No petrol tax, for now

With petrol prices at record high levels, councils will now have the ability to impose a regional fuel tax from 2021.

Despite recent reports that the Waikato Regional Council (WRC) are considering imposing a fuel tax, the WRC has denied the tax is on the table.

“Waikato Regional Council is not considering implementing a fuel tax,” a regional council spokesperson said, going on to say that it did however support recent provisions in legislation to allow them to in the future. If they did, Cambridge could be included, as the town falls under their jurisdiction.

“The Waikato Regional Transport Committee – which comprises regional councillors, representatives of the region’s local councils, the NZ Transport Agency and NZ Police – submitted on the Land Transport Management (Regional Fuel Tax) Amendment Bill supporting provisions within the Bill that allow all regional councils to levy a fuel tax from 2021,” the spokesperson said.

“Neither the Regional Transport Committee, nor Waikato Regional Council, have discussed implementing this provision in 2021 when the Bill allows this to happen,” they added, but a provision in the Waikato Regional Land Transport Plan does contain an implementation measure allowing for a regional or sub-regional fuel tax.

The Waipa District Council has not discussed introducing a regional fuel tax and did not make any submission to the select committee, however the Hamilton City Council (HCC) was on last week’s reported list of councils considering a fuel tax.

Presenting to the Select Committee for the Land Transport Management (Regional Fuel Tax) Amendment Bill last month, the HCC said that a fuel tax would allow for improvements to safety on the city’s transport network and a reduction in traffic congestion earlier than would otherwise be possible.

The submission was delivered by Councillor Dave Macpherson, Chair of the Council’s Growth and Infrastructure Committee, and by Blair Bowcott, the Council’s Executive Director Special Projects.

Mr Bowcott said Hamilton’s presentation was well received.

“We are supportive of the Bill and are seeking an amendment to allow a fuel tax on a sub-regional basis, such as Waikato District and Hamilton City Councils,” Mr Bowcott said.

Hamilton residents will not have to worry about a ‘double-whammy’ tax hit, however.

The WRC spokesperson said: “Waikato Regional Council is aware that Hamilton City Council is seeking a regional fuel tax for its geographical area. There would only be one fuel tax scheme at any time in Hamilton”.

The Bill has allowed for councils to impose a regional fuel tax, with Auckland City Council imposing a 10 cent per litre tax (taking it to 11.5 cents when GST is added) on petrol sold in Auckland from July 1 for the next 10 years. The funds raised will help to fund the Auckland Transport Alignment Project – a $28 billion upgrade of the city’s transport infrastructure, to be undertaken over the coming decade.

The Bill allows other councils to introduce a regional fuel tax from 2021.

According to the AA, 66.484 cents per litre of the pump price is going to the government as an excise, with GST going on top of that – making the GST a tax on a tax.
Here’s the breakdown on the petrol tax we pay now:
·         59.524 cents – National Land Transport Fund
·         6 cents – ACC Motor Vehicle Account
·         0.66 cents – Local Authorities Fuel Tax
·         0.3 cents – Petroleum or Engine Fuels Monitoring Levy
There are no excise taxes on diesel other than the 0.33 cents Local Authorities Fuel Tax, and GST. Instead, diesel vehicles pay Road User Charges. All fuels also pay an Emissions Trading Scheme levy of approximately three cents per litre.

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