Possible Fuel Tax Reduction Debated

March 13, 2009 New Zealand Taxation  No comments

Some indications have surfaced that point to the government’s planned hike in Auckland’s regional fuel tax might be scrapped.

As current plans stand, Auckland region will see a 2 cent increase in petrol tax on the 1st of July. This will be followed by further increase which will see the level of tax rise to 9.5 cents per liter by 2011. This is topped also by an increase of 1.5 cents to the national fuel tax every year until 2012.

Transport Minister Stephen Joyce has voiced his concern about the pressure of these rises upon the economy. Although the money from the tax rises has already been earmarked for the electrification of Auckland’s railway system. If the tax were to be cancelled, it could have serious repercussions on the Auckland Regional Council’s plans, especially since budgeting has already been complete and tenders have been invited for the supply of rolling rail stock. According to Labour transport spokesman Darren Hughes, a cut in the regional tax will see the rail electrification as either unfeasible or requiring national borrowing. This is a cause for concern to some as any borrowing will be affect all New Zealanders.