Government plans new way to tax car drivers

By Paula Oliver

All motorists would be charged for the distance they travel under a plan designed to replace petrol taxes.

The Government is worried that its petrol tax income will fall as climate change concerns produce vehicles which are more fuel-efficient or use alternatives to petrol.

The tax money helps pay for roads, public transport and the development of facilities for walking and cycling.

Diesel vehicles and all vehicles over 3.5 tonnes already pay road user charges, based on the distance they travel.

They make up about 18 per cent of New Zealand's vehicle fleet.

The Ministry of Transport says the Government is "beginning to look at the issues" involved in having a distance-based tax for all vehicles.

"One of the early considerations is the speed at which such a change in system needs to occur, given changes in vehicle technology and fuels," the ministry said.

Another consideration was the cost of making the change and then administering the new system.

The prospect of a distance-based tax was raised in the draft energy strategy issued this month as part of a series of Government announcements on climate change.

The document suggests the investigation is a long-term project.

Automobile Association motoring affairs manager Mike Noon said he accepted there would be pressure on the Government's revenue collection process, and "we've got to work out a way to collect the excise tax".

He warned motorists against expecting driving to become cheaper as fuel efficiency increased.

"We still need to collect revenue to pay for our transport system, to improve it for safety, to improve it for congestion, to help support public transport."

Mr Noon said the AA did not oppose distance-based charging for all vehicles, but such a system would probably be more expensive than the petrol tax to administer.

"We're not dead against it ... we have to be having a debate," he said.

One option to address the predicted drop in petrol tax income would be to increase the level of tax.

This would mean drivers would pay the same amount for fuel as they always had - unless they were failing to become more fuel efficient.

That might provide an incentive for people to become more fuel efficient.

But electronic technology for distance-based charging is developing quickly.

Overseas, the prospect of a tracking device measuring the distance a vehicle covers has raised civil liberties issues, and Greens co-leader Jeanette Fitzsimons said New Zealand would need to be careful in that area.

"I think paying by distance is good, as long as you can find a way of doing it that doesn't cost so much to collect the revenue and a way that doesn't impose electronic tracking of every vehicle," Ms Fitzsimons said.

National's climate change spokesman, Nick Smith, said distance-based charging was an interesting idea, but the problem was the cost of collecting the money.

"It's so much more complicated than just putting a tax straight on petrol," he said.

"The huge attraction for any government and for the country of the petrol tax is that it is so easy and so efficient."

Dr Smith thinks a time will come when there is a shift to "direct road pricing", but said it would be better to wait until technology improved and was more cost-effective.

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