Fuel tax may be applied in Wairarapa

Wairarapa motorists will be liable to pay an up to 10 cents a litre fuel tax for Wellington regional transport projects, says Terry McDavitt, Greater Wellington Regional Council land transport committee chairman.
"Wairarapa is liable on the face of it, although in implementation the regional councils are given a bit of leeway," Mr McDavitt said yesterday.
Under plans unveiled on Thursday by Finance Minister Michael Cullen the scheme will allow regional leaders, after ratepayer consultation, to raise money for big transport projects by adding a levy to petrol prices.
A Wellington regional fuel tax of 10 cents a litre would raise $35 million a year and support a $430 million loan ? almost enough to bridge a funding gap to build the proposed Transmission Gully inland motorway.
The special tax would be used to advance big projects like Transmission Gully that does not qualify for immediate funding under current guidelines.
Mr McDavitt said that proposals about a fuel tax on Wairarapa motorists still needs to be established, although "personally I think there is a case for graduating the liability".
"I would need to consult with my colleagues but it should be graduated and the Wairarapa would be accordingly liable, especially with specific projects like the upgrading of the Rimutaka Hill road," he said.
"We will need to look at equities."
Masterton District councillor Rod McKenzie yesterday slated the idea of a fuel tax on Wairarapa motorists that would fund transport projects in Wellington.
"They seem happy to sting us with a five or ten cents a litre for something happening in Wellington and they were quick to take a seat off us on the regional council. But where do you get the balance ? do they want us all to live in Wellington?"
Handley Thomson, AA Wairarapa District Council chairman, said a regional fuel tax will not be imposed for at least another year and would only be considered after public consultation.
"If such a tax was to be used for a project of direct benefit to Wairarapa, it would be fair and reasonable.
"But if it was a general tax with no effect on Wairarapa, it wouldn't be right to make us pay and we would definitely oppose it."
David Lee, Rideshop Taxis managing director, said a regional levy on fuel would inevitably lead to a fare price rise for the Masterton firm.
"I was hoping it was going to affect Wellington city only but like any business we are continually reviewing our costs and protecting our bottom line.
There are increases all over the place right now and we will adjust for any regional petrol tax when that comes along."
Transport company owner Bruce Baker said the proposed fuel tax is just the latest cost pressure on smaller operators that will see businesses disappear and price rises for those that remain trading.
"A fuel tax ? if its more than just petrol ? will have a huge effect on our business. And that comes on top of the Kiwisaver contributions and increased employee holidays.
"Quite frankly, for small business generally, things are not looking good. For smaller long-haul operators ? they'll have to go out of business," he said.
"A ten cents a litre price rise will be the final nail in the coffin for some operators, definitely."