For Immediate Release
13 November 2003

MOTORISTS ALARMED AT SUGGESTED TAX HIKE

Reports of a proposed option of a nationwide 15 cents a litre increase in petrol excise to solve Auckland's transport problems will have alarmed motorists from the North Cape to the Bluff, AA Public Affairs Director, George Fairbairn, said today.

Not only is the suggested amount an extreme option, the concept appears to overlook that 20% of the vehicle fleet use diesel. If there is to be equity in any suggestion of a tax increase then it must apply to all fuels.

The immediate response from the Minister of Transport that the suggestion of a 15cents increase has been ruled out is a positive sign that this option will not proceed. It does however leave questions as to what contribution will come from Government to address the Auckland transport problems resulting from considerable under-funding over many years from successive administrations.

Any increase in taxes on fuel comes at a time when it is reported that the country is running with a very healthy surplus, and would be on top of the 4.7 cents a litre introduced last year by the Government to ease congestion and provide the network the region needs.

The AA believes that the Auckland Regional Land Transport Strategy should be implemented on a project by project basis using debt funding. This would mean the Government would borrow the money, either by issuing special bonds or through normal borrowing. The revenue to repay the borrowing could then come from a range of sources including a nominal fuel tax matched by an equal contribution from the Crown account contribution from motorists over the years; rates, and dividends from Infrastructure Auckland assets.

Given the Government's strong fiscal position the Association believes at least half of the required funding should simply come direct from reserves recognising that investment in Auckland's infrastructure is in the best interests of the nation’s growth and economic future, said George Fairbairn..

ENDS

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