Jacinda Ardern has ruled out approving regional fuel taxes beyond Auckland while she’s Prime Minister.
During Question Time on Wednesday, she said: “I can give this guarantee to this House and to consumers – there will be no other regional fuel taxes while I’m Prime Minister, which at the moment feels like it might be for a while.”
The Land Transport Management (Regional Fuel Tax) Amendment Act 2018 restricts the introduction of a regional fuel tax to Auckland until at least January 1, 2021.
However, while being questioned on fuel prices by National Leader Simon Bridges, Ardern said that even after 2021, she would prevent regional fuel taxes from being introduced to other parts of the country if she was still Prime Minister.
Bridges responded, saying: “Did she just make that undertaking on the hoof because she knows how much this is hurting kiwis all over the country?”
Ardern snapped back: “Mr Speaker, I made that statement because that member is circulating false information.”
Bridges on Wednesday morning told the AM Show that a source had told him Wellington City Council was in “secret talks” with the Government over introducing a regional fuel tax.
Wellington Mayor Justin Lester rejected this claim shortly after, while Transport Minister Phil Twyford said the Government had “explicitly ruled out a regional fuel tax in Wellington”.
National's Transport Spokesperson Paul Goldsmith later in Question Time asked when the Transport Minister knew about the policy change.
Associate Transport Minister Shane Jones conceded: "When the Prime Minister stood up.”
Local councils: Fuel taxes aren't ideal. The AA: They aren't necessary beyond Auckland
Bridges in a media release said that while New Zealanders would be relieved, the 14 other councils that had started discussions with the Government about introducing a tax would be “surprised to hear about the Prime Minister’s backdown”.
Asked by interest.co.nz what their responses were, Local Government New Zealand President, Dave Cull, said: "We think there needs to be better alignment between local council revenue and growth, to encourage councils to embrace growth and find ways of funding their own infrastructure without the need for fuel taxes.
"For example, if the Government gave councils a share of GST generated in their area they would have a clear incentive to provide infrastructure in a timely fashion because any uptick in economic activity would boost their revenues.”
The Ministry of Transport, in a Regulatory Impact Statement (RIS) statement it prepared before the Land Transport Management (Regional Fuel Tax) Amendment Act was enacted in June, said: "Outside Auckland, Wellington and Hamilton City Councils have expressed an interest in alternative funding arrangements to bring forward transport projects in their regions."
It referenced Hamilton Mayor Andrew King saying: “We will be working hard to collaborate with the new Government on additional funding opportunities such as a regional fuel tax, infrastructure bonds and loan structures to reduce any rates increase for Hamilton.”
The RIS also acknowledged funding gaps in other regions, saying: "Recently train improvements in the Wellington region, including more frequent and reliable services for the Hutt Valley, were put on hold because the Wellington Regional Council had not found the $30 million needed to pay for them."
However it said: "The AA believe other parts of the country do not face infrastructure pressures as critical as those of Auckland, and are not set to create the same burden for taxpayers on a national scale."
A 10-year regional fuel tax of 11.5 cents per litre (including GST) was introduced in Auckland on July 1.
Under the Land Transport Management (Regional Fuel Tax) Amendment Act, revenue from a regional fuel tax can be used to fund transport projects proposed by a regional council and approved by joint Ministers (Finance and Transport) after public consultation.
You can see the list of projects that revenue from Auckland's regional fuel tax will be used for here.