The Government is this week further hiking fuel tax. My concern is the impact on Nelson families and businesses and that they are at the same time reducing the investment in our local roads.
The extra 3.5c/litre tax comes into effect Monday 1 October and comes on top of the 11.5c/litre hike on 1 July for the Auckland regional fuel tax. Officials warned the Government that fuel companies would impose the extra regional tax where there is the least competition. They were right and South Island communities like Nelson are paying the most.
This sharp rise in fuel taxes is despite Labour promising no new taxes during this Parliamentary term. Prime Minister Ardern argues it is a duty and not a tax. That does not wash.
Tax now makes up 50% of the cost of petrol when you add the excise, GST, regional fuel tax, ACC levy and other levies. Petrol in Australia costs $1.59 a litre and the huge difference is the tax. This difference will further grow with Labour promising further hikes in 2019 and 2020.
Fuel taxes have previously been increased but not as quickly or by as much. Petrol cost 91 cents a litre in 2000 increasing to $1.77 in 2008 under the Clark Labour Government, rising 8% per year.
It went from $1.77 in 2008 to $1.96 in 2017 under the Key/English National Government, rising 1% per year. The rise from $1.96 to $2.35 under the Ardern Labour Government is a 20% increase in the first year.
Families are not just hit with the extra $20 when they fill up. Fuel costs affect everything from vegetables, bread and meat, to the cost of the plumber. This is just one of many areas where the Government is imposing extra costs that will impact on the cost of living.
These hikes in road user costs mean Nelson and Tasman will be increasing our contribution from $100m to $110m a year to the National Land Transport Fund. I might accept the extra $10m a year in costs if it were being invested in our roads but the Government is simultaneously reducing the funding for State Highway upgrades by 70%. The $135m National committed for the Southern Link is gone. Mayor Richard Kempthorne was rightly ropeable that there were no funds for upgrading the deadly Appleby section of State Highway 60. The upgrades proposed for Motueka and the Whangamoa have also been deferred. Instead the Government is putting billions into their pet tramway projects in Auckland.
This is not just about cost but lives. Our regional road toll is ugly and growing. Our most dangerous roads are in areas where investment has not kept up with growth. The safety data on new stretches of highway like the Ruby Bay Bypass that National completed in 2012 shows highway upgrades save lives.
Nelsonians are being asked to pay more for less. It is highway robbery.