KEY POINTS:
Motorists feeling the pinch of rising petrol prices look set for another increase, through a regional fuel tax of up to 10c a litre that has enough political support to pass its first legislative hurdle.
The Land Transport Management Amendment Bill sets up a framework under which Aucklanders are likely to paying up to an extra 10c a litre for their fuel, partly to fund the electrification of the region's rail network.
The bill, introduced into Parliament yesterday by Transport Minister Annette King, enables regional authorities to seek approval from Government ministers to levy a local petrol tax. The move was first discussed around May's Budget, but the bill's introduction has revealed more details of how the planned tax will work.
Among them, the Government will have an element of additional control over how the Auckland region uses its fuel tax, when compared with how other regions can use it.
The bill spells out that Auckland's authorities will be able to ask for a tax of only up to 5c a litre, and it will then be up to government ministers to decide whether they want to amend the proposal by adding another 5c a litre on top of that to fund projects that they feel are priorities for the region.
Other regions have the flexibility of putting up an initial case for a 10c-a-litre tax.
Ms King said yesterday that the tax would be available to fund only "priority projects" that would not otherwise get adequate funding within a desired timeframe.
A 10c-a-litre fuel tax in Auckland could potentially raise $120 million a year.
Labour has consulted smaller parties in Parliament to try to gain support for the legislation, and the Greens and New Zealand First have agreed to back the bill to a select committee for scrutiny. The Greens, who wanted the full amount of any regional fuel tax to be dedicated to public transport projects, said they were generally happy with the legislation.
It is believed that New Zealand First, however, insisted that some of the tax needed to be able to be used for roads, and the legislation is something of a compromise reached in order to secure enough political support.
The regional fuel tax will be charged at a fuel wholesale level, which means it will hit the fuel that oil companies such as Shell and BP send to petrol stations within an affected region.
The oil companies and other fuel wholesale distributors will have to send in a return at the end of each month detailing how much fuel they supplied within the region and how much tax was payable on that amount.
There will be an opportunity for people to claim a refund of the tax if they use the fuel for commercial non-road or off-road purposes.
It is estimated that as much as 20 per cent to 25 per cent of the regional fuel tax will be refunded.
The New Zealand Road Transport Forum has estimated that freight costs will increase by 1.3 per cent with a 10c-a-litre regional fuel tax, while it is expected an average private motorist's vehicle running costs will increase by about $150 a year, or 5 per cent.
Land Transport New Zealand has estimated it will cost $500,000 to set up a system to record and process applications for refunds, and four audit staff per region are likely to be needed to look over the tax.
The legislation may not be passed until the first half of next year, with any tax at least three months away after that.
