $5.75”...before they pay the "congestion charge"
The Government wouldn't be removing the fuel tax if they were going to lose money on the deal so it will be interesting to see how much the Congestion Charge is and what area it covers.
Let’s start at the top then - those areas of public welfare that cost us more each year, this being superannuation for over 65s, public healthcare for over 65s, and the corporate welfare given to property investors on their untaxed capital gains. Let’s also throw in the removal of the FBT exemption on utes, because you know - those double cabs aren’t for carrying passengers.
Protip the only excessive welfare going to people who could work and have access to work are those over the age of 65. More excessive then if you took the cost of all other benefits combined, including jobseeker (mostly disabled people), supported living, housing, and for those with babies (where the baby cannot be left to fend for itself).
There are literally no jobs accessible to most disabled people, most of them are literally denied access to work, to employment and many are even denied income support. So you targeting them is just ridiculous and shows a deep level of ignorance of basic physics, maths and even what a job even involves.
Given the lack of education and knowledge about work you must be on one of those excessive benefits yourself.
Protip mate I don't collect a benefit and I earned so much in 10 years from hard labour I could afford early retirement (although I run a couple of businesses and do design & engineering work). When I turn 65 I will be getting a benefit for no reason, none, as a single birthday does not mean I am significantly more or less disabled then before. They don't remove the legs of people who are 65 and give them all severe brain injuries so there is no reason most of them cannot work. We even pay benefits to those in roles in govt who have more income than 90% of taxpayers paid by the taxpayers directly. When I talk of stats I talk of the 99% of disabled people as I am in the top 1% in the country (holding multiple professional degrees, decades experience in multiple industries which is easy when you are working over 80hr weeks). I drink a single malt whisky normally over 18years. I pay more tax for GST then you do for all your income.
But thank you for showing your ignorance on the lives of disabled people has no lower limit. Lets place your knowledge beneath the height of a dog turd shall we.
Or for the many who save their whole life planning for retirement, holding off the holidays and the nice-to haves even on the rare occasion, only to get early dementia or hit by a drunk driver and die. Life is for living, don't bet everything on retirement in case you don;t get there, and on the other end of the spectrum don't squander everything and wind up bitter over your own choices. Everyone has their own balance.
One of the worst elements of our welfare system was summed up to me by person on a disability benefit:
"I am so looking forward to turning 65 as my income will increase substantially and there will be no costs or hassle associated with keeping my benefit"
It is shameful how we discriminate against people with disabilities in this way.
He took a lot of shit over the flooding but to be fair that was inherited maintenance failures. He is not the communications for civil defense (he would run the risk of contradicting more up to date information and communications) and people should look to civil defense for information around issues not the latest media personality. He was not in charge of communications for infrastructure, he was not in charge or personally hired to work monitoring & relief efforts and if every untrained mayor went down to a disaster area they would put people and the civil defense team at more risk and cause a delay in aid because it literally would be a photo op in a high risk zone milking poor people who lost their home for SM clicks.
Auckland Council is incredibly bloated, with 12,000 employees, out of which way too many are paid quite high salaries that would have no justification in the private sector, for the kind of actual added value that they provide. Direct Auckland staffing costs are well over a billion per year.
By cutting in the right places, Auckland Council could easily get rid of at least a couple of thousand employees, while maintaining almost the same level of service.
Moreover, when it comes to services such as road maintenance, the amount of waste and un-necessary spend are simply eye-watering, as is the amount of contractors' overcharging.
He saw how much the team at Eke Panuku Development Auckland could milk out of the public and how hard it was to stop them draining hundreds of millions with no tangible results and realized that CCOs are a law unto themselves. They pay more to managers for "development" that is only going to be ripped out then most the workers installing them receive in a whole year. The pay of worker on ground to manager ratio is something like 1:50. It gets worse with designers making completely unrealistic adverstising and marketing brouchures to blow smoke up the public's arse.
Way back when I was at NZ Post there was circa 10,000 FTE. Running Post shops, collecting mail from street receivers, transporting it, sorting it, and every letter box across the country had a postie walking past it or a rural delivery driver going past it 5-6 days a week, sales team, call centre, corporate office.
What do 12,000 employees do for the Auckland council?
