Revealed: Hamilton City Council aiming for regional fuel tax by 2020, documents show

Hamilton City Council thinks it could be the next city to have a regional fuel tax, despite the Prime Minister ruling out any more while under her leadership.

Documents obtained by Newshub show that throughout 2018, the council and the Ministry of Transport discussed the possibility of implementing a sub-regional fuel tax.

Meeting notes from February 2018 reveal the ministry agreed that a legislative amendment to the law could allow for a sub-regional approach which would work for the fuel companies.

The documents also show there was an aim to prepare an amendment and implement it by 2020.

Hamilton's growth and infrastructure committee chair Dave MacPherson says a fuel tax is critical. He told Newshub work to get one over the line will ramp up later this year.

"We're not far off pushing the go button with Government for a second shot at that. A good time to start in the discussions over transport will be over the next year so we can get it locked down to start in just under two years time.

"We've put it on the table with the Ministry of Transport. Beyond that we haven't made any moves but we sure will in about four months' time otherwise we're going to have the gridlock that's been in Auckland."

Hamilton was also encouraged by the ministry to work with Waikato Regional Council on a regional approach. Officials raised concerns about people avoiding the tax by refuelling outside of the taxed area which would be easier in the city.

Hamilton, Waikato.
Hamilton, Waikato. Photo credit: Getty

MacPherson says Waikato District Council want in on the tax too.

"The whole corridor between Hamilton and Auckland ought to be included. Both councils are of the opinion.

"We can't see how some of the important advances are going to be funded unless we can get this. Safety projects, public transport projects, roading projects, they're all being held up because of lack of resources."

Auckland is the only city which has a regional fuel tax with residents paying an extra 11.5 cents a litre (including GST). The law allows other councils to buy in after 2021.

But in October 2018, Prime Minister Jacinda Ardern ruled out extending the tax under her leadership.

Prime Minister Jacinda Ardern.
Prime Minister Jacinda Ardern. Photo credit: Newshub / Zane Small

Despite that, MacPherson has a simple message for the Prime Minister.

"You agreed to a fuel tax in Auckland to fund important transport projects up there, we're growing faster in our sub-region than Auckland is itself on a proportional basis.

"Why would you not agree to it in our area? Let's be logical here, if you don't want a fuel tax, fine, find us another revenue gathering mechanism."

The New Zealand Transport Agency (NZTA) administers the Auckland scheme. The documents reveal the expectation would be that NZTA would do the same in future for other councils.

Transport Minister Phil Twyford declined to be interviewed on the matter. In a statement, he stood by the decision by the Prime Minister.

"The Prime Minister and I have ruled out any more regional fuel taxes. We are not planning on changing the legislation," Twyford said.

"Like many councils around the country, Hamilton was left with a massive infrastructure deficit from the former government.

"I understand that Hamilton City Council wants projects up and running faster and I've asked the NZTA board to roll out our record investment across the Waikato as quickly as possible.

Transport Minister Phil Twyford.
Transport Minister Phil Twyford. Photo credit: Newshub

"Our Government is also working with local councils in the Hamilton-Auckland growth corridor by doing comprehensive medium to long term planning that includes land use and infrastructure to unlock growth."

Act leader David Seymour isn't impressed. He said the Government is "wasting billions of dollars every year".

"What it should be doing is redistributing income to councils so they can build infrastructure, rather than allowing councils to tax us even more," he told Newshub.

"It's an absolute dog's breakfast. The Prime Minister says no more regional fuel taxes, legislation she passed in Parliament says any council can have one, the ministry's encouraging councils to try and have them, and the councils are desperate to get regional fuel taxes.

"It's very unclear who to believe, the Government shouldn't have legislated that any council could have one."

Newshub previously revealed Twyford encouraged Hamilton City Council to pursue the idea with officials to increase the likelihood of a successful application.

Newshub also exposed 14 councils across the country have discussed the possibility of implementing a regional fuel tax.