Kerre Woodham: Hiking the fuel tax would take political courage

It's not often you hear people moaning that taxes should be put up, but we live in interesting times, people. Prime Minister Christopher Luxon and Transport Minister Chris Bishop yesterday announced that the Government had scrapped the 12 cents per litre fuel increase, with equivalent increases to road user charges, that were planned for January 1st next year.

It's kind of expected that they would – they'd staged on for so long and it's an election year – are we seriously going to expect a government that is fighting to be re-elected to put up any costs for consumers in the next few months? Not really. So the next expected increase of 5 cents per litre will be on January the 1st 2028. To cover the lost revenue, the Government plans to top up the National Land Transport Fund at an expected cost of $1.5 billion over the forecast period, using its $450 million rainy day fund and finding the rest somewhere else. They're not saying where it's going to come from, they're saying that they'll release that later.

Transport Minister Chris Bishop told 1News last night the increases couldn't be delayed indefinitely without damaging the transport network. Unless they begin again soon, the financial foundations of our land transport system will be undermined. Luxon argued the extra breathing room before the hike gives New Zealanders more time to recover from a prolonged period of post-Covid economic pain and ongoing global uncertainty around the energy prices. The pair also said, look, the regular fuel hikes that are planned in later years are necessary and people will be able to pay for them because they're saying that the country's economy will strengthen in the years to 2030, so we'll all be able to afford them.

Labour has said it will freeze fuel excise hikes for the three-year electoral term if it becomes government.  Either way, we're not going to be paying anything whether Labour or National gets in for the next year. But transport and infrastructure leaders aren't happy about that – they've said both parties are playing politics. Well, yeah, it's an election year, they've got to be re-elected. AA fuel spokesperson Terry Collins said the "what to do" about the fuel was a problem of the Coalition's own making. When they came into power, they wiped the 3 cent annual increases that Labour had announced. If they'd maintained those, they wouldn't be in the same predicament that they are today.

Infrastructure New Zealand Chief Executive Nick Leggett said the decision was because of election season and ultimately would end up costing the country more. He said, I understand the politics, but it's become a race to the bottom. The right decision for New Zealand now and in the future would be to let those fuel excise increases continue as planned. It would take political courage to do that. I don't think there's much courage around with just a few short months and the polls looking the way they're looking. Every vote will count and raising excises, duties, taxes, tariffs, whatever you want to call them, is not going to be popular.

Even the Greens say bring on the fuel excise tax. The Greens say freezing the fuel excise will make our roads worse, defer maintenance we badly need, and leave people with fewer options for getting around. They say it also shows that neither party is committed to the recommendations in the National Infrastructure Plan.

Now, it's hard to believe if you are new to this country or new to this radio station, but potholes were a major election issue last time round. Remember when we had entire hours devoted to potholes? A pothole hotline was set up as a way of getting elected, a promise to set one up and then delivery on that promise from ACT. The state of our roads is an election issue, and we need money to pay for them. It's expensive, it's time consuming, it costs productivity if the roads are in poor shape. Everybody has got their favourite stretch of road or their bête noire of a road that is just hell to drive. Potholes and the state of the roads were shredding tyres and we had collectively, if you add up all the hours we spent talking about it, probably days before the last election talking about the state of our roads.

Helen reminded me that we received a text a few days ago saying the roads have never been in better shape according to a truckie who travels the route regularly. He said that potholes are vastly improved, that the roads are in much better shape.  Can you say that the Coalition Government has delivered on their roading promises? Will they be able to keep those promises without the money going into the roading and maintenance coffers over the next year? I mean it is going to come from somewhere, National have said that they'll top it up, but that's debt we're not paying back. What is the right thing to do? I mean yes, it would take political courage, but as the Opportunity Party says, you've got to be in power, you've got to get into Parliament to be able to enact your policies. So National, the Coalition Government, probably feel it's better to get into the seats of power, into the seats of governance, and let the fuel excise slide just for now, they'll find the money from somewhere for the roads.