Auckland Council approves 11.5 cent per litre regional fuel tax for consultation

Motorists will face the fuel tax from July. Photo / File

Auckland motorists may pay an 11.5-cent per litre fuel tax after the local council gave the controversial move its initial approval today.

The price rise looks likely to hit motorists at the pump on July 1 after a 15-2 council vote in favour of the draft tax.

Auckland drivers face paying 25c a litre more in the next three years as the Government also proposes boosting fuel taxes in 3c to 4c annual hikes.

From tomorrow, Aucklanders can have a say on the draft tax and 14 public transport, roading, walking and cycling and safety projects it will go to fund. Consultation ends on May 14.

The council is set to formally approve the regional petrol tax on May 31. Legislation allowing the tax is expected to be passed in Parliament in time for the tax to come into effect on July 1.

The price rise would be for a maximum of 10 years. The tax is expected to raise around $150 million a year.

All but two councillors - Greg Sayers and Sharon Stewart - voted to go out for public consultation on the tax.

This followed a unanimous vote of council to support a $28 billion 10-year transport programme for the city announced by the Government and Mayor Phil Goff.

Goff said the tax would raise $1.5 billion over 10 years but with Government subsidies and development contributions it would raise $4.3 billion of "skin in the game" for the 10-year Auckland Transport Alignment Project (ATAP).

Rodney councillor Greg Sayers said he could not support the fuel tax, saying council consultation on the regional fuel tax found 48 per cent of people were opposed and 46 per cent supported it.

Transport Minister Phil Twyford welcomed the council voting 15-2 in favour of a regional fuel tax.

"They are putting the interests of Auckland ahead of petty politicking," Twyford said.

"Today's decision is a kick in the guts for National Leader Simon Bridges who this morning declared he would keep Auckland in the dark ages by scrapping the regional fuel tax."

Goff said the council had previously voted unanimously for the ATAP package so "please don't come to me saying you don't want the fuel tax".

"Doing nothing is not an option. We want to be a world-class city. This gives us a definitive way we can fund not just the immediate problems but being transformational," he said.

The new consultation with the public will include 14 projects that the fuel tax will fund.

The projects are:

• Bus priority improvements, such as bus lanes, T2/T3 lanes - $135m*
• City centre bus improvements - $62m
• Improved airport access - $26m
• Eastern busway - $201m
• Park and ride for about 1900 additional spaces - $24m
• Electric trains and stabling - $213m
• Downtown ferry redevelopment - $28m
• Road safety - $225m
• Cycling and walking - $112m
• Penlink toll road - $66m
• Mill Rd corridor - $102m
• Road improvements, including Lincoln Rd, Lake Rd and Matakana Link Rd - $87m
• Traffic signal optimisation and other technology - $99m
• Transport infrastructure at new subdivisions in south, north and north-west - $126m

The council also decided to put a footnote in the consultation document on the regional petrol tax about the Government's proposed excise taxes of 10c a litre to 12c a litre over the next three years.

When combined, the two taxes could raise the price of petrol at the pump in Auckland by 25c over three years.

The amendment to include the footnote was put forward by Orakei councillor Desley Simpson, who some councillor believed was being party political.

Simpson, who is married to National Party president Peter Goodfellow, said she was asking for transparency and openness so Aucklanders understood the potential increase at the pump was not just 11.5c.

Labour councillor Josephine Bartley seconded the amendment, saying her reasons were not political but about giving people information and context.

National would scrap regional fuel tax

Earlier today Phil Goff said National Party leader Simon Bridges' policy to overturn the regional petrol tax was merely what people said in opposition.

"I would be very surprised if any future government took away, effectively, $4.3b of funding without suggesting where that funding will come from," he said.

The regional fuel tax was expected to raise $1.5 billion over 10 years but with government subsidies and other funding sources leveraged to $4.3b of spending on transport, he said.

"Oppositions often say things at the time but come around to accepting that the new status quo actually does makes sense and I think the National Party would find that as well," Goff said.

In his first economic speech as leader on Monday morning, Bridges said National would overturn the coalition Government's regional fuel tax, should it get into power in 2020

Labour announced plans earlier this month to introduce a fuel tax of between 9c and 12c per litre over three to four years to pay for its 10-year transport plan. It was set to come into force in July.

Bridges said this morning the tax was an unfair measure and would cost a typical Auckland family $700 a year.

However, Goff said there was a $5.9 billion deficit in the previous Auckland Transport Alignment Project (ATAP) - the joint Government-council transport programme for Auckland - which had been bridged by the regional fuel levy.

The ATAP 10-year programme announced last week was the "biggest ever" transport package at $28 billion, the mayor said

Goff said the regional fuel tax was a significant way in which the council was able to contribute towards Auckland's transport needs and a critical part of the programme for the city.

"We could do nothing and then we would have gridlock. I don't think any Government would accept that. We could have put it straight onto rates and that would mean a 13 per cent to 14 per cent rate increase.

"Clearly putting the cost on ratepayers, including the elderly who hardly use our transport system much at all, is not an equitable way of raising the money," he said.

Bridges also said he would get rid of the $3 billion Regional Development Fund led by Shane Jones.