Auckland's new regional petrol tax of 11.5 cents a litre is placing an unfair burden on low-income and Maori households, says the body that promotes issues for Māori to Auckland Council.

The Independent Māori Statutory Board today released a report showing low-income Auckland households spend more of their income on fuel compared with higher earners, saying it made the fuel tax unfair in terms of its impact on the less well-off.

People on lower incomes were also more likely to run older less fuel-efficient vehicles and have fewer available public transport options at the time they needed them for travel to and from work, according to the report.

The report's findings were rejected by Transport Minister Phil Twyford who said it was out of date and did not take into account the Government's Families Package introduced in July that puts an average of $75 extra in the pockets of 384,000 low-income families with children.

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The report showed annual fuel costs increases could be as much as $366 for lower-income households, with an additional $452 a year if the fuel efficiency of vehicles owned by low-income households is considered.

For the lowest-income people, the tax would mean an extra $4.88 to $7.32 a week in petrol costs, the equivalent of a school lunch.

The council introduced the regional petrol tax on July 1 after the Labour-led Government passed legislation to allow for it.

The tax is expected to raise $1.5 billion over 10 years to invest in new transport infrastructure.

The board said the council and Government urgently need to come up with ways to offset the fuel tax's impact on low-income Auckland households, particularly Māori living in the region's south and west.

David Taipari, chairman of the Auckland Council's Independent Māori Statutory Board.
David Taipari, chairman of the Auckland Council's Independent Māori Statutory Board.

Board chairman David Taipari said little or no policy consideration had been given to the impact of higher fuel prices on low-income Auckland households.

He called on the Government and the Auckland Council to urgently look at ways the combined impacts of the regional fuel tax and the newly introduced national fuel levy could be offset as both were adding to Auckland's poverty problem.

"Of serious concern to the board is the impact of higher fuel costs on lower socio-economic groups, especially on lower income Māori families who are forced to spend more of their income on fuel. The implications have not been adequately thought through and the problem needs to be urgently addressed," Taipari said.

The board would also ask the council and Government to set up a system to monitor and track the effects both fuel taxes were having on low-income Auckland households using Census data and household expenditure and travel surveys, he said.

"The regional fuel tax policy is regressive meaning it disproportionately impacts on lower-income households many of which are Māori and producing even more inequitable impacts when the fuel efficiency of vehicles is taken into account," Taipari said.

He said the report listed several options both local and central government could consider to ease the disproportionate burden the fuel cost increases will have on poorer Aucklanders. These included further increases to Working for Families, tax relief, discount cards, rates relief and specific targeted transport services.

Twyford said the Families Package will help offset the 11.5c a litre increase in fuel for drivers in the Auckland region.

"The report also fails to acknowledge the associated high cost on low-income families of running a car, and the potential savings they will make when better public transport options are available," he said.

Goff disputed the report's findings, saying Statistics New Zealand figures show 2.4 per cent of household income is spent on petrol in high spending households and 2.6 per cent in low spending households, saying the difference is very small.

"Offsetting the around $2.40 a week that the Automobile Association says represents the average cost of the RFT to Auckland motorists is the $75 on average that low income families will receive from the government's families package," said Goff.

He said nobody likes paying more in tax or for services, but the fuel tax leverages $4.3 billion in funding on reducing growing congestion and providing a better transport service, which in particular will benefit the elderly, disabled and low income groups which rely on public transport to get around.

When the council approved the tax in June, Manukau councillor Efeso Collins said he understood the council wanted to progress transport issues, but when people were "below zero this is taking food off people's tables".

Papakura-Manurewa councillor Daniel Newman described the tax as a "wholesale redistribution of wealth from some of our poorest blue collar workers who have the least transport choice to fund much of the infrastructure to serve those people who enjoy the greatest wealth".