Taxpayers’ Union welcomes decision to extend fuel tax cut

Taxpayers’ Union welcomes decision to extend fuel tax cut

The Taxpayers’ Union – which has been campaigning for an extension to the diesel road-user charges and petrol excise reductions – has welcomed the Government’s announcement today that the fuel tax cuts will continue until 30 June.

They have, however, called on the Government to stop using the National Land Transport Fund (NLTF) to fund non-road programmes so fuel taxes can be kept down in the future while continuing to invest in and maintain our roads. 

Taxpayers’ Union Campaigns Manager, Callum Purves, said:

“Today’s announcement will come as a welcome reprieve to families and businesses who were facing steep price increases at the pump in addition to all the other inflationary pressures driving up the cost of living.

“Opponents of the fuel tax reduction argue that those who use our roads should pay for their maintenance and improvement. We agree. But the reality is that road users are subsiding public transport services, walking and cycling routes, loss-making rail services, and advertising campaigns through the NLTF.

“The Government should return the NLTF to its original purpose – paying for our roads. If it wishes to continue to fund these other programmes, it should do so by finding savings elsewhere rather than force road users to pick up the tab. This would allow for fuel taxes to be kept lower than they were before the cut, increased investment in our roads or some combination of the two.”

In the last government financial year to 30 June 2022 (including 3.5 months of the fuel tax cut), the breakdown of income to the National Land Transport Fund was as follows:

• Road user charges: $1,904m
• Fuel excise duties: $1,783m
• Vehicle regulation / licensing: $235m
• Track user charges from KiwiRail: $7m
• Road user charges – Gov funding to replace lost income due to fuel tax cut: $186m
• Fuel excise duties – Gov funding to replace lost income due to fuel tax cut: $189m

While the spending from the fund was as follows:

• State highway improvements: $1,010m
• State highway maintenance: $796m
• Local road improvements: $105m
• Local road maintenance: $720m
• Investment management: $60m
• Road policing programme: $394m
• Public transport services: $429m
• Public transport infrastructure: $304m
• Walking and cycling improvements: $104m
• Road to zero: $285m
• Rail network investment programme: $287m