Editorial: Tax rise hits every one of us

By Andrew Austin


Just what we need - another tax hike.

The latest hit is a petrol price rise in the form of excise tax which will rise by nine cents a litre by July 2015. The tax is set to rise by three cents a litre at the start of July and will continue to rise for the next two years.

Parliament took the unusual step of sitting this weekend so that the Government could pass The Customs and Excise (Budget Measures - Motor Spirits) Amendment Bill. It passed under urgency on Saturday by 67 votes to 26.

The money raised is set to go into the Government's Land Transport Fund and will be used on road infrastructure. Excise tax increases are not new and occur most years, but this is a targeted one over three years.

Some may say that three cents per litre per year for the next three years is not that bad, but unfortunately it is not simply a matter of the petrol price rising. This is a tax on petrol and is separate to any increase caused by a rise in oil prices. The thing about any long-term petrol price increase, especially a tax-inflicted one, is that it is not just motorists who are affected.

I heard someone say the other day that they would not be affected by this because they rode a bike. It may have been tongue-in-cheek, but it kind of missed the point. Everyone is affected, because if petrol prices go up, food, clothing and other prices are sure to follow. Businesses have to transport their goods and they pass any extra cost on to the retailers, who pass it on to the consumer - us.

This tax hike comes at a time when some businesses are beginning to see a slight slowdown after a positive start to the year. The fear is this will make tight trading conditions even tighter and therefore put a further brake on growth.

It is important that the Government improves our road infrastructure, but what's the point of building roads if we can't afford to drive on them?

- HAWKES BAY TODAY

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