New Zealand Transport Plan Sparks Controversy with 12 Cents Fuel Tax Hike

The New Zealand government has proposed a transport plan estimated to cost $20b NZD over the next three years. The budget will go into improving public transport, road maintenance, and cycle paths. New Zealand Prime Minister Chris Hipkins stated that the funding for this transport plan is the highest of any government.

However, in order for the government to fund this project, fuel taxes would have to increase by 12 cents per litre for the first time since 2020; a move which the Taxpayers’ Union Campaigns Manager, Callum Purves stated would “hit the poor the hardest”, especially during the cost-of-living crisis.

The plan has divided opinion with Purves further calling the plan a slap in the face to ordinary New Zealanders. Conversely, Auckland Mayor Wayne Brown praised the plan divulging that the funding conveyed the government was “responding to Auckland’s priorities for transport”.

In an attempt to ease concerns regarding the increase of fuel taxes, Spokesman for National Transport, Simeon Brown, told an audience at a Q&A, that he would not increase fuel taxes during his first term and would take a more balanced approach to the plan. Brown said: “We have a range of other funding tools that we will be implementing. They’re all based on user pays, so that people who benefit from those projects are contributing towards them”.

The $20b funding has been proposed to go into improving the following:

  • The Christchurch Northern Link
  • The SH1 from Cambridge to Piarere and SH2, Napier to Hastings
  • The Hope Bypass on SH6
  • Tauranga to Tauriko SH29
  • Road improvements from Wellington CBD to the Airport

The funding will also go into improving pedestrian and cycle paths, with funding set to increase by 79% from the 2021-2024 budget, public transport subsidies with funding increasing by 50%, and continual development into Auckland’s north-western motorway.

In addition to the tax increase, there has been some criticism that the proposed plan will do very little to combat climate change. Julie Anne Genter, a spokeswoman for the Green Party reacted to the proposition by claiming that “the focus is still too much on new roads, and not low carbon alternatives”.

Genter further stated that investing billions more into roads over alternatives such as regional rail proved that Labour are not genuine in regards to tackling climate change. A spokesman for The AA put a more optimistic view to the project, stating that the roads Kiwi’s want to have, come at a cost and “if motorists are paying more, it’s fair enough for them to want better results in return”.

The plan was revealed to the New Zealand Parliament on Thursday 17th August by Transport Minister David Parker and sets out the amount of money the government wants transport agency, Waka Kotahi, to spend. After the Draft document has been finalised, Waka Kotahi will construct its National Land Transport Plan (NLTP), which declares how the budget will be spent by the government. It also specifies how much funding councils will receive to help them invest in their communities by way of road maintenance and public transport subsidies.

Image: Copyright: World Economic Forum/Jakob Polacsek (CC BY-NC-SA 2.0)