The coalition Government plans to increase fuel taxes and vehicle registration fees, despite having campaigned last year on tackling the cost of living crisis.
Transport Minister and Pakuranga MP Simeon Brown released the draft Government policy statement on land transport on March 4.
“Over the next three years, our investment of around $7 billion per year prioritises economic growth and productivity, increased maintenance and resilience, safety, and value for money,” he says.
“It balances the need for investing in new projects, while ensuring our transport system is maintained to a high standard.”
To balance its transport budget, the Government is proposing an increase to the motor vehicle licensing fee by $25 in January, 2025, and a further $25 in January, 2026.
And it plans to increase fuel taxes.
“We will also provide a Crown grant of $3.1b, a Crown loan of $3.1b, and a 12 cent, 6 cent, and annual ongoing 4 cent per litre increase in fuel excise duty (FED) and road user charges (RUC) equivalent in January 2027, 2028, and 2029, respectively,” Brown says.
“We will not be raising FED and RUC this term.”
During last year’s general election campaign, National Party MPs frequently criticised the previous Labour Government for its spending of taxpayers’ money, which they said contributed to a rise in inflation and the cost of living crisis.
Earlier this year Prime Minister and Botany MP Christopher Luxon said the Government will axe the Auckland regional fuel tax, which increased the price of fuel by 11.5 cents a litre.
“We are determined to reduce the cost of living for hardworking New Zealanders, and this will go some way to easing the pressure on them,” he said at the time.
Brown says the Government is delivering on its coalition agreement commitments by re-introducing the Roads of National Significance programme, with 15 projects included.
The two projects in Auckland are Mill Road and the East West Link.
The draft Government policy statement commits up to $2.3b for public transport services and $2.1b for public transport infrastructure over the next three years.
“Delivering reliable, effective, and efficient public transport is a priority, particularly in our main cities of Auckland and Wellington,” Brown says.
The draft policy statement increases road maintenance funding by $640 million.
Brown says potholes have become increasingly apparent on the country’s roads in the past five years.
“To address this, we have established new State Highway and Local Road Pothole Prevention Activity Classes.
“These activity classes will direct between $3.1b and $4.8b to address potholes on state highways and local roads.
“Road safety is a responsibility we all share. There will be a stronger focus on road policing and enforcement, investing in new and safe roading infrastructure, and targeting the leading contributors to fatal crashes.”
Following Brown’s announcement on March 4, Labour Party leader Chris Hipkins told reporters at Parliament in Wellington the Government’s move to raise fuel taxes in the second term was a broken campaign promise.
“Christopher Luxon made the cost of living his number-one election commitment.
“He said they weren’t going to be introducing any new taxes. He said they weren’t going to be increasing fuel taxes. In fact they’re doing both of those things.”
The draft Government policy statement on land transport is available online at www.transport.govt.nz.
Consultation closes on April 2.
