Wednesday, February 28, 2024

Government axing regional fuel tax

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Transport Minister and Pakuranga MP Simeon Brown, left, with Prime Minister and Botany MP Christopher Luxon. File photo supplied

Motorists in Auckland will soon enjoy lower petrol and diesel prices.

The coalition Government announced on February 8 that it’s axing the controversial Auckland Regional Fuel Tax, which added more than 10 cents a litre to the price of fuel in the city.

Transport Minister and Pakuranga MP Simeon Brown says the tax will end on June 30.

“Since July 1, 2018, Aucklanders have faced an additional 11.5 cents per litre tax on fuel, over and above what the rest of the country pays, increasing the cost of living at a time when they can least afford it.

“Ending this tax is one way to reduce the price of fuel and ease some of the financial pressure facing households in our largest city.”

Brown says removing the extra tax of tax of 11.5 cents per litre on petrol and diesel means the driver of a Toyota Hilux ute will save around $9.20 every time they fill up, while a Toyota Corolla driver will save around $5.75.

“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.

“We intend to fully remove the legislative framework for regional fuel taxes.”

As of September 2023, about $780 million in Regional Fuel Tax (RFT) revenue had been raised, with about $341 million remaining unspent.

Brown says the RFT was supposed to help fund important projects such as Mill Road and Penlink.

“While Mill Road was cancelled, and Penlink received full Crown funding, Auckland Transport has used RFT revenue to fund many non-roading projects including more cycle lanes, red-light cameras, speed humps, and lowering speed limits across the city.

“I’ve discussed the unspent funds with Auckland mayor Wayne Brown and signalled our intention they are to be spent on projects which are of mutual priority to the Government and Auckland Council.

“These projects include the Eastern Busway, City Rail Link electric trains and stabling, road corridor improvements, and some growth-related transport infrastructure.

“Legislation removing the RFT will require Auckland Transport to only be able to use the remaining RFT revenue and unspent funds towards delivering these projects.

“The coalition Government is committed to working with Auckland Council to ensure we build the infrastructure Auckland needs, and at the same time unlock the funding and financing tools they need to help fund their share.”

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