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2/5/2018 — Oil and Gas
National demands fuel tax must go
By Dene Mackenzie

The Government's regional fuel taxes and the decision to end oil and gas exploration in New Zealand would be overturned by a National government, leader Simon Bridges said on Monday.

In his first speech on the economy, Bridges told an Auckland audience the fuel tax was important to them.

“The tax is not needed, the enforcement is complicated and it will hit you in the back pocket.”

A typical Auckland family would have to pay about $700 extra a year as a result of the fuel taxes announced by the Government, he said.

The legislation allowed for a regional fuel tax to be rolled out in other areas around the country. Already Christchurch was saying it wanted it.

“My commitment is we will repeal the regional fuel tax legislation.”

Auckland Mayor Phil Goff said Bridges' policy of overturning the regional petrol tax was what people said in Opposition.

“I would be very surprised if any future Government took away, effectively, $4.3 billion of funding without suggesting where that funding will come from,” he said.

The regional fuel tax was expected to raise $1.5 B over 10 years but with Government subsidies and other funding sources leveraged to $4.3 B of spending on transport, he said.

“Oppositions often say things at the time but come around to accepting that the new status quo actually does makes sense and I think the National Party would find that as well,” Goff said.

A National government led by Simon Bridges would invest heavily in transport but it would not use a regional fuel tax to do so, Bridges said.

Road Transport Forum chief executive Ken Shirley said in imposing a regional fuel tax on Auckland, Auckland Council and the Government had shown “absolutely zero” understanding of the retail fuel market and how prices were manipulated and massaged around the regions.

It was obvious fuel companies would spread the regional fuel tax out around the country from July 1 to soften its impact in the Auckland market. Already there were major price differences region-by-region. It would be almost impossible for NZTA to adequately police the issue.

The Government would have been better off just increasing the general fuel tax, which was applied as a one-off transaction at the refinery, and specifically target that component to Auckland's transport needs, Shirley said.

“By trying to be cute with a regional fuel tax, Auckland Council and the Government have naively played right into the fuel companies hands.”

Focusing on the oil and gas exploration cuts, Bridges said the Government was quick to claim there would be no job losses. However, the confidence was somewhat undermined by making the announcement to students in Wellington rather than fronting up in Taranaki and talking to the thousands of people whose jobs and livelihoods depended on the industry.

On the day the announcement was made, Bridges was in New Plymouth visiting Fitzroy Engineering which employed about 400 people. Within hours, the company said there would be no more investment and no more hiring. He knew the impact on his business better than the politicians in Wellington.

“The really tragic thing is the main reason for the ban doesn't even stack up. The environmental effects will be perverse.”

Gas would drive up over the next decade and industries deepening on gas would be forced to switch to coal which had much higher emissions. What mattered for the environment was not how much oil and gas NZ produced but how much it consumer.

The only people to benefit from the Government's policy were big oil producers overseas, he said.

*Dene Mackenzie is political and business editor of the Otago Daily Times.

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Simon Bridges.