Comment: Auckland regional fuel tax sham

By: Ken Shirley, CEO Road Transport


RTF comments on the regional fuel tax policy that is taking place in the Auckland region

The political sham that is the Regional Fuel Tax (RFT) has now been implemented in Auckland.

Petrol -tax

The simple fact of the matter is that the only ‘regional’ aspect of the tax is where the money will actually be spent. On that point, the Road Transport Forum and its associations certainly aren’t opposed to motorists, including truck operators, paying their fair share for better transport infrastructure in Auckland.

The National Land Transport Fund already exists on a user-pays basis and excise or road user charges collected in one region inevitably get used for roading projects in other regions. It’s a ‘national’ fund at the end of the day.

What we do have a problem with is that the Government and Auckland Council keep maintaining the charade that the RFT is an Auckland-only issue. Either the Government and Auckland Council are totally naive or they think the rest of us are just plain stupid because even before the blatant price spreading tactics exposed in the recently-leaked BP e-mail, motorists have known that fuel companies spread their pricing across the country to maintain competitiveness.

Unfortunately, the regional fuel tax policy shows a complete disregard for the realities of the New Zealand retail fuel market and how prices are managed to in certain regions (i.e. the Gull effect).

The Government would be far better off just further increasing the general fuel excise at Marsden Pt, where it’s a simple one-off transaction, and then dedicate that portion for local government use in Auckland. That would be a sensible way of doing it and would at least mean that Transport Minister Phil Twyford and Auckland Mayor Phil Goff were being honest with motorists.

It was particularly telling that in the days following publicity of the BP email that neither Twyford, Goff, nor Prime Minister Jacinda Ardern could explain to media how the Government would prevent fuel companies from spreading the charge outside the Auckland Council boundaries. They almost seemed surprised by the line of questioning as if neither the Government nor the Council had even considered that there was such a possibility.

Major regional price differences in fuel make it basically impossible for the Government to accurately detect the spreading of the RFT across the country.

Sure, on 1 July, when the tax initially comes on, the fuel retailers and the media will make a big song and dance of pointing to the extra 11.5c per litre on Auckland’s fuel, but over time, NZTA will find that adequately policing the regionality of the new tax with any degree of veracity is a hopeless task.

Inevitably, all products, all commodities, and all foodstuffs will incur an increased price because of this tax. Everyone will be paying for it, both at the pump and on the goods in their supermarket.

The Government should not have hidden from that fact and from the beginning should have set itself to win an honest political argument that while the tax may hurt initially, the resulting infrastructure projects would be worth it.

RTF annual conference 2018

Finally, don’t forget that the Road Transport Forum Annual Conference, including the New Zealand Road Transport Industry Awards, is coming up on 26 and 27 September.

For those interested in attending, exhibiting, or sponsoring, the conference website, including an online registration facility, accommodation options, sponsorship packages, and draft programme is now online and available at rtfconference.co.nz.

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