Marketing mostly. Some do physical work i.e. inspections but really most of the team is marketing & design projects or tangent to that. Had a few contracts with the council and seriously most the teams they have in the exorbitant offices really can be replaced with a drinking bird toy (and the effectiveness of their actual workforce is about the same as that).
Throw in a chat bot and hundreds of staff can be cut with no noticeable detriment to services. We don't even need decent AI, just a cheap chat bot from the 2000s.
Local roads, public transport, footpaths, water supplies, sewerage system, rubbish, recycling, landfills, parks, playgrounds, sportsfields, recreation centres, pools, building consents, animal welfare, events, economic development, arts and culture, and probably a lot more.
Amazing savings being achieved by National. Auckland Ratepayers now on the hook to pay for infrastructure Labour was going to fund.
Add this to Three Waters and so far all this coalition is doing is cutting services and increasing the cost of living via rates ..
https://www.nzherald.co.nz/nz/three-waters-hamilton-city-council-says-a…
It is time that we worked out a fairer way to rate, so that we can collect more in rates. Doing it on the property value has no relationship to services people use. That is based on the population and each person using those services. At the moment rates are a form of wealth tax, and they will charge more to higher value properties solely because they think that those people can afford to pay them more. Whereas a low value how could have 10 people living in it, and each person may only be paying about $300 per person a year for all the services council provides.
Yeah - Maggie tried implementing a poll tax in the UK. That didn't go so well...
https://www.independent.co.uk/news/uk/politics/the-battle-of-trafalgar-…
I've done some work on the general rate (i.e., non user-pay and non-targeted and non fixed cost rating components) being based on geographic distance to a center of employment - closer in, higher rates - further out, lower.
By my thinking - many of the larger/more costly of local government amenities and works (e.g., economic development; beautification projects; city center re-development, capacity/volume of services infrastructure, etc.) are enjoyed by those closer to the center based on accessibility and convenience.
This would be handled by switching to only land value rates, rather than the current split evaluation we have. Higher land values are caused primarily by the location being close to amenities; if you're closer to a train station, hospital, school etc. then your land value will be higher (and thus rates can be higher, as you're getting more of an advantage of the rate-funded improvements too).
Yes, agree. And council's can choose to use land value (land only valuation) or capital value (land + built infrastructure/dwelling valuations) when setting and calculating their General Rate. Many council's moved from land-value only to capital value as land values nearer to the centers started becoming the lion's share of the overall valuation - and folks on the full sections in those areas were really 'feeling the pain' (e.g., granny's in the modest value family home for the last 50 years). So, it became a debate about granny's getting rated off their land..
Effectively, switching to capital value favoured the 'leafy' inner suburbs - as much of their earlier burden (based on land-value only) was subsequently transferred/smoothed across all areas in the city/district.
Which is what motivated me to try something that got off the dollar value 'split' (between LV and CV) - and moreover off any kind of 'money' valuation being necessary. In other words, rather than these often incorrect GV's being used to reflect a property's value (government valuations only being done for the purposes of taxation) - I thought to look for some other 'measurement' mechanism. That way, we would go back to the 'old days' when a bank required an individual, professional valuation for lending purposes.
Unfortunately, you can't move anywhere with the specific objective of lowering your rates (even cross-lease dwellings don't afford the owner much of a reduction in rates). Additionally, if distance to an employment center was the factor determining rates - then retirement home complexes and villages would be more likely to sprout up in places on the outskirts - or some distance from the main center, like Kāpiti was favoured years ago because the General Rate was on LV and that made a difference to overall costs incurred by their residents.
Anyone can and should challenge their rates at every opportunity as the data used for the analysis is so exceptionally flawed and missing even what services are available to different suburbs and areas. In many cases there is a drive to overcharge & overestimate rates with a broad stroke of oversimplified code line and hope people don't notice it. The idea that CV is related to market value is a myth that many still like to keep around but it really does miss the mark even on most inner city properties.
Its just payback to their road transport donors, the average motorist / ratepayer is going to be worst off. Then wait and see what they do with the ETS.
I think congestion pricing and tolls are a good thing , but lets not to pretend it is not going to cost motorists more.
typical national, wait for the outcry when people suddenly realise, they pay more in congestion charging than they ever did in fuel. it is all about user pays, i am very surprised they are not trying to bring in something to charge cyclists after, all they use the roads for free.
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