Wednesday, July 02, 2008

Labour legislates to allow more fuel tax

Yep according to Stuff, regional councils will be able to levy up to 5c a litre to pay for big road projects (you know the ones that the users of the road wont pay for) and another 5c to pay for transport other people use, like public transport, walking and cycling.
*
Labour is making it seem soft by requiring it only be 2c a litre in the first year, but you can be sure that local government will take full advantage of tax powers that it can't be fully accountable for.
*
This is an appalling way to raise funds for transport. It includes an excise tax on diesel, for the first time in many years, and will mean that again all motorists will pay for projects that only a few benefit from. It will also create an appalling boundary effect between regions. You can be sure service stations at the edges of Auckland and Wellington, which will be keen taxing regional councils will lose out, whereas those on the edges of Manawatu-Wanganui, Waikato and Northland will gain from having lower fuel tax. Fill up in Eketahuna not Masterton, or Levin not Otaki.
*
This tax is unnecessary, current spending on roads and public transport is at a record high. There needs to be a serious review of the quality of that spending, and the ambitious plans of ARC to build a huge electric railway system that will need enormous subsidies need some cold-hearted hard analysis. Similarly WRC's love affair with Transmission Gully needs the same. Motorists are paying record fuel prices already, and to hit many of them for the benefit of a few, for particularly poor value projects, is not good public policy.
*
National's first transport policy priority if the wins the election is to do a serious review of the economic efficiency of the projects likely to be funded by this measure, and the other major projects underway, both road and rail. Labour has poured a fortune into building roads and subsidising public transport, much of it long overdue, but I suspect it has gone too far, too fast and in the wrong ways. Of course this is what happens when other people's money starts being reallocated on the basis of politically determined strategies.

No comments: