United Future
Larry Baldock

Baldock on Customs and Excise (Motor Spirits) Amendment Bill

We would all like to see tax reduced, but we are prepared to pay tax that goes to specific purposes. When we see a benefit from tax being paid, most reasonable New Zealanders are prepared to pay their share.

We are prepared to support this legislation because the tax is being raised to improve the conditions of our roads in New Zealand and to build the new roads we need. We want better roads in this country. I do not believe there is a motorist who would oppose seeing a better quality of road, which would mean safer roads for our drivers and passengers, and a more efficient transport system.

We go to Europe and see their beautiful roads, and we understand the price they pay for that. The cost of their fuel is far, far more than what New Zealanders pay for their petrol here in New Zealand. So we are prepared to support the legislation, because 100 percent of this new tax will go to the National Land Transport Fund to be spent on the construction of new roads and the improvement of roads, which we desperately need in New Zealand. The second reason we will support it is because it will then be redistributed from the National Land Transport Fund back to the regions it was raised from, on a population-distribution basis.

We believe that is very good news. United Future has long supported the fact that when we devolve responsibilities to local government, we should also give local government the funding it needs to carry out those responsibilities.

This is one instance where, with local communities facing increased costs in building their roads and in improving the State highway network, they will get back the tax increase for their own regions so they can have some decision-making power in how the money is spent.

We believe that is very good progress on United Future’s policy of devolution of funding to local government and to local communities. We agree with the Minister of Finance that it is prudent to allow flexibility of when to introduce the new tax, because of the recent spike in fuel prices.

So if, in fact, fuel prices are still very high next year, it will make sense to defer the introduction of the tax for some time. At this stage, no one can predict what the fuel price will be next year. But we do not believe that we should make all our decisions based on overseas factors.

We need to have roads in New Zealand, and we have to pay for them. We should have built those roads some time ago, as has been pointed out by other speakers before me. It would have been a lot cheaper to build them in years gone past. The longer we wait in building the roads we need now, the more it will cost us in the future.

We should not have been diverting as much of the fuel tax in the past to what was the consolidated account but is now the Crown account, when previous National and Labour Governments used to take a lot more of the fuel tax than happens today under this Government.

Then we would have had better quality roads already, and they would have been built more cheaply than their cost today. The longer we wait the more it will cost us, so both by fuel tax and by other means we need to get stuck into the important task of building an efficient transport network in our country.

The longer we wait, the more construction costs there will be and the more costs there will be to our economy from the congestion and frustration that people face in trying to move both people and products around our country. To have a vibrant economy, we must have an efficient, affordable, integrated, safe, sustainable, and responsive transport system, and that is part of what our national land transport strategy states very clearly.

United Future is well aware of the concerns of New Zealand motorists concerning the diversion of what is currently 18.5c per litre from the fuel excise tax to the Crown account. In supporting this legislation, United Future makes it very clear that we continue to have an ongoing concern about it, and we have consistently pressured the Government to complete a study into what the costs to us all in New Zealand are of petrol use for transportation; in other words, the health effects of fuel emissions, and the environmental costs and effects of vehicle use and road construction.

For the last two years, I have urged the Minister of Transport to complete the study so there can be transparency in New Zealand about what the money is being diverted for.

I am happy to know, according to information given to me recently, that the study is almost complete, and we will be able to have a discussion in this country about whether it is justifiable for 18.5c to be diverted to the Crown account to take care of those other, non-road costs of the use of petrol fuel in New Zealand.

If we cannot answer that question transparently and openly, it is understandable that motorists begrudge the fact that more tax is coming at the same time as the Government is diverting some from the existing tax that has already been raised, without a good explanation of where it goes. In answer to my written question to the Hon Pete Hodgson, I received the reply that last year there was 3.214 billion litres of petrol sold in New Zealand.

At the rate of 18.5c per litre, approximately $594 million was diverted to the Crown account. We want the Surface Transport Costs and Charges Scoping Study for New Zealand which is the study being conducted to justify that diversion for expenditure, to be able to clearly convince New Zealanders that there is $594 million worth of reasonable cost associated with petrol use in our country. Otherwise we should see a further reduction to the amount of 18.5c that is currently being diverted to the Crown account. United Future again pledges our commitment today to the New Zealand motorist that we will faithfully and consistently remind the Government of its obligation to answer that question for motorists and to present the information to the motoring public.

We do, however, congratulate the Minister of Finance on agreeing last year to my request to reduce the diversion to cover the cost of the Auckland funding package announced last year. Somewhere between 2 and 3c will be coming off the amount diverted as that package comes into full effect.

That is more than New Zealand First ever accomplished when it was the coalition partner with National and when the leader of New Zealand First was Treasurer for the country. I state again, for clarity’s sake, that if the surface costs and charges study does not adequately answer motorists’ accusations of unjustified diversion to the Crown account, United Future will expect the Government, at the very least, to announce a future reduction in the amount diverted so that it will match the 5c we are asking motorists to put their hands into their pockets and pay for the important project of building new roads in our country.

LARRY BALDOCK197

United Future supports building roads and paying for them via revenue raised by fuel excise tax and road-user charges because it does make sense. It is an efficient way to raise revenue, but we do not think it is the only way to pay the cost of road construction.

In fact, if we were to rely on it for only this method, the cost of fuel in New Zealand would rise dramatically and this would create real hardships for some sectors of our society and our economy. The NBR-Phillips Fox poll last week demonstrated that a resounding 60 percent of those polled said they supported the use of road tolls to pay for the improvement of existing roads and the building of new roads.

A resounding 60 percent of New Zealanders endorsed United Future’s achievement in this term of Government, in passing legislation with the Government that allowed for alternative funding methods of raising revenue to pay for road construction and road improvements. The NBR article stated: "The Labour-led Government has been given a wake-up call on roading issues by the latest NBR - Phillips Fox poll."

It would probably have been more accurate to have said that the Green Party was being given a wake-up call, because New Zealanders want roads; or that the New Zealand First Party was being given a wake-up call, because New Zealanders are prepared to pay tolls to build new roads where necessary. So we shall be supporting this legislation, which is only one part of a package of measures, in order to improve our transport infrastructure in this country.