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.
We welcome your comments below. If you are not already registered, please register to comment
Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.