The Kiwi Party supports review of RUC and Fuel Excise Tax.
The Kiwi Party

Press Release
Aug 9, 2008

Embargoed till 11AM August 9th.

Speaking at his Party’s annual conference in Auckland today, Kiwi Party leader Larry Baldock applauded the success of the transport industry in forcing the Government to agree to an independent review of the way we collect revenue to pay for our road network in New Zealand.

“This will give all New Zealanders the opportunity to review how we are going to fund the costs of completing a safe and economically efficient transport network in New Zealand,” he said.

“With the ongoing need to spend massively on our roads to bring them up to standard, the more than $1.5 billion estimated to be needed to get our rail network updated, infrastructure required to make the most of coastal shipping as well as the subsidizing of public transport options, it is unfair if this is borne mostly by those who purchase petrol or pay RUCs.

“We will now face the certainty of diminishing revenues under the current Fuel Excise Tax due to more fuel efficient vehicles and increased use of hybrid vehicles, reduced consumption because of higher oil prices, and the eventual introduction of alternative energy for cars.

“On the other side of the ledger we face the escalating cost of road construction and  road maintenance. As pointed out so clearly by our guest speaker Tony Friedlander from the Road Transport Forum, this growing gap between revenue and expenditure as we attempt to catch up with the much needed investment in our road network cannot be solved by continually increasing road user charges.” said Mr Baldock.

“Some proposals being looked at include shifting all vehicles to RUC type charges and greater electronic tolling and road pricing but this has negative consequences as it has the possibility of families being faced with unexpected bills at the end of each month from uncontrolled or foreseen vehicle trips.

“The Kiwi party believes we should look at the option of designating approx 2% of the 12.5% collected in our GST, in another words approx 16% of GST revenue to replace the revenue from all fuel excise and road user charges.

“The advantage of this would be a reduction in the cost of petrol by 50 cents per litre.  This will help families struggling to pay their weekly bills, cause a reduction in the cost of transportation across the economy which would therefore lower the cost of many goods and services, as well as  make the cost of production for our NZ industry far more competitive internationally and give a boost to our exporters.

“GST is a simpler form of taxation that collects from everyone; motorists, bus passengers, cyclists, those using the footpath and the income from GST would keep pace with inflation each year,” said the Kiwi Party leader.

Ends

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