All of NZ will pay for Auckland's fuel tax - vehicle lobby

Drivers across New Zealand will be paying for the Auckland Council's "political sham" of a regional fuel tax, it has been claimed.

For 10 years starting July 1, petrol in the Auckland region will be taxed an extra 11.5c a litre - 10c for the new tax, plus 1.5c in GST. The council says it'll raise more than $150 million a year to be put towards transport projects, part of a long-term effort to fix the city's notoriously bad traffic.

But Ken Shirley from the Road Transport Users Forum told The AM Show on Friday it's a "myth" that only Aucklanders will be paying for it.

"The oil companies will spread it. We have variable regional pricing now, and that will be spread around the country. This is being done for political reasons - to make the rest of the country think it's being paid by Aucklanders - in fact, it will be spread."

Unleaded 91 currently costs anywhere between $1.95 and $2.45, depending on where you buy it. Mr Shirley is claiming that rather than hit Aucklanders with a flat 11.5c rise, petrol companies will instead put prices up everywhere.

Ken Shirley.
Ken Shirley. Photo credit: The AM Show

He isn't opposed to motorists paying for better infrastructure - but says the Government and Auckland Council should drop the pretence only Aucklanders will pay the new tax.

"Why not just put it on at Marsden Pt where it's a simple one-off transaction, and then dedicate that for local government, with a heap of that going to Auckland? That would be a sensible way of doing it."

Central Government regularly increase the countrywide tax on petrol. National did six times during its nine years under John Key and Bill English. The first increase under the Labour-NZ First coalition is expected to be about 3 or 4c in September.

Even if the petrol companies ringfence the regional fuel tax rise to Auckland, Mr Shirley says Kiwis nationwide will end up worse off.

"Most of our imports come in through Auckland and are distributed to the rest of the country, so inevitably all products, all commodities, all foodstuffs will incur an increased price because of this tax in Auckland... everyone will be paying for this."

Impact on the poor

National has made a big deal out of the fact petrol taxes are likely to have a bigger impact on the poor.

"They are regressive, and hit poorer New Zealanders the hardest," leader Simon Bridges told The AM Show in April.

Mr Shirley, a former Labour Party MP and ACT candidate, agrees.

"They don't have the same options - more fuel-efficient cars or electric vehicles. They don't tend to work in the CBD where you can catch heavily subsidised public transport, so they're dependant on their cars to work in the factories in the outer suburbs."

Labour MP Willie Jackson - also appearing on The AM Show - defended the tax, saying "someone's got to pay for it".

"The reality is we've got to look after Auckland."