10 September 2005

Petrol musings the latest flip flop

National’s musings on petrol tax reductions beggar belief given it is only a few days since the party ruled out the possibility, says Finance Minister Michael Cullen.

“Don Brash needs to come clean and tell New Zealand if National is about to execute another flip flop,” Dr Cullen said.

“Don Brash’s shadow budget has already allocated all the revenue from excise on petrol into land transport. If Don Brash is to cut this revenue, he will have to cut back National’s roading promises. He should tell New Zealanders, and particularly Aucklanders, what road projects he would put on hold. Will his promise to complete the Western Ring Route be gone by lunchtime today?

“Either way, the National Party’s latest musings are little more than appallingly bad policy making on an ill-shodden hoof. If international oil prices were to rise even higher, would National forgo even more revenue?

“Don Brash claims to be financially literate. If he is, he would know that government revenue does not rise when petrol prices rise; if anything it’s the opposite. He should also know that New Zealand has one of the lowest petrol pump prices in then developed world, and one of the lowest proportion of tax to the overall price.

“This is grossly irresponsible. It suggests a certain panic in National’s ranks after the last week when Don Brash’s self-styled image as an honest, trustworthy person was left in tatters. These latests musings certainly reinforces the growing perception of National’s duplicititious lack of honesty,” Dr Cullen said.

National’s musings:

New Zealand Herald, Sep 2 2005

National finance spokesman John Key said it was unlikely National would cut excise off petrol.

"The moves that are taking place are dwarfing any of these minor changes that have occurred around the 5c increase in petrol tax and the like. Secondly, we have committed that revenue to building roads."

He denied petrol prices hitting the economy - and therefore the tax take - would impact on National's tax cut as it had been budgeted "conservatively".

"We will ride through the revenue constraints that we may or may not have."

New Zealand Herald , Aug 27 2005

Dr Brash, who wants all petrol taxes diverted to the Government's general account to be put into roading, said his party could not afford to wipe the April levy while also cutting income tax.

At his session with Grey Power's Counties Manukau branch, he was asked two questions about petrol prices and the hardship this was inflicting on superannuitants.

Dr Brash said benefits flowing to superannuitants from increases in after-tax income "should cover the increase in the price of petrol".

He said there was a pressing need to invest the petrol tax money into the roading network.

Dominion Post, 26 August

National's finance spokesman John Key said National had no plans to remove the excise tax imposed by Labour if it were successful in forming a government.

ENDS

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