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Foolish fuel tax

Foolish fuel tax

NZ Truck & Driver News

 May 2018   
The introduction of legislation enabling the imposition of regional fuel taxes is a retrograde step that will hinder rather than help the Government's infrastructure plans, Road Transport Forum chief executive Ken Shirley believes.

Regional fuel taxes, he says, are "complete nonsense these days….inefficient, full of loopholes and exclusions.

"And therefore the impact on motorists is often inequitable and the revenue gathered underwhelming," says Shirley.

"As a means of raising revenue for infrastructure there's far more merit in a realignment of Auckland Council's assets and the establishment of a road pricing scheme.

"Road pricing or congestion charging has been shown in other parts of the world to be effective and it's also future-proofed against the modern changes in transport technology.

"By its very definition fuel tax relies on the sale of transport fuels. However, as cars become more efficient and the takeup of EVs grows, fuel taxe...

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The introduction of legislation enabling the imposition of regional fuel taxes is a retrograde step that will hinder rather than help the Government's infrastructure plans, Road Transport Forum chief executive Ken Shirley believes.

Regional fuel taxes, he says, are "complete nonsense these days….inefficient, full of loopholes and exclusions.

"And therefore the impact on motorists is often inequitable and the revenue gathered underwhelming," says Shirley.

"As a means of raising revenue for infrastructure there's far more merit in a realignment of Auckland Council's assets and the establishment of a road pricing scheme.

"Road pricing or congestion charging has been shown in other parts of the world to be effective and it's also future-proofed against the modern changes in transport technology.

"By its very definition fuel tax relies on the sale of transport fuels. However, as cars become more efficient and the takeup of EVs grows, fuel taxes become less and less effective. This is backward-looking policy."

Shirley insists that the Government and Auckland Council "would be far better off investing time in developing a fair road pricing regime for some of the city's worst congested routes, rather than mucking around with a blunt and unsophisticated fuel tax."

The National Road Carriers Association is also critical of the proposed regional fuel tax – which it believes will be "nothing more than a stop-gap measure to start funding Auckland's much needed road infrastructure upgrade."

"It's only going to raise a small part of the funding needed," NRC CEO David Aitken says – quoting estimates that the proposed tax will only provide $1.5billion of the $10billion needed in the next 10 years.

NRC members, he says, "would be more prepared to pay road tolls or congestion charging to fund progress," says Aitken.

"The members' biggest concern is congestion and the delays it causes to doing business. An RFT is not going to change that, but tolls and/or congestion charging will make road users re-assess whether they need to use particular roads or motorways."

Aitken points out that the Auckland Transport Alignment Project report has recommended tolls and congestion charging as the best way to fund future infrastructure and start relieving congestion. And that project included input from Auckland Council, Auckland Transport, the Ministry of Transport, Treasury, State Services Commission and the NZ Transport Agency.

And yet, says Aitken, proposals made in the ATAP report "have gone nowhere: Local and central government have been sitting on their hands. That includes projects that have been ready to go."

Aitken also makes the point that the path to the proposed RFT is "hardly a quick process. We need to be getting on with things now."

While an RFT increases costs for everybody, tolls and/or congestion charging is "user pays – and delivers the users benefits. Implementation requires more investment but the economic benefits outweigh the costs."

The ATAP project report suggested tolls had three times greater economic benefit than a regional fuel tax, Aitken points out.

Congestion charging is being applied in cities worldwide – limiting traffic volumes and raising revenue. While tolls are already used elsewhere in NZ – on State Highway 1 between Orewa and Puhoi and in the Bay of Plenty, for instance.

"We know Auckland is growing faster than projected, so the need to get on with things is even greater."

Aitken says that the NRC supports increased spending on public transport and the drive to increase patronage to get single-use vehicles off roads – "but we also know the population is growing faster than increased use of public transport, so there's going to be more vehicles on the roads."

"A fuel tax will provide some funding straight away," says Aitken: "But road pricing, once it's set up, has much greater benefits."


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