The NZ Herald reports:
The Government will increase petrol tax by three cents a litre each July 1 for the next three years.
Transport Minister Gerry Brownlee said road user charges would also be increased by an equivalent amount.
He said the increases were required to deliver the “Roads of National Significance” programme and other roading projects to the timeline set out in the Government’s land transport funding policy.
“Excise increases in recent years have helped maintain the real value of the Land Transport Fund. These latest increases will also achieve that, and allow for continuing investment in the Government’s state highway building programme and other transport projects,” Brownlee said.
In particular, the extra money would allow work to begin on the Rangiriri and Tamahere-Cambridge sections of the Waikato Expressway, the Mackays to Peka Peka section of the Wellington Northern Corridor, and the four-laning of the Groynes to Sawyers Arm section of the Western Corridor in Christchurch.
“We have considered innovative ways to deliver the RONS [Roads of National Significance] programme, agreeing to the procurement of Wellington’s Transmission Gully project through a public-private partnership and asking the NZ Transport Agency (NZTA) to investigate tolling the route.”
NZTA chief executive Geoff Dangerfield said the certainty provided by the increased funding had allowed the NZTA board to approve construction funding for projects.
“The certainty that this guaranteed funding stream provides means we can proceed with confidence in developing and delivering these and other major projects which will enable economic growth and provide safer journeys for New Zealanders.”
This pretty much confirms the impact of lower than expected fuel sales over the past few years have been hurting the transport budget more than the government has admitted. This is a fairly significant increase in fuel taxes, for projects of pretty debatable merit. I wonder how it’ll go down with the general public.
Edit by Matt: I was just working on a similar post, here is what I was about to say:
Well it wasn’t too hard to see this coming. The government has announced that fuel taxes will be increased by 3c a litre for the next three years with road user charges increasing by an equivalent amount. The increases are largely to cover a shortfall of $1.7 billion that is being brought about by road building binge that the government is on with its Roads of National Significance programme. One of the key reasons for the need of this increase is finally starting to be addressed by the MSM, that the expected growth of traffic is not occurring. This is leading to less money in the kitty to pay for these projects, many of which have such poor economic returns that they shouldn’t even be considered. On the TV one news piece about this, Andy Foster from the Traffic Institute, had this great quote:
“They’ve been predicting a significant amount of traffic growth and therefore significant revenue growth, [but] the traffic growth hasn’t been happening.”
The problem of course is that just like here, all around the world traffic demand is dropping off. This latest announcement of tax increases are only likely to put even more people off driving which will further impact on tax revenues. In a way it seems that traffic volumes are now heading into a bit of a death spiral, less are driving requiring taxes to be raised to which in turn leads to even less people driving. And these tax revenues have turned out to be fairly important as also today Bill English has announced that without the increases, the government would not have reached its goal of getting back into surplus.
There is of course one thing that could really help out here and that is cutting back the RoNS but that is the one thing that the government simply refuse to even consider.