Kerre Woodham: Politicians need to stop ruling out raising the fuel tax

Labour has jumped on the no new taxes bandwagon, promising that if they're elected, there'll be no increase on the fuel excise duty for their first term.

I don't know why Labour and National don't just join forces and be done with it and leave the left hand side to the Greens, Te Pāti Māori and the Opportunity Party.

The fuel excise duty is due to rise by 12 cents a litre from January, followed by a 6 cents per litre rise in 2028 4 cents per litre in subsequent years.

The thing with taxes and excise duties, tariffs, whatever you want to call them, they provide an income. Without money coming in, as Transporting New Zealand pointed out, there'll be no money for new roads, for roading repair and maintenance, and any money saved from not having to pay more for petrol will show up in the cost of living through the increased price of goods because it's going to take longer for trucks to get places.

The government's position is that it is unlikely the fuel excise duty will be increased in January, although there'll be discussion around the cabinet table and a decision will be announced soon.

National's view is that the increase should be delayed.

But the fuel excise duty is set at a flat rate per litre, currently around 70 cents, and that has meant that as inflation and the cost of petrol rises or falls, the excise duty stays the same, and in real terms it means the fuel excise duty has fallen by 21% since the last increase in 2020 while at the same time the cost of repairing and maintaining and building new roads has risen.

Finance Minister Nicola Willis told Mike Hosking on the Mike Hosking Breakfast this morning that they don't want to raise the fuel tax at all, but they accept down the line they just might have to.

We can't forever put it off. The current circumstances are not only the heightened oil price, but also we are still recovering from that heightened inflation that the oil price has come on, and we recognise that things are still very challenging for people.

Ultimately, where we want to get to is that we've got growing economy, low inflation, and actually we can lift the petrol tax in small, modest, regular increments so that we know there is funding going in to maintain your local roads.

Because the issue is, if you're not putting more money into roads, you get potholes everywhere, you get bridges that get washed away in major cyclones that can't be rebuilt, you get road closures that can't be fixed up.

These are problems that occur for everyone. And so that's what we're conscious of.

I think, you know, Chris Hipkins' policy yesterday, it's really just a fig leaf because we're putting him under heat on his tax plan.

Like it or not, we need to pay taxes if we expect to keep services running and to build stuff. If we haven't got money coming in, then there isn't the money to spend on the services. And what it's kind of a trust, a pledge of faith between ourselves and the government.

Yes, we will pay taxes, you will spend them wisely on the services that we as a community need.

And I think we've been let down by successive governments in terms of how they've spent the money.

They've spent it thoughtlessly, they've spent it carelessly, they've spent it on vanity projects, pet projects, all the things they accuse councils of doing, governments have done themselves.

The last lot were just wanton in their irresponsible, irrational spending.

Even taking into account the spending, the necessary spending that needed to be done during COVID, so much of it was wasted, and that's not coming from me, that is coming from my old boyfriend who was the Auditor General, whose comments I just loved, whose reports I just loved because he was able to get the information. 

He's not my boyfriend, that was in my mind. I just loved his reports, I loved the way he wrote and the way he pulled no punches.

So you have an accord between the taxpayer and the government. We will pay taxes, you will spend it sensibly and wisely, and we have been let down, so I think we're a bit anti tax because of that.

But we do need to contribute either through taxes, through duties, through tariffs, through GST, whatever you want to call it, we need to contribute to keep the country going. And a fuel tax seems to be one of the fairest.

You can also see where it's going.

A tax by consumption has always been the fairest way to tax.

It's a bit like GST. The more you spend, the more GST you pay, and that seems about right.

If you've got the money to spend, then we can take the GST off you.

The more fuel I buy, the more road I'll be using, the more tax I will then pay to maintain the roads I'm using, and that seems fair.

If you're somebody who does not drive, yes, you might have to pay a little bit more if the fuel tax goes up because the price of goods will go up, because perhaps the buses will go up, public transport, but only a little bit, and you won't have to pay as much as I do if I'm using petrol to get from point A to point B.

Of all the taxes, if the fuel tax is ring fenced, this is one I don't mind paying, and accordingly, I don't mind seeing it keep pace with inflation.

I think they're doing the wrong thing by saying no raise in the fuel tax.

They'll have to get the money from somewhere, and I'd far rather see the transparency that comes from having a ring fenced tax that's paid by road users and is spent on road users. 

LISTEN ABOVE