Govt Announcement Win-win For Motorists - MTA

Cutting taxes on fuel without impact on funding for major roading projects is win-win for motorists.

The Motor Trade Association has been calling for the Government to address the level of tax on fuel, either through GST or other taxes.

“We agree with the Prime Minister that there is an acute energy crisis and it’s hitting many hard-working Kiwis in the hip pocket,” Ian Baggott, Sector Manager – Energy and Environment says.

“The only winner out of recent price hikes has been the Government. With every rise, the increase in GST swells Government coffers.

“So it’s only appropriate the Government is the one to take a cut in revenue – essentially that’s what many Kiwis have experienced.”

The Government announced this afternoon a 25 cent/litre reduction in the fuel excise tax and equivalent reduction for road user charges.

MTA also welcomes news that the National Land Transport Fund, which pays for transport projects and maintenance, will be topped up by $350 million for the three-month period to compensate for the reduction in levies.

“That’s win-win,” Ian says. “Good news at the pump, but not at the expense of important infrastructure.”

About 77 cents of every litre of petrol is made up of direct fuel taxes, plus an extra 10c in Auckland.

GST is then applied on top.

Around 70 cents a litre goes to the National Land Transport Fund.

Fuel companies have been forced to increase prices because of the conflict in the Ukraine and the rise in the price of crude.

“Generally the public has been really understanding of the situation,” Ian says.

“We appreciate that consumers have identified overseas factors as causing recent rises.

“We are now confident that petrol companies will pass on the full benefit of the cuts to customers, and that motorists will feel a bit happier at the pump.”

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