Nailing Feet to the Floor

Fuel Taxes are Regressive Devices 

They Hurt the Working Poor

Daniel Newman
Stuff


If Prime Minister Jacinda Ardern wants to uncover the root cause of motorist's pain at the pump, she need only look in the mirror.  Labour has directed that the price of petrol and diesel is to rise by 3.5 cents a litre every year. On top of that, the Labour fuel tax hit Auckland motorists by an extra 11.5 cents (including GST) a litre on July 1.

This is precisely the reason why my Labour colleague Councillor Efeso Collins courageously voted against the Auckland-version of his own party's fuel tax agenda. Speaking during that debate, Collins stated the obvious: "These taxes hit the poorest the most."

Therein lies the problem for this government: Labour planned it that way.

Around $1.25 per litre is taken in excise taxes and GST. That money is taken by a government that needs a massive infusion of Crown revenue through both direct and indirect taxation to fund its budget programme.

Many of us have admired the Prime Minister's statesmanlike performance on the international stage. But charming technocrats at the United Nations in New York is no substitute for dealing with the plight of the working poor in suburban South Auckland; the very people who helped elect this government are now bleeding through their skinny wallets.

These are arguments that a minority of us made earlier this year. The response? Ministers and their coterie of vested interests (starting with Auckland Mayor Phil Goff) chided us for being knockers and nay-sayers.


Labour has directed that the price of petrol and diesel is to rise by 3.5 cents a litre every year.
Transport is a difficult proposition for governments. The formula requires years of financial pain with little or no benefit in the form of new transport capital infrastructure in the short term. But even this conundrum is being exacerbated by the Government Policy Statement on Land Transport.

While motorists previously paid for new state highways and arterial roads, that money is now being significantly diverted to fund experiments like slow-moving light rail in Auckland.

A government that is wholly committed to taxing the poorest commuters for the purpose of fundamentally changing busy arterial road corridors in Auckland so that we the sceptics and non-believers can enjoy trollies that travel at less than 25 km/h at full throttle.  How's that for transformation? Do you feel short-changed yet?

I represent the Manurewa-Papakura Ward; some of the poorest people in Auckland are my constituents. Around 80 per cent of my constituents travel to and from work via a car. I represent shift workers, taxi drivers, mums and dads who drive their children across the city, people who need groceries, people whose movements are complex and who cannot easily align with a rigid timetable for a limited bus service.

​Trollies on Dominion Rd do not add to the transport choice available to my constituents, and the Prime Minister's pollsters must surely be telling her that.

The punitive application of fuel taxes that trigger the wholesale redistribution of wealth from the poorest with the least choice to enable greater transport choice (albeit slow and inconvenient) for those who have the most is a conundrum that demands a political distraction. And so it is that the Prime Minister has singled out fuel companies.

The public has a right to know who is doing the fleecing. Fuel companies are not charities and New Zealand is at the furthermost reach of a long global commodity chain. The most obvious concession to relieve motorists' pain is the thing the government can control: Its insatiable appetite for tax revenue.

The challenge for the Prime Minister is this: How do you distract the majority of New Zealand workers who are reminded of their financial pain every single week? This will need more than a diversion, it requires a policy change.

Daniel Newman is an Auckland Councillor representing the Manurewa-Papakura Ward